Page 28 - Banking Finance May 2024

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company will help increase your customer base, brand reach, searching for a new property to its ultimate sale. Interim
access to resources, like software infrastructure, and more. actions supported by the digital platform could include
financing the property purchase, obtaining insurance,
The pandemic has magnified a previous trend in which many completing renovation works, moving in and property
traditional corporations tried to create or participate in management. Services provided could include a mix of
digital ecosystems, only to fall short. These ecosystems banking services, such as mortgage pre-approval, mortgage
consist of interconnected sets of services through which users loans, house insurance, credit cards, investment advice and
fulfil a variety of cross-sectoral needs in one integrated renovation loans, as well as numerous non-banking services,
experience. including estate agency, legal advice, architecture and
design services, utilities, contractors, moving services and
Today's dominant ecosystems were launched by growing furniture retail.
tech companies, which have used hyperscale platforms to
compete with, disintermediate, and often substitute for the Many different customer needs can be addressed through
offerings of traditional competitors by controlling customer ecosystems. For example, we have supported a client in
interfaces and control points such as search, advertising, and developing a platform to create and support an ecosystem
messaging. of players focused on business customers in the agriculture
and food sector. The platform allows bank customers to
An ecosystem approach involves bundling services beyond access numerous services for the development of their
banking to offer customers a friction-free and far-reaching business and take part in a supportive network.
service. These service bundles could focus on different
aspects of individuals' lives, such as housing, retail, mobility, Services may be offered through a differentiated services
retail and wellbeing, as well as financial health. model, reflecting different customer preferences and
differing service provision costs. Some services might be
In an ecosystem offering, a multitude of actors provide their provided for free, others through paid subscription packages
products and services, and are integrated on a single digital and some made available on-demand on a pay-per-use basis,
platform destined for the customer. Adopting an ecosystem or along the lines of current banking services.
play allows banks to address a bigger share of total wallet
by expanding the points of access to their financial products. Three core approaches are open to Indian banks when
They can also strengthen their strategic positioning by launching an ecosystem offering. As a builder, the bank owns
providing non-financial services that customers would be the platform as well as all the products on the platform - an
willing to buy. approach that requires heavy investment in order to provide
all the products and services across an end-to-end customer
In a housing-focused ecosystem, for example, a customer journey for a specific need. Alternatively, a bank could
could use a single platform to fulfil their journey from strategically position itself as an integrator, owning the
ecosystem platform and orchestrating a mix of in-house and
third-party products - an approach requiring strong
partnership capabilities and organizational agility. Thirdly, a
bank could opt to be a provider, offering its products and
services to digital platforms owned by third parties - requiring
less investment but still based upon digitized banking products
and a compelling go-to-market proposition.

Types of Digital Ecosystems
Businesses typically either focus on in-house ecosystems or
partnership-based ecosystems. Both approaches have their
advantages, but they require different strategies and
resource allocation.

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