Page 29 - Banking Finance May 2024

ARTICLE

1. In-House Ecosystem
One type of digital ecosystem is when a single company
offers a suite of interconnected products. Together,
these products address a variety of consumer needs.
Often the pieces of the suite work together so that a
customer can access extra features or improved
functionality if they use more than one.

Example is Microsoft, which offers a range of business
products, including a cloud platform, productivity tools, and
devices to host all that software.

2. Multi-Company Partnership
This type of digital ecosystem is when two or more any company. It sells a full range of products that work
companies partner to offer collaborative products or
together in a user-friendly manner but aren't easy to
services. This is not a merger or acquisition-all pair with non-Apple devices. Apple laptops, tablets, and
participating companies contribute to and benefit from smartphones all come equipped with Safari (Apple's
the network. These ecosystems come in many sizes. browser), iCloud (Apple's cloud platform), and the Apple
They might be made up of just two companies or a huge App Store.
number.
3. Create new revenue streams
Example: Amazon has a core network of 67 partners.
Partnering with companies that already have the
infrastructure in place allows you to roll out new
Benefits of Building a Digital Ecosystem products or services in a shorter time. In some cases, it
A good digital ecosystem can make your company more can shorten your time-to-product by months.
agile, help lower costs, and open new revenue sources.
4. Lower customer acquisition costs
1. Prepared for economic change or global One other way a digital ecosystem can benefit your
issues company is by making it less expensive to acquire new
A set of partnerships or products can help company customers. Multi-company ecosystems give you access
adapt to rapid economic changes. If demand drops for to an expanded customer base without spending
one product, you can change your strategy to focus on additional money on advertising or other customer
another without having to start from scratch. Or you acquisition costs (CAC). According to a McKinsey study,
can lean on your partner companies. With combined banks with robust ecosystems see 10-20% savings on
resources, you might be able to pivot more quickly to CAC.
meet changes in demand.
Banking and Digital Ecosystems
2. Build customer loyalty with a 'family' of Now coming to the banking sector, the next few years could
products be a make-or-break period for some banks. They will join
Encourage people to buy from you by offering a suite the digital financial ecosystem movement-or be consumed
of interconnected products. It's more convenient for by it.
customers if they can get everything, they need in one
place. Incentivize them even further by providing These platform-based ecosystems offer products and services
package discounts if they buy multiple products at once. that are created and distributed in partnership with others.
And they confer powerful advantages, allowing
Apple has one of the most complete product families of organizations to enter new markets, create new services,

26 | 2024 | MAY | BANKING FINANCE