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Banking on the platform economy


Consumers trust banks with their personal data, which gives financial institutions a key advantage in the platform economy.

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In many ways, banking has changed little over the past 1,000 years. Although computers have replaced abaci and parchment, underlying principles of banking have remained remarkably consistent. However, a millennium of constancy is now changing at warp speed. Traditional industries are interacting in ways that were unthinkable even as recently as a decade ago.

Financial services are being mixed in with services or products from other areas and industries, and banking is becoming embedded – sometimes almost invisibly – in non-bank business processes. New types of ecosystems are developing, powered by dynamic new business models, often based around platforms and network economics.

The changing face of business

As organizations embrace platform business models and the platform economy continues to expand, new business imperatives are emerging. Customers can be approached and engaged with in innovative new ways – by different parties. Telephony businesses are becoming a channel for customers to engage in healthcare discussions. Retailers are orchestrating payments systems. And social media businesses are establishing new forms of currency.

Organizations in virtually every sector seem to be vying to become not only the provider of their own products, but also an entry point for other businesses seeking access to their primary customers. Forward-thinking organizations look to become a curator of experiences as well specific products and services.

However, the playing field for deep customer engagement is not a level one. Unlike aspirers from other industries – and perhaps counterintuitively – banks are uniquely positioned for success in becoming the prime entity building and maintaining the relationships with customers.

The trust advantage

Banks possess a key advantage that most organizations don’t have. Our research suggests that people are willing to share their personal data with their bank, and banks are trusted to keep the data safe and use it ethically.

According to a recent IBM Institute for Business Value survey, more than 68 percent of consumers are willing to share personal information and data with their bank or other financial services institution. This percentage is by far the highest compared to other types of organizations with which customers interact.

Not only are individuals willing to share personal information with banks, they also appear to trust their banks or other financial services providers to protect their data. Almost 91 percent of individuals who share personal data with their bank trust it to protect their personal information and data to at least a moderate extent, second only to their own employer.

Opportunity amid disruption

To better understand where the banking industry is heading and how it can thrive in the new environment of converged industries and competition, we surveyed 850 banking and financial markets executives across all major geographies and a variety of C-suite roles. According to our research, senior executives from banking and financial markets businesses agree that platform business models – and the ecosystems that underpin them – are significantly disrupting the industry.

Bankers recognize that disruption creates both risks and opportunities. They tell us that platform business models can significantly benefit customers – and banks themselves. And they predict cross-industry platforms will only become more important to the industry and their organizations.

Banking on the future

There is little doubt that organizations from other industries are witnessing similar opportunities to leverage platform models. As a result, banks need to understand their unique competitive position, recognize their advantages, and substantially expand what they might consider their core business activities.

The future relationship between bank and customer is likely to be much deeper and much, much more interactive. But getting there from here requires radical transformation across business and operating models, as well as in the way resources, business processes, and technologies are assembled to create value.

How can banks reorganize the way they do business to compete successfully in an age of new cross-industry platform business models?


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Meet the authors

Sarah Diamond

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, Global Managing Director, Banking and Financial Markets


Nicholas Drury, Global Banking & Financial Markets Leader, IBM Institute for Business Value

Anthony Lipp

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, Global Strategy Leader, Banking and Financial Markets


Anthony Marshall, Senior Research Director, IBM Institute for Business Value

Shanker Ramamurthy, General Manager, Strategy and Market Development for Global Industries, Blockchain, and Industry Platforms

Likhit Wagle, Global Industry General Manager, Banking and Financial Markets


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