In the digital era, all companies have to reinvent the way they develop, promote and sell products or services. They might even come up with completely new business models that are creating additional value, and therefore new revenue streams. Finding the right partner and engaging in new business models has become a key challenge for legacy players – read here “banks, insurance companies, financial institutions, etc.” – but also for fast growing and innovative niche players…

In this third article of the HUBTALK series, Pierre-Olivier Bernes, IT Project Manager and Marketplace finance expert, focuses on the need for all financial players to explore new opportunities, through collaboration and resulting in the creation of additional services and business models. He explains how all players can easily leverage marketplaces to reinvent themselves and boost their business.

Yay to collaboration!

“More than ever, banks and insurance companies, described as legacy and traditional players, are getting together with dynamic startups that engage in a very ‘nichy’ way, generally to provide new experiences to customers,” explains Pierre-Oliver Bernes.

He continues: “And they do it for several – good – reasons: to retain their customers and answer to their changing needs, to attract new consumers as they bring more value compared to their competitors, but also to diversify and create new revenue streams. Collaboration definitely rhymes with new business models”.

Several ways of collaborating have been explained and shared over the years, notably by seasoned innovation and leadership professors Gary P. Pisano and Roberto Verganti. One can notably think of their research papers and articles published in the internally recognized Harvard Business Review, and of their “four ways to collaborate”:

• Innovation Mall: a place where a company can post a problem, anyone can propose solutions and the company chooses the solutions it likes best
• Innovation Community: a network where anybody can propose problems, and decide which solutions to use
• Elite Circle: a select group of participants chosen by a company that also defines the problem and picks the solutions
• Consortium: a private group of participants that jointly select problems; decide how to conduct work, and choose solutions.

Nowadays, a combination of those four models could be summarized in platforms/marketplaces that advocate collaboration at all levels, and irrespective of the different technologies that might be used by the different stakeholders.

“For instance, we see that several actors have developed their own APIs, and are now making them available to others, sometimes even to their competitors: API calls can definitely be monetized and consist in a new and often unexplored business model,” explains the expert.

PFM, or Personal Finance Management, also becomes a reality, with new players leveraging banking data, remodeling and transforming them, and providing the customers with a new and clear view. Banks can take advantage of such solutions, giving more insights to their historical clients, through the innovative services provided by startups.

More generally, when there’s added value to existing services and products, financial players will be able to upsell their services and create new revenue streams. “The appetite for innovation and intuitive solutions is unmatched: the financial services that are taking this digital road will strive and keep convincing new clients, while developing new channels and products, sitting along their traditional products. Adding more diversity to their product portfolio becomes a necessity in today’s environment,” highlights Pierre-Olivier Bernes.

Embracing the concept of Open Innovation

Moreover, the ever-growing Sharing Economy and the Open Innovation model are merging through platforms that enable easy exchange and efficient and innovative product development between players that are facing new challenges and experts that thrive at solving such specific issues.

“What would happen if you stopped going head-to-head with your competition and worked with them instead? How about picking the perfect solution for your specific needs and building new products on top of it?”, asks Pierre-Olivier Bernes.

“Historically, financial services industry players have been competing against each other, trying to ‘steal’ clients from another. But now, in a digital world filled with new solutions and services, it makes sense for them to focus on niches, with the help of such specialized players. A key shift is in progress as collaboration has become the norm, hence the advent of new business models”.

If you want to be part of this shift, and be seen as a first-mover/early adopter when it comes to collaboration between legacy players, data experts, software companies, startups and many more, check out the LUXHUB Marketplace and make the most out of collaborating with innovative players. For the benefit of your customers.

Take an active part in the creation of financial services of the future, and benefit from an early adopter’s discount, valid until July 1^st: take advantage of the Business Plan, for FREE and for one year. Hope to see you there and in the meantime, don’t hesitate to get in touch with Laurence, our Fintech Business Developer.