The platform economy is increasingly how people consume today. Driven by mobile technologies, the cloud and social media, platforms give the consumer a chance to interact with a brand or multiple brands, and experience products and services in a digital space.
Southeast Asia is no stranger to the rise of digital platforms, in part due to the region’s demand for online marketplaces, high social media penetration and consumers’ openness to new technology and mobile apps. The platform economy is flourishing throughout the region with Grab in Singapore, also referred to as the first “super-app” of Southeast Asia, offering not only ride-hailing but also financial services, food delivery and e-payments; and Indonesia’s Go-Jek app which provides ride-hailing, logistics, ticket booking and digital payment services.
As the impact of digital in Southeast Asia becomes more pronounced, we’re likely to see the region take the lead in terms of innovation in the consumer space, fintech and financial services, and digital and data talent. So, what do businesses need to consider if they are to embrace this platform economy to attract and retain customers?
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First, they need to assess their existing strategies and take on board the benefits that the platform consumption model brings to customers, namely convenience and personalization. Then, they can potentially redefine their own models to stay relevant to the customer and to uncover the value proposition that platforms can bring to an organization.
The consumer space, nowadays, is all about “experiences” or “journeys”, rather than simple one-off purchases of products or services. Companies need to form platforms around those experiences if they are going to connect successfully with their customers and see profitable growth and scale.
Many companies have already adopted the platform model for this reason: it improves the customer experience. Consumers are getting the innovation they need through an efficient and integrated channel, their demands are being met, and they’re able to communicate openly with merchants through conversations and feedback loops. All these factors help to drive their sense of loyalty towards a brand or brands on that platform.
As well as the consumer sector, B2B commerce could also benefit from a platform approach. Eliminating friction in complex business processes, standardizing business workflows and improving efficiencies are all benefits that can be realized in B2B platforms, which usually follow close behind B2C in terms of adoption. We are likely to see the rise of these platforms and associated marketplaces in the near future.
Peers and partners
Technology is moving so quickly that no single company can be expected to offer everything to everyone. Collaboration between different players solves this problem as it brings together multiple suppliers and advanced analytics, enabled by platform technology, to accelerate innovation to the end user – the customer.
Businesses need to identify where they can stand out, and at the same time, how they can link themselves to a broader ecosystem of peers and partners. If a platform connects clients to other companies that offer related goods and services, it is again adding value to the customer experience. This can already be seen in existing digital platforms via cross-selling channels, mutual loyalty point programs and sharing of customer data, where appropriate.
How is this done? Through open APIs (application programming interfaces). These link a platform to third party services and allow for open collaboration between different players of an ecosystem. This is already happening between banking and commercial players, for instance OCBC’s data-sharing partnership with telecom services provider StarHub. The partnership allows cross-selling to their respective customers, including cash back offers on OCBC credit cards for StarHub customers and broadband packages for OCBC customers. Most recently, Grab announced its collaboration with Mastercard to launch the GrabPay Card, a virtual card which allows users to spend from their GrabPay wallet on the card. With the Mastercard partnership, users will be able to access online merchants and participate in Southeast Asia’s digital economy, estimated to reach US$300 billion by 2025, according to the annual e-Conomy report by Google, Temasek Holdings and Bain & Company. The technology enabling open and secure APIs has matured extensively, meaning various players can now come together and create a rich experience for the customer.
In the case of open banking, mandating banks to make their customers’ data accessible to third parties and encouraging the use of open APIs can encourage innovation and champion collaboration, allowing software developers access to banks’ precious customer data and their core systems upon which so many successful fintech apps are built.
On the flip side, as ecosystems become increasingly digitalized, issues around using data responsibly and protecting that data need to be managed carefully so as not to compromise consumers’ privacy, trust and ultimately their loyalty. Data is extremely important for enterprises as it can be used to build a detailed profile of how customers interact with their brand. Given a particular data set, you can create a product or service, send specific incentive campaigns to customers, and build positive interactions into the customer journey. However, consumers are becoming increasingly aware of their online data presence and customer experience is closely linked to the protection of their information.
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Customer experience can make or break a company. There are a lot of metrics to get right, but those that provide a consistently great experience – and keep improving on that experience – are likely to attract new customers and retain them. Immediacy, relevance and simplicity all contribute to this superior experience. Those that do not prioritize the customer experience are likely to be overtaken. Today, when we want to get somewhere, buy something or sell something, chances are we will use a platform-based service to do it. In Southeast Asia, technological advances and customers’ growing digital demands will offer unique opportunities for companies to apply the platform approach to new sectors in innovative new ways and reap the rewards of customer experience.
This post was contributed by Wissam Khoury, Senior Vice President and General Manager, APAC and Middle East, Finastra
About Wissam Khoury
Wissam Khoury is the Senior Vice President and General Manager for Asia Pacific (APAC) and Middle East and Africa (MEA) at Finastra. He is responsible for driving the company’s regional growth strategy, strengthening its local footprints, accelerating sales and deepening customer partnerships across both regions.
Wissam has over 20 years of experience working with financial institutions, and today leads them through digital transformation and industry developments such as such as Open Banking with cloud solutions and Finastra’s platform for open innovation, FusionFabric.cloud.
Prior to this role, Wissam was Managing Director for the Middle East and Africa at FIS, a global finanancial software provider, where he grew the business and established offices in the UAE, KSA, Turkey, South Africa, Kenya and Pakistan. Before that, Wissam spent eight years as a solution practice manager at Reuters Limited, as well as establishing Misys Middle East’s local treasury and capital markets business as a regional manager.
Wissam has a Master of Business Administration (MBA) from New York University – Leonard N. Stern School of Business, London School of Economics and Political Science, and HEC Paris. He holds a BBA in Business Administration from the American University of Beirut and is a certified Financial Risk Manager with the Global Association of Risk Professionals.