Case Study Number 4: The Banking Industry
Platform-centric companies such as Google, Amazon, Facebook and Apple (GAFA) have been disrupting numerous industries - music, media and telecommunications – with an insane appetite for innovation and acquisitions. Google acquired smart thermostat maker Nest for $3.2bn in 2014; Apple launched Apple Pay, its own mobile payment and digital wallet service. In less than 15 years, the combined market cap of these platform-centric companies has exceeded $1.7 trillion with revenues in excess of $300 billion.
This leading international bank was fearful that GAFA would enter and disrupt the banking industry. Ariadne Capital partnered with the bank to help them shape The Future of the Banking industry and identify the right business model innovation.
Ariadne Capital’s research indicated that the most profitable and suitable market for the bank was digital identity. This one-trillion dollar industry would enable the bank to provide digital identity in order to enhance its value proposition. This approach also allowed the bank to neutralise the threat from disruptors.
In order to explore this opportunity, Ariadne Capital conducted deep market scans of 20 Digital Enablers across the globe.. Ariadne Capital assisted the bank in the subsequent business viability of these Digital Enablers. One of the startups identified during the scanning process has since partnered with the bank.
This international banking group exemplifies Ecosystem Economics for the following reasons:
1. This bank is a non-tech company which has partnered with a Digital Enabler
2. They successfully built digital revenues through this partnership
3. The international banking group is essentially becoming a platform, acting as a distribution highway to selected Digital Enablers