Platform Strategies to Fuel Innovation and Growth

Jim Marous (00:13):

Welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, co-publisher of The Financial Brand and owner and CEO of the Digital Banking Report. To stay competitive, banks and credit unions must evaluate the viability of platform strategies that can provide superior customer experiences, tap into network effects, and leverage data and AI for strategic differentiation.

Jim Marous (00:34):

Our guest on today's show wrote the book for winning in the platform economy. Senior Profit Partner Ted Moser, explores pragmatic steps banks can take to compete in the platform economy, offering examples of creative platforms used by industry giants like Amazon, Uber, and Airbnb. Ted's insight provide a treasure trove of actionable strategies, setting the stage for banks to thrive in the face of massive customer change and massive industry competitiveness.

Jim Marous (01:10):

Ted Moser's newest book, Winning Through Platforms, decodes platform success factors into 24 actionable growth place spanning strategic design, demand generation, innovation, customer experience, and organizational transformation. But as a platform model right for every organization, every bank, every credit union, every fintech firm.

Jim Marous (01:36):

So, Ted, you've been a business advisor to businesses for over two decades with the last decade being at Profit, a consulting firm that states that it helps leaders unlock uncommon growth. So, how do you view platforms as being a source of this unique growth opportunity?

Ted Moser (01:55):

Thanks, Jim. Good to be with you. Let me start at the high level before we apply this to financial services. In general, digital technology has lit the customer journey for companies so the companies can observe, be with and interact with customers through different parts of their journey.

Ted Moser (02:16):

The advent of networked, electronics and the internet let companies around the year 2000 watch the customer go shopping and talk to them as they were making their choices of what they wanted to buy. It was done through websites; it was done through chat. It was done through e-commerce if the company continued all the way through to the sale with the customer digitally.

Ted Moser (02:45):

But at that point, it still wasn't possible for most companies to watch their customers use what it is they had acquired. And that's where platforms came in. Platforms is the technology stack as we define it in the book that lets a company observe their customer as they're using what they've acquired or signed up for, and interact with them during use, and then learning during that use what the next best offer will be for the customer.

Ted Moser (03:18):

And the reason why it drives growth is because if I'm with the customer as they're using, I have higher brand relevance. I have greater information through which to grow the customer's lifetime value. And I'm better positioned to compete for that customer's loyalty through data. And if I can't do those things, I'm at structural disadvantage to my competition.

Ted Moser (03:39):

So, we think platforms is a growth driver in every industry, financial services. It's key when we look back at how the industry has evolved, it's a key element already in how the industry operates. What we wrote the book for was we didn't feel like there was a playbook for competitive moves whether it's to gain advantage or to grow at an accelerated rate.

Ted Moser (04:02):

And so, we thought a competitive strategy book for the platform era would be helpful. So, we studied about 50 companies across industries, including financial services. So, what lessons can we glean? How do we turn that into a playbook?

Ted Moser (04:15):

And so, I think while financial services companies have been at it for some time, hopefully there are ideas in the book that give them fresh thinking. Maybe they came outside of the financial services industry but could be applied within the financial services industry to give them a leg up.

Jim Marous (04:35):

It's interesting Ted, financial services industry tends to take words and explode what the definition is to the point where really nobody knows what it is. So, let's go back a point here and how would you define the difference between a traditional business model, no matter what the industry is and a platform model?

Ted Moser (05:00):

I would say in a traditional business model, the focus of go to market is selling, getting the customer to the point that they buy. The customer then goes dark, and I hope they come back the next time they want to buy, but I'm not in relationship with them as they're using what it is they've acquired.

Ted Moser (05:21):

So, my definition which is very customer centric, it's not about technology, it's what's the tech stack that lets me do that? Is it cloud hosted software? Is it a smartphone? What sort of technology lets me continue to be in touch with the customer as they're using and use data telemetry to understand their use and then interact with them in real time to add value as they are using.

Ted Moser (05:45):

So, if I think of the evolution of banking, it's obvious online banking is a core example, pretty darn regulated. So, not that exciting in terms of new things that everyone's trying. There's a lot of rules around it, but it's still highly valuable to the customer, they now almost take that for granted.

Ted Moser (06:04):

Online investing, another version of finance, lot of action there with artificial intelligence, offering to invest for me based on a set of rules or at least algorithms that let a financial service advisor give great advice. If I think about insurance, the ability to watch me live a healthy lifestyle or not for a different insurance price, or drive my car recklessly or drive my car safely, do I let the insurance company watch me drive?

Ted Moser (06:35):

And if so, do I get a faster claim if there's an accident, do I get a lower price because I'm proving every minute that I'm a safe driver? So, those are examples of use journey, visibility and different ways that either I add convenience, I add better choices, I add lower prices, or they turn into economics by the time it's said and done, they turn into customer loyalty as well.

Jim Marous (07:00):

It's interesting because it really goes beyond digitization. So, it goes beyond the digital aspect of what banking or Uber driving or whatever else may be to really building an integrated platform and a discussion point and engagement where the customer and organization, in this case, financial institution, is actually doing a value transfer that goes beyond the transaction.

Jim Marous (07:26):

So, it really is looking at not just the transaction, but trust, speed, simplicity as you said, within the realm of the entire customer journey. So, what we're really talking about here is the fifth industrial revolution where we're really applying personalization, customization, AI, data, insights, going actually beyond, in our case, financial services to include outside partners to bring value to the equation, correct. And I didn't put in the framework of a question, but that's really what I wanted to do is saying-

Ted Moser (08:00):

I couldn't agree with you more. It's the wraparound that's digitized, that's adding a second layer of value beyond the core product itself. So, it's the either advisory, it's the metadata that I can correlate. Well, if you like to invest in this, you'll like to invest in that. Or the way that I can speak to the driver, "Hey, three days, three trips, you drove it this rate over the speed limit. If you want to keep your price, you've got to keep it under." So, I'm getting coaching as I go.

Ted Moser (08:31):

Or it could be inspiration if I think of what one of the companies we wrote about in the book, Ellevest, Sallie Krawcheck was saying, "Hey, women have different goals than men. And the sharing of those goals in community where it's just not company to customer, but it's customer to customer, sharing their hopes and dreams in a way that makes sense to them all of a sudden creates new inspiration, which then is that extra layer of value that then creates a loyal and satisfied and growing customer."

Ted Moser (09:06):

So, there's many different types of benefits that can come out of this interaction. It's definitely at the intelligence around the product and intelligence around the customer and what they care about that's really being managed in addition to the core product itself. And that's that layer of value that if I added, I come out ahead as a platform company.

Jim Marous (09:26):

It's interesting there's no financial institution that doesn't say that their customer is the forefront and the center of everything they do. They also talk about the fact that using data and AI to build better experiences.

Jim Marous (09:39):

But really when you're talking about platforms, when you're talking about engagement, when we're talking about the entire journey, customer journey, and the integration of outside composable solutions, it's a completely different mindset and business plan than what they've done in the past. So, when you work with any organization, what are some of the biggest challenges they face in adopting a platform business model?

Ted Moser (10:05):

Jim, a couple things. One, as we start with platform design, what's the role of platform in my business? What do I hope it's going to achieve and how do I align everyone's incentives? Because sometimes you've got a situation where the platform might threaten certain parts of the business, the platform might jar internal politics, the platform might connect people into interdependent relationships, where before they were autonomous actors, they didn't have to ask anyone's permission.

Ted Moser (10:37):

But now a decision that one unit makes affects a decision of another unit. And so, there's more interdependence. But one of the things we face is how do I create strategy and aligned strategy so that everyone's headed towards the same north star?

Ted Moser (10:51):

A second challenge is to be ... think about customer coalitions and the development of those as a strategic edge. Companies in financial services tend to start with product lines and who's in charge of which product line rather than customer personas and how do we think about them and their relationship to other members of the coalition.

Ted Moser (11:14):

We talk in the book about how strategic design includes users, in this case, somebody who has a financial account, sponsors who may not be the user but might be wanting someone to use that financial service, service providers, creative experience developers or deliverers, advertisers and rule makers. And we say the way you incorporate certain customer personas and how you want them to interact with each other as part of the design.

Ted Moser (11:46):

So, you're really starting with a spider web of customer relationships as your takeoff point for your design, which is very different from starting with your product line as your takeoff point for design. Your product line is the ripple effect of what you want to achieve with the customer interactions that you want to have.

Ted Moser (12:05):

And so, we find that companies who are more customer centric and are willing to start with a customer coalition development and creating the network effect amongst them, and then working backwards, those companies end up being more successful at platforms than companies who just say, "Let's take our product line and try to digitalize it and call it a platform."

Jim Marous (12:30):

One of my favorite examples of platforms is Uber. It's very interesting because when Uber first introduced itself, it was simply a way to get a clean car for travel. They now have so many different layers of the kind of car you can ask for. You have way to rate your driver, the driver also rates you.

Jim Marous (12:50):

When you're in the Uber, when I was in Europe, I realized this, when I'm in the Uber, it's recommending what I may want to have delivered to my room in the hotel that I'm staying at since they know my destination for dinner that night, or recommendations for food that they know I eat because of their partnership with OpenTable. So, they know the kind of food I like.

Jim Marous (13:13):

On top of that, they're staying now in communication with me for different ways to have rewards, to build relationships through recommendations and things of this nature.

Jim Marous (13:22):

So, you see all these intertwined things but what they're really looking at is focusing on those people that are time-strapped, that are travelers, that are willing to try solutions outside of travel but building loyalty that way.

Jim Marous (13:37):

So, what's happened is I don't ever consider an alternative shared vehicle. I look forward to the recommendations and to the point where now they'll give recommendations as to things you can do in the area which gets me to my second platform I love, which is Airbnb.

Jim Marous (13:53):

Airbnb provides you different ways of staying in a city, but for those who aren't familiar, they also have something called Airbnb experiences that are one-to-one experiences in the city you're visiting that they keep track of what you've liked and it ranges from having a dinner in somebody's house of local foods. It can be, let's say, in my case, a walking tour, a bike tour, a cooking class. It can be a kite flying class, it can be seeing historical areas, but in a very tight, very small group of people, very personalized.

Jim Marous (14:27):

Now there's no really that much money to be made by Airbnb in this, but it builds the overall relationship on a platform basis. So, in your book Winning Through Platforms, you highlight a number of case studies like I just brought up of platform powerhouses. Did you find any singular thread as to their approach that banks and other organizations can learn from in their journey to get a platform?

Ted Moser (14:53):

So, I think the Uber approach and the Airbnb approach raise two interesting takeoff points, if I could use those. Because Uber decided at one point in time to build a richer customer coalition than just taxi driver and rider, and they added restaurants, they added e-commerce shipping. They added home delivery of products from the local metro area.

Ted Moser (15:19):

A couple of things they're able to do, they're able to now offer an Uber One loyalty service that if I sign up for it, and ironically, I pay Uber some money every month for it, but then they give me price breaks that are much greater than what I'm paying, it's a new innovation called Loyalty-as-a-Service. And you've got to make it clear that what you're going to get is a great deal for what you're paying.

Ted Moser (15:44):

Amazon Prime is another example of this. Pay me 150 bucks a year and get 800 bucks a year worth of value if you're loyal to Amazon. So, it's bizarrely making me put money in this game to be loyal to the company that I just paid to be loyal to. But it's because they have such a wide set of services that make it interesting.

Ted Moser (16:03):

So, you've got to be able to think outside of your traditional boundaries of your market in order to often get to relevance points that trigger such loyalty. And I think financial services companies have struggled with how far outside of the boundaries do we get? Are we willing to think that way?

Ted Moser (16:23):

Now Airbnb, to your point started out just on a gleam of how do we make our stay more interesting for our clients? So, they thought in the periphery of the client experience, that they thought, "Okay, the core experience is the Airbnb house. But if I'm sitting at a house in Morocco on my vacation, would I like help with the camel ride company? And if so, could they add more value to me and would I attribute the thanks of that to Airbnb and start to view them as a more creative company?"

Ted Moser (16:59):

So, I think when we look at brands, financial services companies score high on one out of four dimensions that define a strong and relevant brand that's pragmatic problem solving. Keep my money safe, let me know what my balance is. Let me get money out of an ATM close to me. There's a lot of concrete problem solving that banks are great at, financial services are.

Ted Moser (17:27):

The other three dimensions are highly innovative, are critical to my life and are inspiring to me thanks to their values. And if you draw a picture of the brand equities of banks, that looks a bit like a long-tailed diamond, sort of short at the top, short at the sides, and long at the bottom towards the pragmatic problem solving.

Ted Moser (17:56):

If you look at Apple or Samsung who are now obviously trying to encroach through payments into financial services, they are beautifully proportioned four strong dimensional diamonds. Highly inspiring, critical to my life, couldn't live without that phone. Highly innovative and pragmatic.

Ted Moser (18:19):

And so, I think banks need to open that aperture to say, "What could we do that maybe is linking into community, maybe is linking into experiences on the periphery of financial services, but not in the core. Maybe thinking of value-added thought leadership on the periphery, but not just in the core to create greater daily relevance as brands?"

Ted Moser (18:44):

And then inside of that, obviously I've got my profit model and my business design around financial services delivery, but I think you've got to have mental flexibility to say, "How do I get to the relevance zone as my package of offerings?" And that's really, I'd say what Airbnb and Uber have in common as a point of advice to financial services companies.

Jim Marous (19:09):

Well, it's interesting too because when you look at a traditional financial institution that looks at saying, "We're going to deliver something efficiently, it's going to be kind of like cookie cutter because it's not going to have much ... there's no risk involved. And on top of that we're going to be dependable. Those are all good things to have, very important things to have but they're not differentiated.

Jim Marous (19:28):

I look at American Express and I've had a platinum card for a number of years. It wasn't for prestige, it was so I could get in the clubs in the airport. It was so that I would get Uber. As you said earlier, if I took advantage of all the things they provide me on a monthly basis and OpenTable, Uber, different other platforms that they give, you're going to more than make money on the relationship, you're going to get more than you put in.

Jim Marous (19:53):

Amazon Prime the same thing. And what's interesting is the more you work with these organizations, the more data they collect. We talked about this before the podcast that back in the banking days that I was starting banking, the retail machine that looked at the cards was a dirty business.

Jim Marous (20:16):

You had to go to every retailer, you try to make it so it was your company that was doing the machine because you'd get the data, but nobody knew what to do with the data. And all of a sudden they gave up the product line, they gave up that relationship. They no longer are servicing those companies. But it was interesting because Amazon said, "We'll take that."

Jim Marous (20:32):

And what they did is they now know more about me than I know about myself, they know how to connect my purchase decisions with my behavioral tendencies. They know just like Uber does, exactly where I go and what I'm interested in to a degree that any bank would love.

Jim Marous (20:49):

And what happens then it gets harder and harder over time because I'm continually feeding the engines of the older organizations. So, if you were to look for a power play that banks could actually execute to acquire customers and enhance the value of their relationships, what would it be in a platform economy?

Ted Moser (21:09):

I think the question of how to more creatively help people gain wealth, manage wealth, have more wealth in order to need a financial institution to help, I think creating more creative community-based sort of spiderweb relationships around prosperity could be an angle because the bank's equity, if the bank knows enough how to manage your money, would you believe that the bank could help you learn how to make more money?

Ted Moser (21:45):

It almost takes you into a field of life advice that has to do with more than managing money, but probably the creation of that. And so, you can then also do what I see some banks doing. Can you create a point system for loyalty that you can spend outside? But that feels a little bit like a weaker value proposition, less engaging. It's more transactional, it's more incidental.

Ted Moser (22:15):

I think the question is what's core that's outside the managing of actual wealth that is relevant to that customer but connected enough to the topic that the banks would have enough brand equity to go for it.

Ted Moser (22:31):

And I think in this age of people sharing with people how they got ahead and the ability to take snippets of financial advice or training and linking that to career and professional development, I think there could be an interesting space if we want you to gain wealth as well as manage wealth. That's just one example of Jim, that could be a vector that you could work on that would help raise the relevance of a financial institution.

Jim Marous (23:05):

Because of the fact we did a podcast with a company called SpringFour yesterday, I'm going to take an opposite view of it and say you can do the same thing on wellness. Where organizations could work on behalf of the consumer to say, "Here's ideas on how to do better when times are bad. Here's a better way to determine who you should pay if you can't pay everybody. Here's ways to look for jobs at a time when jobs are hard to come by or how you can get new skill sets."

Jim Marous (23:35):

These are all services that the consumer really, if they look deep inside themselves, they won't believe that a financial institution can do that. But if they were looking for somebody that could do that for them, the financial institution is who they would trust. And again, I keep on getting back to the whole thing of no longer being a money transfer business but a value transfer business.

Jim Marous (23:56):

If you can provide value beyond the transaction, beyond just trust, which we saw what happened last March when the trust in financial institutions went down almost in a nanosecond. That's a very key component that we take for granted.

Jim Marous (24:11):

But when you look at who's going to be empathetic, that's a different way. Who's going to be proactively empathetic, looking out for my best interest, knowing that if you're good at that, you're not only going to keep that customer, but you're going to get referrals, it may not be the highest asset person, but it will be a value transfer.

Ted Moser (24:30):

I think what we just talked about is different demographics, age and life cycle as well as income level. What there's in common between what I shared and what you just shared, is it puts more money in the pocket of the customer, thanks to the advocacy of the bank.

Jim Marous (24:49):

No doubt, exactly.

Ted Moser (24:50):

Whether lowering the cost of living, finding the job, or learning how to advance, the bank wants me to be wealthier not just because I did better in the stock market, I may be part of it, but also because I took their advice and I'm living a more prosperous life. And if my bank is my prosperity advocate, I think that's just an example of moving to that adjacent space.

Jim Marous (25:10):

Yes. Great example. Well, and it's also, it's broadening the platform on what banking means. What a shared vehicle means, what an experience means. And there are a lot of people I've talked to that said last Christmas, instead of things people said, "I'd like to have my family give me experiences." I think that's what people are craving for overall.

Jim Marous (25:33):

And every organization can do that if they have data, respect and trust, and if they can deploy it, if just having that data is not enough. So, Ted, let's take a short break right now and recognize the sponsors of this podcast.

Jim Marous (25:47):

Welcome back to Banking Transformed. So, I am joined today by Senior Profit Partner Ted Moser. We've been exploring the challenges, opportunities and key strategies presented by platforms.

Jim Marous (26:03):

So, Ted, with the markets becoming platform crowded, how can banks differentiate and stand to regain a competitive advantage when they're competing in some cases with American Express, Apple, various different, not just wallet, not just Apple engagement on a phone, but wallets going deeper than just a transaction. How do financial institutions look to differentiate in that environment?

Ted Moser (26:33):

So, in the book we talk about several types of plays. The book is set up as a playbook, much like a sports team would have a playbook. Since football season's on, my passing plays, my running plays, my defensive plays, et cetera. If I have a playbook, there's no one always right answer. It depends a little bit on what the situation is on the field, who the competition is.

Ted Moser (26:56):

But we've tried to create 24 plays and structure them in different types of plays, so I can choose the right play that I need to deploy in the right moment. So, for instance, some of them are around design of my platform. And you and I talked a little bit about how broad is the vision and what's the customer coalition. So, we talked a little bit about design in the first part of this discussion.

Ted Moser (27:23):

Let's move on to some other types. There's demand plays of how I link brand to demand, how I be with the customer as they are using what it is that they've taken from me in terms of access for me. And there's new disciplines like what we call momentum marketing, which is beyond customer success but before cross-selling and upselling.

Ted Moser (27:47):

And how do I measure momentum marketing and understand the level of momentum I had with customers? There are whole new disciplines that didn't exist before because I didn't have that visibility. How do I add value in real time with real time advice often through AI, those are some strong moves coming in. We talked about that in a chapter called Brands Get Brains, and how do I let the customer experience my intelligence in the most robust way possible?

Ted Moser (28:13):

There are new ways to envision a future, sometimes AR/VR play into those in terms of applications that lets me get beyond where I am today and think about what a different future might be like. We talk about folks like Nike and their ability to bring in exactly the right content at exactly the right time during the right experience.

Ted Moser (28:39):

So, they carry out a platform value added in a pretty dynamic space, which as I'm exercising, as I'm running, as I'm thinking about my next sneaker, they go beyond the normal to say, "How do I do NTFS and sneakers? How do I create designer sneakers? How do I give myself scenic views that I can run in even if I'm not actually there to make my run more enjoyable? So, how do I think about taking technology to the next level so that I enrich the experience of my customer?"

Ted Moser (29:12):

So, I think there's multiple types of plays and multiple points of inspiration. In the book we say learn the playbook and find your plays as sort of the mantra. Find which plays are right for you for the next three years. So, I think my advice would be get a playbook. Maybe it's this book, maybe it's another, but we've tried to write it so that if a team of folks at the financial institution learn the playbook, they'll have a shorthand, almost like grandmasters and chess do, they have a shorthand for what a whole move looks like. And another grandmaster will recognize what that means.

Ted Moser (29:48):

And I think that's the kind of idea that we're getting at here. Get to a shorthand of sophisticated moves you can make and figure out which ones you want to deploy given what the field looks like for your business at that moment in time.

Jim Marous (30:04):

Boy, that's so well said. And it's interesting because what you're really talking about is saying we can't be in a reactionary mode anymore. We almost have to have that vision such as a gamer that says what's going to happen, 7, 8, 10 moves down the down the field so that I'm prepared for that. Now if those don't happen, you're still better off because you've knocked off some learning that you would've not had elsewhere.

Jim Marous (30:27):

And when we look in this framework and we look at fifth industrial revolution, you look at the personalization, the customization, the predictive analytics towards what a customer wants to build in a platform business. How do you foresee generative AI playing? Because obviously in content development, in developing personas, things of this nature. This is really big when you're looking at what you're trying to achieve in platform, generative AI kind of gets you there quicker, doesn't it?

Ted Moser (30:56):

It really does. I think generative AI lets you ask more complex questions and get more complex answers back than classical search does. And so, it's really a value. It's an insight extraction technology in financial services. Obviously, if I'm applying gen AI in the movie business, I can make a movie, I can generate a character, I can do other things. But in this case, I think it's getting information that's a complex question, complex answer.

Ted Moser (31:27):

So, one of the things that then that raises is, "Can I get trusted advice from Gen AI because there tend to be a few problems with it?" One, it's only as good as the data that trained it. So, if the data has falsehoods in it, it'll play back the falsehoods pretty consistently.

Ted Moser (31:45):

Secondly, it tends to want to overshoot and actually extrapolate answers. And if I'm in the music business, it looks like creativity, write a song. But if I'm in the financial services industry, I don't want creative answers, that might be wrong. So, how do I curb it, sort of desire to overshoot?

Ted Moser (32:04):

And then how do I make sure that advice isn't hacked and polluted by someone in the very act of giving it. So, there's trusted Gen AI which is I think could be another role of how do I get trusted AI advice rather than sort of AI on the street advice that's maybe not as curated or maybe not as protected.

Ted Moser (32:27):

So, I think there's a new value-added layer for anyone who has security issues that it's not your grandfather's security anymore. It's using technology to go after mistruth that may be intentional or unintentional and use technology to guard the customer there.

Ted Moser (32:46):

So, I think there's a lot of opportunity from the point of the bank being that advisor, and that if we combine that with our other conversation, is it just advice in this narrow financial services world? It could be around how to make my budget around da da da da dah. But it could also be advice in that broader area that we said if we had a broader scope, helping me to come up with answers and solutions there as well.

Jim Marous (33:11):

Well, and also anybody who's used ChatGPT or any of the other platforms, it's really in the development of questions as opposed to the explosion of answers. And my belief is that if you can continually revalidate your answers with the customer, you have the ability to build trust through, "Oh, someone's listening to what I'm saying."

Jim Marous (33:33):

And they may have come back with the wrong solution, but as you said, the humanization of this and involving humans in the process, I don't have a problem with somebody getting it wrong if in their question it shows they listened to what I said the first time. But that keeps on getting the validation better and better and makes it so the future recommendations are more valid and better.

Jim Marous (33:56):

And in each one you get right, you say, "Oh, you get it. I'm going to give you more information." It's Amazon in its best work. Everything you buy, it gets better at what you are going to want. And it will also ask you, "Did we get this right? Did we do what we want to do?"

Jim Marous (34:13):

The future of platform economy, the future of building business models in a brand new way takes one major thing. And that is to be able to open your mind to new ways of doing things without shutting it down before you try it, and it all makes sense. It's not easy, but there are so many tools out there.

Jim Marous (34:33):

I think you and I have discussed the fact that really size of organizations does not determine the success of a platform model because you can shoot higher, wider, bigger, or you can keep it within the subsegment of who you're trying to serve.

Jim Marous (34:47):

So, Ted, as we wrap up here, what would be the first step a business leader, a banking leader should take when they're considering a transition to at least part of which is a platform business model? What's the first thing they should do or embrace?

Ted Moser (35:02):

So, how about two things, first thing they should do, and the first thing they should embrace I think would be great because they may be two different answers. I would say pick up intellectual property, like what's in the Winning Through Platforms book, familiarize yourself with a platform chess, if you will like Winning Through Platforms is trying to impart. Because most of us went to business school and learned how to win through product lines. That's not what it was called, but that's really what it was.

Ted Moser (35:30):

The assumption was you're in a product line business and the ways to win were product line moves. So, many people need to sort of retrain their way of thinking for a platform era. And that's what Winning Through Platforms is trying to bring about. So, I'd say start with learning the playbook as basic as that sounds.

Ted Moser (35:48):

From a point of view of what to embrace, we have many chapters on culture shift and I think those are critical. One of them is called think in terms of kaleidoscopic value. Well, in a real kaleidoscope, 24 pieces of glass and two mirrors gives you a combination of beautiful images that has 30 digits to it. It's a massive number, but it's because you're reconfiguring the combinations of how it looks to the user. And platforms take data, software code, APIs and do that same thing.

Ted Moser (36:28):

They need to give everyone a beautiful view to them, back to the Uber driver and the Uber rider and the restaurant owner. They're getting different views from Uber that just fit them. And so, it requires customer centricity, understanding what value looks like in every part of your customer coalition. So, embrace the complexity of a customer coalition over a single customer and the inner relationships between them and what value looks like to them.

Ted Moser (36:54):

Secondly, commit to good for your customer if they let you have your data. Customers are very wary of coexisting with companies who are out to exploit them if they see their data. And banks might have a reputation where they might be influenced to believe the bank is going to use it against me rather than use it for me. So, commit to this mutual gain of new data transparency.

Ted Moser (37:18):

And then finally deal with the fact that a lot of the talent in your business has built their careers through being siloed owners of assets that they can say, "Those are mine, this is my product line and I'm going to build my career by doing a great job with it.

Ted Moser (37:38):

Platforms require shared contributions to a shared asset, the platform, and it's a real threat to a lot of the talent in your business. So, how do you think about incentive systems? How do you think about monetary and non-monetary rewards for those who really commit to platform-like behavior?

Ted Moser (37:56):

Because trying to graft a platform on top of a culture that is product line at its core will lead you to wave at platforms and not really get a lot of traction. So, I would study hard, the idea of culture shifts and capability shifts as well as, and I'd embrace those as well as I would get to know the playbook. And I think those two things would empower me as a leader to step out in a new way.

Jim Marous (38:26):

Ted, thank you so much for being on the Banking Transformed Podcast today. It's interesting, it's always good for me to learn from authors because they've done the work, they've done the hard work, they've done all this learning to be able to put together a guidebook in your case, a playbook, basically a toolkit for financial institution executives.

Jim Marous (38:46):

I highly recommend Ted Moser's book, the Winning Through Platforms because I've read it and it's interesting. While I may not agree with everything in the book, there are so many ideas that we have to do as an industry, no matter if you buy into platforms or not.

Jim Marous (39:04):

And I personally do, I think it's the only way forward, but it's really good because it's an easy read, it's a good read and it's going to give you ideas that say, "Geez, we've got to really do this." So, Ted, again, thank you so much for being on the show.

Ted Moser (39:19):

Thank you, Jim. It's a pleasure.

Jim Marous (39:22):

Thanks for listening to Banking Transformed, the top podcast in retail banking and the winner of three international awards for podcast excellence. We appreciate the support we've received to make this endeavor a success. If you enjoy what we're doing, please take some time to show some love in the form of a review.

Jim Marous (39:38):

Finally, be sure to catch my recent articles on The Financial Brand and check out the research we are doing for the Digital Banking Report. This has been a production of Evergreen Podcasts. A special thank you to our senior producer Leah Haslage, and our audio engineer and video producer Will Pritts.

Jim Marous (39:55):

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