The digital transformation is driven with breathtaking pace by consumer demands. In this ever changing disrupting world, companies of different sizes are dating more and more frequently to keep up with their customers. But it's not sufficient to be a part of the dating scene and create power couples. You need to look at the whole digital ecosystem to find your place in the new era.
Knut Anders Wangen is the Head of MobilePay in Norway. MobilePay was developed by Danske Bank, and is now being set up as its own company with an open invitation to all banks in Nordics to become MobilePay Partners. Wangen is in the midst of a tough race to introduce the payment solutions of the future to Nordic customers.
He believes that the concept of power couples - i.e. partnerships of different sized companies with unique characteristics that complement each other- is workable, but not easy to pull off.
His advice is that businesses should look wider: Companies containing different assets must identify what kind of ecosystem to fit into. And approach them with a clear value proposition - the promise of value to be delivered, communicated, and acknowledged.
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CEO of MobilePay, Knut Anders Wangen
I really believe in partnerships, but it's not important that there is a small company joining a larger. By all means, it could work, and the idea of power couples is good, but more important is the plurality of the digital ecosystems. You have to figure out where you fit in, he says.
In the ecosystems of the digital era, companies have to analyze and identify what's actually needed and where their business concepts and traits are most likely to flourish. The common perception is that the small innovative companies have speed and agility, while the larger have wider distribution and a huge amount of capital.
Different businesses must be aware of what they are actually gaining from a partnership all the time. They have to find what's needed within the ecosystem. As partners we have to stay focused on the customer perspective. We in the banking sector need to know as much as we can about our customers needs and preferences, Wangen says.
Spin off effects throughout every industry
He believes in direct, open dialogues between all partners in the ecosystems.
If you think you need a facilitator as a third party, the partnerships will never succeed. The aim is to expand the pie in the market, not split it into pieces, Wangen underlines.
A balanced dialogue becomes even more important when large companies cooperate with smaller entrepreneurs. In the financial sector there are some distinct challenges; security and privacy issues are directly affecting the customers.
Banks have to work within these boundaries, but many large financial institutions still have to find a middle ground where they can simplify the terms in the contract with smaller businesses. If not, the larger companies risk losing both speed, progress and potential partnerships.
He explains that the payment industry is attracting lots of capital and money, in addition to agile, speedy players from all around the world.
These players don't necessarily have their roots in the banking sector, which makes the competition even fiercer. This is a big, competitive scene driven by consumer demand. The digital disruption is rapidly changing the financial world right now, and there are no boundaries across the industries. There are spin off effects driven by for instance the mobile sector into other industries. The consumers expect nothing less, perhaps even more from the financial sector, Knut Wangen claims.
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Change from within
The CEO of MobilePay says they have to make sure that the digital transformation happens throughout the organisation. Wangen repeats that speed and innovation are what’s needed in this age of digital disruption.
It is essential how you meet and greet your customers. We have to interact with customers who are changing their preferences. The main objective is to have a customer centric approach rooted in the fundamental strategy. My experience is that banks such as Danske Bank and Nordea, are very vocal on top management banking, with the aim that digital transformation becomes a culture within the bank.
Danske Bank Group employs more than 19,000 people and operates in 15 countries.
This is a very important topic. Banks that are perceived as innovative on the outside, becomes very vulnerable if they are not seriously adapting the digital change internally. If you isolate the innovation initiative in your own organisation, you may be able to think differently and not take into account the legacy and history from 200 years of banking. On the other hand; the isolation could result in losing the spin off effects that you need to make a much needed cultural change, he says.
Define what you are as a company, and what you need. Then it's much easier to fit into the digital ecosystem.