Platform Business Model: The best is yet to come!
Sanjib Dutta
In November 2019, Google announced that it will offer smart checking accounts. Google will offer this service in 2020 in partnership with Citigroup. Platform players such as Facebook, Apple and Amazon have already got into credit cards, payments and loans which were earlier dominated by traditional banks and financial services players.

The platform business model is disrupting almost every industry and banking and financial services is not an exception. Platform players are giving serious competition to the traditional banking and financial services players. The vertically integrated industry value chain is getting disintermediated, altering the industry landscape across geographies.

The big tech players such as Amazon, Google, Apple, Facebook, Alibaba, Baidu and Tencent are acquiring new customers and offering products and services on their ecosystem as Orchestrators, while their Partners are taking advantage of the ecosystem and creating competitive advantage through their products and services. The disintermediation of the traditional vertically integrated industry structure is real and has far reaching consequences. The cost advantage of the platform model lures firms to be partners in this model. The network effect of the platform model makes it a sustainable business model with long term customer stickiness and revenue opportunities.

Traditional firms need to alter the way they do business to survive the onslaught of the platform players. We may see the death of vertically integrated business model in the future and the platform model getting deeply entrenched in every consumer activity. The best is yet to come!     

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