In China, The Disruption House Co-founder Haydn Shaughnessy explained at Innotribe at Sibos in Singapore, platforms were often set up to provide low-cost global support for small businesses. What started out as a focus on small business, however, now provides everything from working capital for companies and credit for consumers to logistics. And far from resting on their laurels, platforms are continuing to create adjacencies such as services that enable customers to book a movie ticket, book a ride to the movie, rent the movie and more on a single platform.
Shaughnessy believes that the next areas of focus for platforms in China will be foreign exchange (FX) and procurement. Once these platforms can do competitive automated FX, he said, it won’t take Alibaba or Amazon long to incorporate it as well.
Alibaba, which handles 80,000 transactions per second at peak times, provides an example of how platforms in China have been developed. Its model is to use open source technology architected as a business process, with business leaders rather than IT setting the goals.
The implication for banks, Shaughnessy said, is that they need to think about how to shift from seeing IT as infrastructure to using it as a business driver. “It is not a technology challenge,” he said, “it is a people challenge.”
Platforms for financial services
Kapronasia Director Zennon Kapron then discussed how platforms in China such as Baidu and Alibaba provide a broad spectrum of financial services.
Baidu has used big data, Kapron said, to transform wealth management. It identifies investments for investors, has beaten market returns, and enables investments as small as 100 Renminbi (US$16) into wealth management products.
Alibaba has created an entirely digital ecosystem that includes online-to-offline commerce, education, logistics, film, television and even football. They also have programs that enable Chinese students to study abroad. One of the biggest and most recent shifts, Kapron said, is the move into banking by Alibaba affiliate Alipay, which set up MyBank as an entirely digital bank and has also developed a credit scoring system that wraps the bank around new technology.
These innovations have government support, Kapron said, because solutions such as peer-peer-to-peer lending fit the government path to reform and solve problems such as bringing loans out of the shadows.
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