In the recent past, we have observed that the Banks are in a dilemma whether to procure products from a product vendor or get a platform vendor to build features based on their requirements. If this debate had happened a decade ago, probably the Product strategy would have won hands down as the platform vendor would have just provided an API or SDK whereas the product vendor would have provided an end to end solution for a specific problem. Platforms have come a long way and in the current generation, banks are prepared to embrace the transformation in the platform play. Offering tools and software development kits for rapid development and deployment can get you only halfway there. You need to have a system or a process in place which can deliver the information you want to deliver and reach the destination. But there is an internal cost for operating those systems.

One needs to clearly understand the trade-off between Specialists vs Generalists.  Product vendors are specialists in the solution they provide as they have complete expertise and that is their core competency. The platform vendor provides a whole solution and not necessarily a point solution. This might provide the advantage of delivering more variety at a lower cost, but the key factor is solving complex and complicated problems which might be solved easier in silos than by a platform.  Solutions are limited to the technology architecture of the platform and the architectural concerns for refactoring is more expensive in platforms than in silo solutions. Product vendors who were very stubborn earlier, have started to build modular systems with open interfaces and are adaptable to the changing needs, keeping pace with the rapid innovation.

Coming from a product background, my view is that the Products are specialised components in solving specific problems which is a monetizable core asset.  If they extend themselves as a platform with certain purposes enabling interactions and open to external ecosystem and expand the marketplace rather than keeping it fixed, then we are looking at a totally new horizon. Componentization and Collaboration can have the highest disruption rate ever. This becomes a magnet and can be a source of competitive advantage that creates value to the entire ecosystem apart from the value it creates internally.

Companies such as Facebook, Amazon, Google have capitalised on the core Product by extending as a platform for collaboration and having communities to add value. Products thrive on feature differentiation which makes them distinct, but allowing the entire ecosystem to add value becomes a holy grail for Innovation.

Extending Products as a Platform with Purpose is a key element of innovation strategy that is Connected, Collaborative and Scalable.

Karthik Raman

Karthik has over 22 years of techno-commercial experience in the IT industry. As Chief Innovation Officer, his responsibilities span across strategic technology initiatives, new product research, program design, product management and development to position Clayfin as a FinTech Innovator. In his previous role at Clayfin, he was the COO & Head Engineering and provided leadership to Customer Success & Solution Innovation Center.

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