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Finance 2025

Creating Digital Financial Platforms

While society has changed markedly through globalization, emergence of ‘digital natives’ and the nearly-unpredictable breakthroughs brought about by the information age, our financial systems are still largely rooted in the paradigms (and toolsets) of the late industrial age. Whether because of regulation or complexity, financial institutions have not yet been able to tap into the transformative potential of digital platforms.

Millennials are a hot topic in almost all discussions about identifying new markets and products. When looking at the future of financial services and especially digital financial services, understanding the way that millennials use and purchase financial products is key, and much of the research about this demographic leads us to reconsider common assumptions about what these customers want and need.

“Full-Spectrum Innovation is the idea of creating value in every possible place—from culture & society down to end users of a product, service or platform.”

As technological and cultural changes shift the way business is done on a global scale, companies can no longer thrive simply by being the best at one thing. Digitization of the world means that no one approach to innovation is competitive for long, and stable industries are being disrupted by companies like Google and Apple who have begun to master the art of integrating their digital skillsets with those of established partners to create nearly impossible-to-beat offerings.

Organizations who are effective at tapping the entire spectrum of innovation are those who have been able to leverage their own ‘native genius’ while collaborating with other firms, tapping into major cultural trends or getting into deeper relationships with their customers.

Most traditional concepts of innovation are remarkably narrow in view. At first glance, smartphones seemed to be about the hardware, but the genius is that Apple and Google accessed nearly every element available to them—strategic partnerships with music companies, new distribution channels for their products, new business models for tech devices, and highly-integrated customer service systems. By innovating across the spectrum, they not only changed their product but effectively jumpstarted a new industry—and left their competitors trying to catch up.

It’s not just tech companies who are tapping into this full spectrum of value to create next-generation digital businesses. Airlines, manufacturing, basic consumer products, apparel companies and even governments are letting go of long-held assumptions about what they can and cannot do to ensure they survive rising costs and increasingly high customer expectations of quality and engagement.

Creation of multi-sided platforms requires firms on all sides of a market to examine key technological strategies —like enterprise architecture, machine learning, development operations, legacy system migration and security, among many others. It also requires evolution of innovation cultures, especially in larger firms, where the need for interaction with external partners requires finding ways to open up previously protected and isolated departments. As it’s clear that new technologies, new business models and new customer expectations are here to stay.

This article was originally published on Causeit's website as part of a joined research initiative with NTT i3. NTT i3 is NTT Group’s open innovation centre. Dimension Data is part of the NTT Group.