Disruptive innovation: Designing business platforms for new financial services

Business platform models often achieve industry disruption through the elimination of barriers such as time and space by implementing smart and sophisticated software that captures, analyzes, and exchanges huge volumes of data. Central to business platforms is their online participative infrastructure that facilitates interaction between many external producers and consumers where the exchange of goods, services or social currency enables value creation for all involved. This study adopts an exploratory approach to improve existing understanding about the strategies that financial platforms implement. In addition, we explore what incumbents are doing to ‘survive’ and if the measures they are taking are sufficient to achieve survival. Further, we examine whether customer-focused strategies, such as Experience-Based Offerings (EBOs), provide the best solution for financial service firms to gain competitive advantage. The findings show that strategies can be implemented successfully by integrating technology to improve, personalize, and customize customer experiences, while managers and employees can add quality to experiences. This study contributes to our understanding of business platforms by identifying how they are designed and managed, and how incumbents can learn from them to respond to the challenges presented by today’s rapidly changing consumer behavior. Based on our findings, we extend existing conceptual models that can be used to achieve platform-based financial service goals.