What’s unique about human brain and business?
Need brains to run a business (didn’t know that!).
Well, for a proper functioning of the brain, neurons, and their network plays a key role and so is a business network for any business to flourish.
Tracing back to earliest days of trade, we have seen in the history how traders sailed across oceans to establish their business with an intent to get the best out of it. What this indicates is that no business can stay local beyond a point and if true objectives of the business are to be met.
Period wise, geography-wise and business wise, there can be different forms of business network, but the key is to establish the right mix in an efficient way.
Let’s look at few variants of a business network to understand the significance of it and will then apply it to banking.
With barter system, it was the earliest way of establishing demand and supply equilibrium and then paving the way for niche offering.
Then came the big industrialization revolution which introduced a clear two layers of a business network. One on the raw material supply chain and then the other one on the same consumer side of distribution and supply chain network.
One of the best examples that come to my mind here is Reliance Industries, how they achieved backward integration and then built a vast distribution network and even today same business ethos run this business conglomerate.
A variant of this is – co-operative societies (a personal favorite of mine), this probably to me, comes very close as to how the world should evolve along the lines of a compassionate capitalist economy (borrowing this pet term of NRN).
In recent times, a couple of such coops caught my attention – The Cooperative Group, the UK which practices FairTrade and more recently, one in our own backyard – Organic Mandya (http://www.organicmandya.com/ ).
And then we have the aggregator business model, – Uber, Oyo, AirBnB, Ola, Billdesk which is a very smart way to approach business.
Amazon, probably world’s largest retailer is a great example of how business network comes to the fore at a global level and not to forget Google in the same space.
So what has changed in this digital world of business networking is : it’s not just about building your supply chain (input and output), but now the focus has shifted in creating smart ecosystem of complimentary business so the context is not lost from a consumer point of view and consumer is not let go off your platform.
A simple example – I was searching on Amazon for a premium watch the other day and for rest of my day, most other websites that I visited (not related to Amazon), showed picture of the watch I had seen on Amazon along with one more similar one suggested by Amazon on the right hand 30% of website’s panel, making sure that my mind never switches off from the thought of buying that watch.
In the current digital world, banks are transforming into lifestyle banking. This transformation is being redefined on superior technology platforms creating a smart business network for the banks.
Open banking, PSD2, UPI, Blockchain, IoT and the like assume significant importance in creating a business network for the banks where banks will not be at the center of the transaction, rather will be a partner in the ecosystem either driving, fulfilling, analyzing, prompting or advising a transaction.
Once FinTechs were considered as disruptors for banks. But today reality is banks and FinTechs are working together to grow. Some of the leading banks in the world are nurturing FinTechs and are creating FinTech hubs (real estate wise also) which signify that in the current world, innovation doesn’t happen in silos but together in the business network.
A very recent example in this space is: https://www.finextra.com/newsarticle/30663/hsbc-opens-social-network-for-business-customers?utm_medium=newsflash&utm_source=2017-6-6
For Finacle, this is a great place and time also in two ways – first as a provider of a platform for banks to create and maintain their business network and secondly, to build our own business network to support the platform offering from our side.
As with IoT revolution, just a word of caution here will be to look out for data privacy and data security and not to go overboard in creating a personalised experience, yet retaining USP.
Canara bank’s punch line is – Together, we grow- I think this sums-up-it-well about business networks.