Many organisations are gearing up towards becoming data-driven ecosystems through platformification, B2B, and B2C alike. But what happens when AI-powered platforms start to automate consumers’ buying actions? During the Finovate Europe conference in Berlin (February 2020), a highly-anticipated platform for the best of Europe's fintech featuring unique, short-form demos, keynote speaker Steven van Belleghem presented two possible future scenarios for platformification.

Today’s leading bigtechs including Amazon, Tencent, and Alibaba, are about to cause overwhelming disruption across the globe. How have they become so powerful?

Steven van Belleghem: “Today’s winning platforms have managed to excel on three points. First, they are extremely focused on fulfilling customer expectations. The Chinese ecommerce giants, AliExpress, and JD.com, can even predict almost real-time what shoppers will do or buy, leaving them less time to think for themselves. Secondly, big platforms provide sophisticated levels of personalisation and can anticipate customer needs as they arise, or even before. Thirdly, ease of use has been optimised down to the smallest details, both in technology and in the customer purchasing process, e.g. by using fewer buttons, a great UX (user interface) and free delivery.”

Which scenarios do you see emerging?

“To answer this question it helps to ask yourself what the endgame would be of, let’s say, Amazon. The answer would be to ensure the end goal could be to have as many transactions as possible pass through its platform. In this process, AI is going to help make things much easier for consumers. The most far-reaching tool will be the voice-assistant which is still in its infancy. Yet, one day, consumers will be able to start ordering products through a voice command, and here the relevance of - and emotional connection to - brand names becomes important".

Could you give us an example?

“Let’s take the toothpaste example, e.g. ask, "Alexa, order Colgate toothpaste." It's that simple; Alexa will bring you the Colgate brand. Yet more interestingly, what happens when you ask, "Alexa, I want batteries." Will you then receive a. ‘Amazon-branded’ batteries, b. Duracell-branded batteries that have passed through the Amazon product filter due to the availability of Duracell data on the platform? And why not option c. why did Panasonic-branded batteries not pass the Amazon product filter? Due to a lack of available data or something else? Because this is what AI does: it becomes a filter on top of our daily lives, similar to the Facebook algorithm that determines whether we can access certain content or not. Algorithms in fact steer our thoughts in one way or another and if you can do the very same with products, then you've created a product filter. And guess what, if you own both the filter and the platform, you have a powerful proposition, like Amazon has.”

Where does the relevance of brand names come in?

"You want people to explicitly ask for your brand or product. That's why you need to invest in branding more than ever. Another important point is to build as strong a relationship as possible with the end customer, even if you are working in a B2B or intermediary environment. Ultimately, it’s the end customer who decides the power and relevance of your brand, so the better the relationship, the stronger your position as a brand. And this brings me to the second scenario; the one that succeeds in embracing and serving the end customer best.”

“At the end of 2019, Nike decided to break up with Amazon and instead focus on "elevating customer experiences through more, direct, personal relationships". Which is a bold move when you have a turnover of US$33bn, of which already US$11bn is made through webshops and stores. I believe most of the companies will end up in some sort of hybrid model, on the one hand they will need the big platforms for sales, and on the other they will need to focus on the end customer and not entirely depend on those omnipotent platforms. Only the functionally and emotionally strong brands will truly be missed, and thus be actively looked for. The functionally strong and much liked might not be actively sought after, but will be found due to good reviews; the rest will remain invisible and will disappear. It is therefore imperative for brands to maintain good relationships with their end customers.”

 Talking about customers: anyone who wants to know what future consumer behaviour looks like should look east. What is happening in China?

"In China, we see the unprecedented power of AI and IOT combined, called AIOT, e.g. in facial recognition technology; often leading to situations that citizens in the Netherlands, Belgium, or Germany feel uncomfortable with on grounds of invasion of privacy (see box). Not amazingly, people are creatures of habit and about 80% of the things we eat, do, or buy are largely the same. So you can recognise patterns and anticipate accordingly. As a result, customers end up in a world where they are no longer part of the purchasing cycle; yet certain purchases are simply outsourced to a machine: the washing machine that orders its own detergent, the Samsung refrigerator that indicates which products are missing. We are entering a world of far-fetched automation where a number of decisions have been outsourced to a machine, without us having to worry anymore. Does this sound like science fiction? Remember the day that we decide to rely on car navigation instead of traditional maps.”

Changing consumer behaviour

At Stater, the Dutch mortgage service provider, end customers can directly access the platform to engage with their mortgage provider and expect a smoother customer experience. “You don’t want customers to start complaining. The trend is unmistakable. If you're looking for a new bathroom faucet, you don’t visit CoolBlue or Bol.com but directly access the Grohe website; this is a big change in consumer behaviour with far-reaching consequences.” In the near future, financial products will be driven across the platform, e.g. instead of buying a separate mortgage product, customers will be able to buy a house in close partnership with trusted third-party providers in the housing market.

What does platformification mean for FS organisations?

“AI-powered platforms such as Google Home and Amazon Alexa are going to completely overturn the way consumers interact with brands. Steven van Belleghem: "FS organisations, including B2B corporates, should therefore ask themselves: what benefits can we offer our customers and what needs to be done to achieve this? Key to this process is the question: what can we do ourselves, what do we outsource, and what are we in control of? In addition, FS organisations need to surround themselves with an ecosystem of interesting small technological parties that have the expertise and talent on board to ensure speed and access to the right talents. Not everything has to be a US$100m project, start with the quick wins that can easily be implemented for customers and, above all, stay pragmatic. My advice is – to quote Stephen Covey’s well known phrase – “Begin with the end in mind” and do some reverse engineering: what do I need to do today to make a difference for our customers in the future?”

The multiple faces of facial recognition

Many countries have turned to facial recognition technology as a way to combat the spread of the COVID-19 virus. In China, facial recognition technology has become part of the fabric of life. In December 2019, the Financial Times reported that Chinese technology companies were shaping new facial recognition and surveillance standards at the UN, according to leaked documents obtained by the publication, as they try to open up new markets in the developing world for their cutting-edge technologies. Companies such as ZTE, Dahua, and China Telecom were said to be among those proposing new international standards in the UN’s International Telecommunication Union (ITU) for facial recognition, video monitoring, city and vehicle surveillance. Today, China’s governmental collection of data is limitless. Human Rights Watch stated that COVID-19 may be used to spark the permanent deployment of facial recognition systems in China. In Moscow, officials are forging ahead with installing one of the world’s biggest surveillance camera systems equipped with facial recognition technology, despite protests from activists (25 March 2020, www.hrw.org). In the US, facial recognition software has come under scrutiny for issues with racial bias and privacy concerns. In early June 2020, IBM announced that it would no longer offer, develop, or research facial recognition technology. Spending on facial recognition technology totalled an estimated US$3.2bn in 2019 worldwide. Forecasts suggest that organisations will invest US$7bn in this biometric technology by 2024. (Source: Forbes, 1 February 2020)

Bio

Steven Van Belleghem is an international keynote speaker, entrepreneur, and best-selling author  who has delivered  more than 1,000 presentations at events across 40+ countries. His core expertise is the future of customer centricity. The combination between customer-centric thinking, the latest technologies, and the human touch is the guiding principle in Steven’s stories.

https://www.stevenvanbelleghem.com/