Over the past two decades, digital platforms have redrawn the competitive landscape in many industries. Hotels now compete for visibility on Booking.com, restaurant reviews on Tripadvisor are as important as Michelin Guide critics, and retailers watch Amazon absorb their customers.
In each case, a platform has put itself between incumbent firms and their customers, capturing data and reshaping the competitive rules in the process. For many incumbents, the instinct has been to resist or imitate.
But our research on industries facing digital disruption, particularly in financial services, suggests both responses tend to fail. The companies that have thrived are those which pursued a “best of both worlds” strategy: integrating the customer experience innovations brought by new platforms while also reinforcing their core offer to customers.
These lessons from the first wave of digital disruption will be crucial as businesses face the next: AI systems that threaten to once again upend well-established business models and leave companies struggling to respond.
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The emergence of platforms fundamentally changed the way markets work. Three shifts matter most. The first is hyper-customisation through data. Platforms collect behavioural data and tailor what each customer sees. A record label used to compete on artist reputation and marketing budgets. On Spotify, what matters most is whether the algorithm surfaces a track in a listener’s feed.
The second shift is bundling products into packages that cross industry boundaries: platforms mix and match complementary offerings based on a user’s potential needs. A customer booking a holiday is offered flights, accommodation, car hire, restaurants and insurance — all of which are products from separate markets.
Finally, as platforms feed behaviour back into their algorithms, popular offerings become more visible, attracting more customers, and generating more data. This winner-takes-all effect has strong consequences: early performers build advantages, and latecomers struggle to break through.
The first instinct of most incumbents was to fight against the threat of disruption. Taxi companies took Uber to court, hotel chains dismissed Airbnb, and European banks lobbied against Open Banking regulations that exposed them to competition.
The most successful response is to see platformisation as an opportunity for reinvention. The key move is a shift from a product-centric strategy to one based on experiences: from selling isolated products to orchestrating integrated offerings across multiple customer needs.
DBS Bank in Singapore is a good example. Rather than waiting for tech platforms to disintermediate its lending business, the bank built its own marketplaces for cars, property, travel, and electricity, with more than 400 partners. Its car marketplace, for example, lets customers search for vehicles, compare insurance and arrange financing in one digital interface. DBS Bank is no longer just a provider of loans, but has put itself at the centre of an end-to-end journey.
This implies redesigning the customer journey from the outside in, starting with “what is the customer trying to accomplish?” rather than “how do we sell more products?” A mortgage is not the goal, but buying a home is. A bank that bundles property search, legal services, insurance, and moving logistics around its financing becomes an orchestrator rather than a commodity provider. It captures data across the entire decision process, deepens the relationship with the customer, and becomes far harder to disintermediate.
This shift must be handled with care. Incumbents who have tried to replicate what Amazon or Google do have largely failed. Tech groups have spent decades building data capabilities no incumbent can match overnight.
Consider Industrial and Commercial Bank of China, the world’s largest bank by assets, which launched ICBC Mall, an ecommerce marketplace selling furniture, electronics, and food, and aiming to become the Amazon of banking. Despite its large customer base, the platform never gained traction. Hundreds of millions of banking customers do not translate into ecommerce data capabilities, logistics expertise, or the trust that might make people want to buy a handbag from their bank.
This points to a paradox. In the most regulated industries, while innovation is expected by customers, trust is built on legacy. Customers trust their bank because it handles their money reliably. That credibility is crucial, but fragile. Diversifying too far and too fast risks eroding the trust that differentiates incumbents from tech groups and start-ups.
The implication is not to avoid diversification, but to ensure that complementary services meet a high standard of quality and coherence. When a bundle feels coherent, the whole is worth more than its parts. When it feels arbitrary, customers downgrade everything in it, including the core product.
These dynamics are accelerating with AI, which enables finer customisation, more creative bundling and stronger cross-sector integration.
Incumbent firms that have not begun rethinking their role risk becoming invisible to their own customers, as the infrastructure connecting supply to demand is redesigned around them. Companies that thrive will absorb what platforms do best and reshape it around what they cannot easily replicate: expertise, trust, and enduring customer relationships.
The author is an assistant professor of strategy at Skema Business School in Paris
