There is no perfect solution to counter the new and demanding digital producers. The financial sector is discovering that they can join forces with emerging technologies to strengthen weaknesses along their value chains. The fashion market is copying or purchasing digital offers from newcomers. The key to staying behind in the digital landscape is to improve the company’s visibility.

Why do banks welcome disruptors?

As digital competition intensifies between financial institutions, banks discover that start-ups that once considered threats can be valuable strategic and operational allies.

Many are moving rapidly to expand collaboration with financial technology companies rather than developing in-house solutions, gaining access to innovative technologies and business models that are more efficient and offer customers greater comfort.

Other benefits that come with these partnerships include new customers, lower costs and, perhaps most importantly, exposure to an innovative culture that could help banks reinvent themselves.

According to Mckinsey’s latest research approximately four out of five major banks by assets (and other digitally advanced banks) have partnered with at least one financial technology company, an increase of 55% from only two years.

On average, each bank has forged four of these alliances. They range from basic transactions between buyers and suppliers to complex and exclusive partnerships.

On the other hand, banks are also stepping up their business acceleration programs. These programs generally involve them in providing early-stage financial businesswith experience in administration, financing, and office space, often as a prelude to deeper collaboration.

Formal partnerships cover a spectrum of activities related to monetary transactions, including real-time payments and cross-border blockchain-based transactions, with particularly fertile ground covering 37% june all associations.

The 18% of these partnerships correspond to operations, activities such as anti-money laundering technology and identification methods based on on video. In terms of lending, financial technology companies target new customer references, while their more robust digital platforms range from customer interfaces to loan processing, and that can help sharpen bank offers.

Other collaborations may include creating highly customized financial management applications, fraud detection systems based on advanced analytics expertise, or better customer service automation.

There are now some more complicated aspects to cover such as misalignment of incentives and capacity gaps in banks’ own arsenals. In addition, banks must also improve their execution game and speed up decisions to prevent fintechs from rejecting frustration after an initial period of collaboration.

However, as banks strive to stay ahead of their most digitized peers, and ahead of the large digital natives that are entering banking markets, the association’s outlook is expected to be only strategically more important.

Association or war against digital natives?

The OEM market also faces a lot of challenges as the machinery industry reaches a technological tipping point.

Online channels for after-sales are becoming more relevant, putting pressure on traditional distributor channels. At the same time that high-tech companies are becoming strong competitors in this space, as they are seen by customers as reliable suppliers, which increases the importance of OEMs.

Manufacturers see more favorable predictive maintenance and remote monitoring, connectivity to project management software, digital sales in the aftermarket, and operator guidance systems.

In the case of farmers, GPS self-addressing topped the list of compelling uses for new technologies. Professionals in this sector are also interested in the variable application of inputs, such as determining the right combination of seeds, water, fertilizers and other soil improvements, as well as predictive maintenance.

Currently many private organizations and companies (e.g. IRSTEA and MOSANTO) around the world are actively researching new technologies for agriculture. These are companies spanning different industries and economic sectors, ranging from finance, engineering, food retailers, to industry associations and groups of small agricultural suppliers.

Due to the diversity and heterogeneity of stakeholders, it is important to facilitate dialogue scan and cooperation in the process of developing standards for smart agriculture and to improve interoperability between different systems and Technologies.

However, customers are also increasingly demanding: they value data privacy, data access, and connectivity between their computers. To successfully address industry disruptions, OEMs need to better understand their customers’ decision journeys and changing preferences. OEMs should remain vigilant to fund these new offerings through productivity improvements. And they should start thinking about the future by strengthening their position in emerging technology ecosystems, improving their talent base and renewing R&D processes.

Many OEMs in the manufacturing, construction and agriculture sectors in the United States should be able to generate value from these new technologies, increasing their current profits four to six times.

The new currents arrive by stepping hard

On the other hand, digital marketing and social media have affected the fashion and beauty industry, valued at $250 billion, more severely than most other consumer goods sectors.

“Digital Native” brands, such as eyebrow specialist Anastasia Beverly Hills and makeup producer NYX, have used “socialmedia”tools to capture the attention of their customers engaged and concerned about beauty.

This new generation has already taken up 10% in the cosmetics market and is growing four times faster than more traditional companies.

The Native digital companies recognize that younger consumers engage with products differently than older consumers do. The use of different channels, such as online videos and influential marketing through social networks to build followers, has been critical to their success.

Charlotte Tilbury, for example, has ten times as many YouTube subscribers, many of them looking for advice on applying makeup, than a more traditional brand. Through these channels, the most digital companies have created a form of marketing that is more than transactional. Rather, it’s about building a relationship with consumers and making them feel part of a brand-centric community.

This has not gone unnoticed, established companies are improving their digital gaming, often with excellent results. One way for this is to leverage partnerships, in 2016, traditional companies made 52 acquisitions, many of them new. Estée Lauder, for example, bought BECCA Cosmetics, Too Faced (cosmetics) and a minority stake in Deciem (skin care).

Another approach is imitation. Large beauty companies are making significant investments in digital media and influential marketing, l’Oréal alone has hired 1,600 digital experts.

And a third path is incubation, in the form of corporate venture capital funds, like LVMH’s Kendo, which has recently been successful with Rihanna’s Fenty Beauty.

More established beauty companies have shown that they can and must adapt to defend their position. It’s a lesson that other consumer goods companies would do well to imitate.

Is there failure?

So far there has been talk only of successful partnerships between traditional companies and more digitized companies. However, these strategies for digitizing some of the tasks are not always successful.

Most digital strategies don’t reflect the way digital is changing economic fundamentals, industry dynamics, or what it means to compete. Therefore, companies should be careful with five pitfalls:

  • Diffuse definitions:

When business leaders talk about what they mean when they use the term “digital,” some see it as the updated term for what their IT role does. Others focus on digital marketing or sales. However, very few have a broad and holistic view of what digital really means.

The digital concept is considered the almost instant, free and impeccable ability to connect people, devices and physical objects anywhere. By 2025, some 20 billion devices will be connected globally, nearly three times as many as the world’s population.

In the last two years, these devices have produced 90 of the data. Mining this data greatly improves the power of analytics, leading directly to dramatically higher levels of automation, both process and ultimately decisions.

Lacking a clear definition of digital, companies struggle to connect the digital strategy to their business, leaving them adrift in the choppy waters of adoption and digital change, so, it is important to evaluate the option of partnering with a company that if it knows how to define this digital strategy and which has extensive experience in the sector.

  • Misinterpretation of the digital economy:

Digitization is confusing the best plotted plans to capture the surplus by creating, on average, more value for customers than for businesses. This is important yet terrifying news for companies and industries that hope to turn digital forces into an economic advantage.

There are countless examples in which these dynamics have already developed. In the travel industry, everything changed with the Internet, and now consumers get the same free services they once received from travel agents.

As alarming as the shift in profits to customers is the fact that when the effects of scale and network dominate markets, economic value rises to the top. It is no longer distributed among the usual number of participants. This means that a company whose strategic goal is to maintain participation in relation to its peers could be doomed, unless the company is already a market leader.

  • Understanding new ecosystems:

Understanding the new economic rules will move the company forward. Traditional approaches, such as closely following opponents’ movements and using that knowledge to adjust overall direction or optimize value chains, are becoming more dangerous.

An emerging set of digital ecosystems could account for more than $60 trillion in revenue by 2025, or more than 30 of global corporate revenue. In a world of ecosystems, as the boundaries of industry blur, the strategy needs a much broader frame of reference.

CEOs need a wider lens when evaluating potential competitors or partners. In fact, in an ecosystem environment, today’s competitor can become a partner or an “enemy.” If it is not understood, it means that it will lose opportunities and minimize threats.

  • Overindexing on ‘usual suspects’:

It is justified that most companies worry about the threats posed by digital natives, whose movements receive the most attention, and the disruptive nature of their innovative business models.

However, an overfocus on the usual suspects is dangerous, because not only are new companies at that point, but “holders” companies are also digitizing and stirring competitive dynamics. And the consumer orientation of many digital leaders makes it easy to overlook the growing importance of digital in enterprise-to-business (B2B) markets.

  • Loss of digital duality:

The most common response to digital threats is this: “If I’m going to be interrupted, then I need to create something completely new.” Understandably, that will become the impetus for the strategy. However for most companies, the pace of disruption is uneven, and they cannot get away from existing businesses. They need to digitize their current businesses and innovate new models.

Beyond that, companies face another set of options. As noted, the competitive cost of moving too slowly places a high priority on establishing an aggressive digital agenda. But senior leaders are most concerned about their ability to execute their strategy, amid a tangle of cross-cultural currents.

So they struggle on where to place their energies: bet to change the game or redo the place. The fact is that strategy and implementation can no longer be addressed separately or compartmentalized. The pressures of digital mean that you must adapt simultaneously and iteratively to succeed.


As digital disruption accelerates, we often hear a sense of urgency among executives, but it rarely reaches the level of specificity needed to address the disconnections described in the five difficulties mentioned above.

Leaders are much more likely to describe initiatives such as: “bring our business to the cloud” or “take advantage of the Internet of Things, “which must confront the new realities of digital competition, rather than: “I need to develop a strategy to become number one, and I need to get there very quickly by offering tremendous value to customers, redefining my role in an ecosystem and offering new business value propositions while driving an improvement significant in my existing business.”

Such recognition of the challenge is a first step for leaders. The next step is to develop a digital strategy that responds correctly, whether digitization is started from scratch internally or through partnerships with technology companies.