COVER STORY 11 How China Merchant Bank across a great number of industries and have advanced in Incumbents need to decide what is in it for them and be a lot of different countries. Their analysis shows that 90% clear about whether it makes sense to partner with super of ecosystems involve participants from more than five apps like Grab or start their own platform. “Ask yourself Is Leveraging The Platform countries, and 77% of ecosystems span developed and what value do you think you can add? Where do we play? emerging markets. The orchestrator of a winning ecosys- What is the role we want to undertake? Who do we tem must successfully manage dozens of partners, across want to combine with? Is it likely that our organization is Economy multiple industries and countries, and different types of decentralized enough to take the right decision?” advises relationships, says Jacobides. Jacobides. “Delegation of authority is an important issue. What is the organizational structure that will allow – not as Grab is doing just that. It has partnered with Toyota, Hyun- a PR exercise – real value to be added? The challenge is to Financial services expert Chris Skinner scoured via its mobile banking service, which the bank says dai, Booking Holdings, Microsoft, Mastercard and national develop a strategy, understand what the key questions are the world to find the most innovative banks while helps it to accumulate a lot of customer behavior champions and industry leaders such as Singtel, Thailand’s and build in the right way for the organization.” researching his new book, Doing Digital, which is data, according to Skinner’s book. In the book Central Group and Malaysia’s Maybank, and the Philip- scheduled to be published in February. He settled CMB says it set up more than 3,000 customer pines’ SM Group. Some, like Toyota, opted to invest. The J.L.S. on five. China Merchants Bank (CMB) was among categories and over 220 personalized recommen- Japanese automaker bought a $1 billion stake in Grab in them. dation models by integrating customer account June 2018. Grab says each partnership has its own unique transactions and customer information. Every day benefits. “The interest of our partners demonstrates the CMB started as a technology-led bank in the it provides customers with more than 200 million great opportunity they see in Southeast Asia, as well as 1980s, was one of the first to offer Internet banking personalized advertisements via mobile banking, Grab’s ability to capture it,” says a company spokesperson. in China and describes itself today as a “fintech with a response rate of 1.04 %, equivalent to crea- bank”. It has more recently created a tech-led ting two million sales opportunities for the bank. The super app’s ability to forge such partnerships allows it digital ecosystem that customers can use to do While most banks are still lagging behind when it to scale at speed and bring a broader set of services and everything from getting typhoon alerts to making comes to adopting new business models an even better user experience to its platform, strengthe- a dentist appointment, a move that is benefiting its “China Merchants Bank has been smarter and a ning its network effect. financial services products and its bottom line. lot more focused, concentrating on offering the In “Doing Digital” Skinner recounts how CMB got best banking service through digital technology where it is today. The bank has 1,830 branches and and data mining and creating a digital ecosystem over 136 million retail customers. As far back as that serve the needs of its customer base,” says 1993, it realized that it had too few physical outlets Professor Ben Shenglin, Dean of Zhejiang Univer- to compete with large state-owned banks. So, sity International Business School and Academy of it decided to develop e-banking to expand its Internet Finance, China. business. CMB, in the early stage of development, selected technology as its differentiated competi- J.L.S. tiveness, and it was the pioneer in issuing debit cards in China. Then, in 1996, it completed the re- tail e-banking service system of online banking and telephone centers. It launched its ‘Mobile Priority’ service in 2015 so as to transfer all kinds of banking services to its apps. Today, the number of monthly active users of CMB apps has exceeded 81 million, the book says. More than 70% of its wealth management product sales and over 50 % of consumer finance activities are conducted through CMB’s apps. The apps can also be used for taking the subway and bus, ordering food, booking movie tickets and using government services. Some 26% of traffic of the CMB app ser- ving debit card customers and 46% of the flow of the CMB Life App for credit card customers come from these non-financial service offerings. CMB Customers can view about 1.6 billion pages