Going big in Asia: How businesses are leveraging platforms to fuel growth

FROM a supermarket launching a marketplace for small businesses to sell goods, to a financial institution offering a variety of investment funds on a portal for customers to select, businesses are increasingly adopting “platform-like” business models to expand into new markets and accelerate growth.

A platform is a powerful intermediary - it does not necessarily create or sell its own products but rather brings together sellers, buyers and ancillary service providers into a single, diversified and vibrant ecosystem.

Several platform models exist. These include brick-and-mortar stores adding digital platforms, such as retailers launching e-commerce shops; companies evolving into platforms, like Netflix shifting from mailing DVDs to streaming; and companies that started as pure platforms, like digital marketplaces, ‘super apps’ and investment platforms.

It is an efficient way for a business to quickly break into new product or service segments and connect with a much larger audience. Research from McKinsey estimates that emerging digital ecosystems or platforms could mediate more than 30 per cent, or over $60 trillion, of global corporate revenue by 2025.

With these benefits in mind, DBS has launched DBS Platform Services to help companies make the most of platform business models. Sriram Muthukrishnan, group head of Global Transaction Services Product Management at the bank, shares more.

Q. Why is it important for businesses in Asia to adopt platform-like business models?

A: The region has a growing mobile-first, digitally savvy population. Whether it is consumers looking for affordable products with low shipping fees or investors seeking seamless access to financial investments, platforms make it possible to cater to many needs.

The platform economy is all about enabling businesses, no matter their size, to focus on their core strengths while they benefit from the infrastructure and scalability that platforms offer. They can launch products, enter new markets and grow their operations much more quickly. The result? Faster growth, broader reach, and the ability to innovate in ways that just were not possible before.

Q: Can you share how businesses benefit from operating a platform?

A: For retailers, adopting a platform model means they can integrate e-commerce, payments, logistics and more into one smooth experience for customers. This helps them quickly tap new markets, streamline operations, unlock new revenue streams and even get insights from data collected on the platforms.

In the food and beverage (F&B) sector, firms can embed their entire customer experience – from data-driven food recommendations to accumulating loyalty points and tracking deliveries in real-time – within a single digital ecosystem. Think of a family in Jurong East craving their favourite hawker stall’s carrot cake from Toa Payoh. In the past, placing an order meant calling the hawker and coordinating with the deliveryman separately. Now, you can do so on an F&B platform effortlessly and pay digitally.

We see the platform economy emerging across a wide variety of industries beyond traditional e-commerce and social commerce sectors. Across education, healthcare, travel, financial services and more, businesses are adopting platform models to offer seamless, integrated services that meet evolving customer expectations and new business models.

Q: What challenges do companies face when launching a platform?

A: A big hurdle is maintaining a seamless user experience across all participants – customers, merchants, ancillary service providers and others – as the platform grows. Take marketplaces, for example. The sheer volume of transactions happening across multiple currencies, geographies and time zones can be overwhelming.

Settling payments, refunds and reconciliation becomes very complex, especially when platforms are dealing with cross-border transactions. You have to navigate currency conversions, time zones, regulatory requirements and more, which makes timely and accurate payments tricky. Delayed payments frustrate both merchants and customers.

Q: How does DBS Platform Services help to address these challenges?

A: DBS Platform Services was built with the unique needs of platform companies in mind. We know they face a variety of challenges as they scale, so we designed a comprehensive and integrated solution to tackle everything from onboarding to managing complex payments and reconciliation.

For instance, our solutions enable businesses to quickly onboard new merchants and customers, and establish payment and collection channels, in a seamless and more cost-effective manner. We also have tools that streamline the complexity of managing and reconciling payments by making it easier for businesses to identify who is paying, match payments to invoices across large volumes of transactions, and more. On top of that, businesses can break down a single transaction into multiple parts, deducting their fees, and paying vendors and merchants simultaneously.

Whether transactions take place locally or across borders, we offer businesses access to domestic and cross-border payments, and integrate foreign exchange solutions to help manage price volatility. Leveraging our data and reporting capabilities, we help businesses manage regulatory complexity and boost operational efficiency.

All of this is powered by advanced technology that is smart and automated, providing businesses with real-time visibility into their cash flows and reducing the risk of delays or errors in the settlement process.

Q: What about companies that already have their own technology infrastructure or third-party providers that support platform business models?

A: Running an in-house system or juggling multiple technology vendors is complex and resource-intensive, especially as the business starts to scale. Our solution is comprehensive yet modular – established platforms can select services that complement their existing capabilities, while emerging players can implement the full suite to accelerate their platform journey.

Having been named the Safest Bank in Asia for 16 consecutive years, DBS’ resilient franchise, strong credit ratings and sound risk management give businesses the confidence that they can scale securely, knowing they have a trusted partner handling their most critical financial operations.

Q: Can you share some examples of companies that are benefiting from DBS Platform Services?

A: We are seeing a lot of interest from clients and platforms across different industries, including other financial service providers and institutions.

One example is DCS (formerly Diners Club Singapore), a financial institution licensed to issue credit and charge cards whom we have partnered in their business innovation efforts to create an integrated payment experience through D-Vault. Powered by virtual accounts, one of DBS’ foundational banking capabilities made available via Application Programming Interface (API) connections, D-Vault is a new companion account construct that enables DCS’ cardholders to manage their spending limits and card repayments more efficiently.

With DBS Platform Services, we are taking this partnership further through DCS Innov, their new business arm set up to drive new revenue through fintech enablement services. DBS will provide a suite of financial services that will be integrated into their platform – including multi-currency virtual accounts and cross-border payments – to power their fintech clients through API connections. This exemplifies how businesses can tap DBS Platform Services to accelerate their growth into new client segments, scale their value propositions and unlock new revenue streams.

Across the region, in markets such as India and China, we are powering local fintechs and financial institutions serving local businesses and entrepreneurs, making it easier for their clients to receive payments effortlessly while selling internationally.

These examples only scratch the surface of what DBS Platform Services can achieve – it’s not just about solving today’s challenges but also empowering businesses to scale, innovate and reach new markets faster than ever. As we continue to work with a diverse range of clients, we’re constantly pushing the boundaries of what’s possible – turning today’s obstacles into tomorrow’s opportunities for growth.