The DLA Piper Digital Ring event with 180+ attendees was a massive event on digital transformation and here are my to 5 takeaways.
As anticipated, my law firm, DLA Piper, ran a very interesting event together with the Corriere della Sera, the largest Italian newspaper, at the Italian stock exchange, Borsa Italiana, on digital transformation in the banking, insurance, hospitality and e-commerce sectors. I summarise below my main takeaways, but there is definitely no room to cover all the interesting insights arose during the discussion.
1. Digital transformation leads to new competitors to fight or partner with?
An interesting point raised by Ugo Cotroneo of Boston Consulting Group is that the digital revolution in the Fintech space led to different strategies from banks which either chose
- Fintegration – Banks use Fintech’s tech and offer its product through their own platform; or
- Referrals – Customer is referred by bank to Fintech and viceversa based on its profile/needs; or
- Platform integration – Banks offer a Fintech platform and product, fully integrated into their own platform.
Banks and Fintechs have very different approaches, but they will be forced to work together, also because of regulatory changes such as the PSD2 that push towards integration.
2. Fintech is a thread or an incentive for banks?
The first digital ring had on the one hand the largest Italian bank, Intesa Sanpaolo, and on the other hand, two up and running new entrants in the market, Moneyfarm and Alipay. But the surprising result of the discussion was that the “dinasours“, as the incumbents have been defined during the debate, have been moving (and moving fast) to react to the entrance of new players, and even partner with them to provide services in order to support their business.
This is leading to a reshuffling of the market, but at the same time it is pushing banks to change their model of business. And this might happen with for instance the so called “Bank of Things” that I covered in this article where banks will finally exploit the large quantity of data that they collect. But these new models of business lead to also new legal risks in markets that are not very familiar for them.
3. Data is a treasure, but how can you exploit them right?
I moderated a panel where we had the largest Italian insurance company, Generali, represented by their newborne Generali Jeniot, their newco dedicated to Internet of Things services, Octo Telematics which is the largest provider of telematic services in the world and Microsoft that does not need introductions.
Everyone agreed that data is a resource for
- customers that can benefit from new value added services as well as
- companies that can become more efficient, but at the same time can launch new lines of business through a “data monetization” strategy.
But companies need to understand that they have to change their model of business to become successful.
Every company is a software company
is a famous sentence from Satya Nadella, Microsoft’s CEO. But, as I mentioned in one of my recent articles, it is also important to stress that
You cannot do I(o)T alone
Partneships will be essential for the digital transformation and to become successful and you cannot be successful if for instance you don’t consider new legal issues around proper processing of personal data or data ownership.
4. New entrants are also new opportunities?
The digital ring where we expected the most intense debate was between Starhotels, the largest Italian hotel chain, opposed to Booking.com and Airbnb. But, after a few minutes, we discovered that traditional hotels see digital companies as an opportunity for them to foster unexploited resources, through new services that can be offered to their guests.
This collaboration requires though also a set of rules that is more clear so that each party can compete (and partner) in the same playfield.
5. The Internet and social media are setting new rules that are unpredictable and difficult to foresee
The last panel had representatives from different industries. We had managers from the multichannel distribution industry such as QVC and Giglio group, together with Confindustria Moda, the Italian association of fashion companies, and Certilogo that supports fashion companies in identified counterfeited goods.
During the discussion, we found out how influencers can lead to an increase of the stock market value of a company of even 30% and such influencers are sometimes digital avatar created by a software company. At the same time, digital transformation can lead to a level of customization of products and services that might make a major difference in the near future. But for both innovations there are legal risks to be covered with new rules on influencers and the GDPR and the ePrivacy regulation in the profiling of customers.
We will run a series of Digital Ring events in the coming months, so stay tuned and follow us!