Neither of the two aforementioned conceptualisations directly address the environment in which the firm operates, its competitive landscape, or strategic positioning. In order to fully grasp how different distinct digitisation initiatives may have impacted the financial industry, lowered the barriers for new entrants, changed customer orientations, and much more. It is imperative to furthermore apply a theoretical lens accounting for such interrelations and industry dynamics, in order to elicit how this may impact the transformation in business model of the traditional bank.
More specifically, the external orientation towards the environment in which a business operates is a necessity to fully understand, identify and create a proper business strategy, as it is recognised that
"stand-alone strategies don't work when your company's success depends on the collective health of the organisations that influence the creation and delivery of your product. Knowing what to do requires understanding the ecosystem and your organisation’s role in it" (Iansiti & Levien 2014, p. 69). Even when looking to lose networks of suppliers, distributors, outsourcing firms, makers of related products or services, technology providers, etc. organisations affect and are affected by, the creation and delivery of a company's own offerings (Iansiti & Levien 2014, p. 69). Best compared to an "individual species in a biological ecosystem, each member of a business ecosystem ultimately shares the fate of the network as a whole, regardless of that member's apparent strength” (Iansiti & Levien 2014).
A firm's "own" ecosystem falls within the traditional value chain of suppliers and distributors, that directly contribute to the creation and delivery of a product or service to the firm (Iansiti & Levien 2014). Hence, a firm's' own business ecosystem "includes, for example, companies to which you outsource business functions, institutions that provide you with financing, firms that provide the technology needed to carry on your business, and makers of complementary products that are used in conjunction with your own" (Iansiti & Levien 2014, p. 69). It further includes the customers when receiving feedback on delivered products and services, the direct competitors, regulatory entities and media outlets (Iansiti & Levien 2014). As an ecosystem is close to never-ending, it is necessary to
"subdivide a complex ecosystem into a number of related groups of organisations, or business domains", in which each ecosystem typically encompasses several domains, which it may share with other ecosystems (Iansiti & Levien 2014). For this reason, this thesis will look only to the direct ecosystem of the traditional bank, by emphasizing the business model for "traditional" products and services being delivered by a traditional bank now and in the near future.
In this regard, two measurements are of significant importance, when looking at the environment and the role of the traditional bank and its business model for future survival. Specifically, these are respectively productivity and robustness. Where the former regards a "network's ability to consistently transform technology and other raw materials of innovation into lower costs and new products", the latter encompasses the "benefits to the species that depend on it, a biological ecosystem must persist in the face of environmental changes" (Iansiti & Levien 2014, p. 72), and this ensures a business ecosystem to be capable of surviving disruptions such as unforeseen technological change. A company that is part of a robust ecosystem enjoys relative predictability, and the relationships among members of the ecosystem are buffered against external shocks (Iansiti & Levien 2014, p. 72). This lens will, in addition, be applied to analyse the role of the traditional bank in its current, and potential future, ecosystem, whether that being of a keystone player or secondary support function (Iansiti & Levien 2014). When participating in an ecosystem one can take on a multitude of roles depending on which part of the value
chain one wants to profit on. In the below section, the three main roles one can take when working within an ecosystem will be outlined.
The keystone organisation of the ecosystem is a crucial role as they are most commonly the creators of the ecosystem, and therefore the goal of the keystone is to "improve the overall health of their ecosystem by providing a stable and predictable set of common assets" (Iansiti & Levien 2014). The keystone is the entity that creates a foundation in the ecosystem that others can work off. Taking Apple as an example, they created the iPhone and the App Store as a foundation for developers to use in order to build apps for the iPhone and distribute them through the App Store. In this way, the keystone can increase productivity by connecting potential actors in the ecosystem, and in the case of Apple, connecting developers and customers through a shared platform. They can increase the robustness of the ecosystem by constantly developing the platform with innovative technologies (Iansiti & Levien 2014). Furthermore, the importance of the keystone is usually so high that should the keystone be removed, it would lead to a near total collapse of the ecosystem, as other actors would struggle to continue operations without the foundation in place (Iansiti & Levien 2014), and as a by-product of this, it is in the keystones own best interest to see the ecosystem prosper.
Furthermore, one can choose to pursue the dominator role. The keystone exercises its power in a fairly indirect way, whereas the dominator wields its power in a direct manner, to better position itself within the ecosystem to exploit it (Iansiti & Levien 2014). The dominator seeks to integrate vertically or horizontally within the ecosystem to take over and manage a large proportion of the ecosystem directly.
Should the dominator take over the ecosystem more or less completely, very little of the ecosystem will remain. However, as the dominator has taken over operations within the ecosystem, itself will be made responsible for the value creation (Iansiti & Levien 2014). This makes the above a destructive behaviour seen from the perspective of the ecosystem, however, it is a viable strategy if an actor seeks to take over operations in order to increase efficiency and potential value derived from these operations. Two types of dominators exist. The above mentioned refers to the physical dominator. The value dominator, on the other hand, exercises little power over the ecosystem. Instead, the value dominator seeks to extract as much value from the ecosystem as possible (in contrast to sharing it within the ecosystem), which in the end will leave the ecosystem unsustainable and bring it down alongside the value dominator (Iansiti
& Levien 2014).
The third role an ecosystem actor can take is the niche role. The niche role is the most commonly used within the ecosystem, as the niche players goal is to develop "specialised capabilities that differentiate it from other companies in the network" (Iansiti & Levien, 2014). The ecosystem allows the niche player to focus their energy on their core product/ service and enhancing the value of it by leveraging the capabilities provided by the ecosystem and/ or keystone. When allowed to operate, niche players make
up the majority of the ecosystem and is creating the vast majority of the value created within the ecosystem. They thrive by leveraging the capabilities that have been established by the keystone, or in the shadow of a dominator that operates to exploit or replace the nice player (Iansiti & Levien, 2014).
Due to the nature of which the niche player operates under ie. the capabilities provided by others, the niche player needs to carefully analyse the ecosystem before entering it. They need to asses to which extend they are going to rely on different actors in the ecosystem, in order to understand how much of their business will be relying on the capabilities owned by others, and how actors can exercise power over this relationship. Relying too much on capabilities supplied by a dominator can prove unfortunate in the long run, as the dominator might attempt to displace the niche player. Niche players, however, can counter this by introducing capabilities within the ecosystem that can lose up the coupling between the actors, retaining the ecosystem value, but decreasing the interdependence and thereby reducing the power of potential dominators (Iansiti & Levien, 2014).