Brief Definition and Origin
Serviceable Obtainable Market (SOM) is a measure of the portion of the Serviceable Available Market (SAM) that a company can realistically capture or serve. Originating from market analysis and business planning, SOM helps businesses focus on practical targets within the broader market, considering current capabilities and competitive landscape.
Current Usage and Importance
In the global banking and financial services industry, SOM is crucial for pinpointing the achievable market segment amidst a vast array of services like payments, card schemes, money transfers, compliance and AML measures, trade finance, and cryptocurrency ventures. It helps financial institutions and fintech companies to tailor their strategies, products, and services to the segments where they have the strongest competitive advantage and the highest likelihood of success.
Stakeholders and Implementation
Main stakeholders engaging with SOM include fintech startups, traditional banks, payment service providers, cryptocurrency platforms, and regulatory bodies focusing on compliance and AML efforts. Implementation involves rigorous market research, competitive analysis, and continuous adaptation to emerging financial technologies and market trends. Challenges may include accurately predicting market shifts and overcoming entrenched competition.
Advantages vs. Disadvantages
Advantages:
- Provides a focused, realistic target for businesses.
- Helps allocate resources more efficiently.
- Facilitates strategic planning and market penetration efforts.
Disadvantages:
- May underestimate market potential due to overly conservative assumptions.
- Risks ignoring broader market shifts or opportunities outside the defined SOM.
Future Outlook
The future of SOM in the financial services sector is shaped by digital transformation, regulatory changes, and the evolution of global trade and payment ecosystems. There’s a growing emphasis on leveraging data analytics, AI, and blockchain to better define and capture SOM in innovative financial services and products.
Further Reading
For more in-depth insights into Serviceable Obtainable Market and its application in the financial sector, the McKinsey & Company website is a valuable resource. It offers reports and analyses that delve into market strategies, fintech innovations, and financial services trends globally.
This overview offers a streamlined guide to understanding Serviceable Obtainable Market (SOM) in the context of the ever-evolving global finance industry, highlighting its importance for strategic business planning and market competition.
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This page was last updated on March 22, 2024.
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