Imagine this: you wake up to find your virtual assistant has already scanned your real-time state of health, your diary for the day ahead and the contents of your fridge, and has designed a personalised meal plan that fits your schedule, budget and the advice of your personal trainer and doctor.

As you leave the gym on your way to your first meeting of the day, you are alerted to a place nearby that's in your health and wellbeing loyalty programme. You swing by to pick up the perfect, personalised post-gym drink and snack box to sharpen you up. You swipe your smartphone for payment, of course.

Imagine if this ecosystem of personalised lifestyle, health and wellbeing services was brought to you by your insurance company. Or your utility provider. Or smartphone.

EY is working with several global leaders across different sectors, to build the technology, business models and alliances to bring these scenarios to life.


This is the world of convergence. New ecosystems, often involving players from widely different industries and sectors, are combining to form new businesses.

As the barriers between previously disconnected industries are blurring or broken down, customers are being offered a seamless, one-stop-shop experience.

So sports brands no longer sell just trainers or yoga mats — they also sell apps and wearables to help us make sense of our fitness data. And in the auto sector, car manufacturers are moving into power and utilities, energy generation and storage, and lifestyle transport solutions.

Digital trigger

Convergence across sectors is fundamentally changing the marketplace. Some believe it could be the most disruptive force impacting business since the Industrial Revolution.

Digitisation has been the trigger, particularly new business models, cheaper and more flexible technology, and connected customers keen to adopt new forms of engagement.

Alongside smartphones, other examples include connected cars, smart boxes at home (like Amazon Alexa) and smart medical devices like pill bottles and inhalers.

It's about blending one industry with others and blending human activities with machine activities. Industries as diverse as automotive, manufacturing, insurance, payments, energy, media, hospitality, telecommunications, technology, health and wellbeing, and consumer goods companies are coming together to rewrite the future.

Another example: Air New Zealand doesn't just fly planes. It's in the lifestyle and experience industry and offers customers insurance, rental car and hotel deals, valet parking, a loyalty system and access to its online partnership store.

In the same way, Royal Caribbean isn't just a cruise company. It's also in the experience industry.

By the time passengers board their vessel they're pre-loaded with a raft of value-adding services provided by Royal Caribbean and its partners. And a digital record of the experience is captured in album form and presented to passengers at the end of their cruise.

For all this to happen, far more players than the cruise company have become involved. It acts as a curator for the ecosystem of partner organisations that are providing the add-on experiences so when the customer visits Royal Caribbean's website, there are links to its partner businesses.

Telcos, meanwhile, have evolved into entertainment and information service providers.
At the same time, the social media giants are moving in to transform global payment systems.

For example, the trend towards point of sale (POS) lending began in 2008 when PayPal's then-parent, eBay, acquired Bill Me Later (renamed PayPal Credit ).

Today, seamless POS lending options are often embedded in online shopping sites. As consumers browse, products are quoted both at their regular price and at a financed, monthly rate.

Consumer-driven interconnection

Rob Webb, EY New Zealand's Digital Lead and Global Insurance & Convergence Lead, says customer expectations and experience is the driver behind all this activity, along with the increasing ability of corporates to build platforms and business models capable of delivering the seamless service consumers demand.

"At the consumer end, we increasingly expect our lives and our worlds to be interconnected in a way that makes life convenient and value-adding," Webb says.

The hottest new trend is around hybrid consumer experiences that cleverly combine the best mobile (digital) and real world (physical) experiences to deliver the ultimate customer outcome. NZ has a long way to go here.

"Behind the scenes, the most progressive corporates are eyeing each other up and saying things like, 'we're an airline so we need a hotel group, we need an insurer, we need a restaurant provider, we need a loyalty card provider, a wine company' and are setting all these things in play."

In the same vein, EY has partnered with Microsoft and software security company Guardtime to launch Insurwave, the first blockchain platform for the insurance industry.

The client is Maersk, the world's biggest shipping company. The deal means cargo movements can be traced by all players and in real time.

"If one of those containers were to fall off a ship, it would typically take up to two years to sort everything out," Webb says. "With blockchain, it takes five minutes." More than 1000 ships are expected to use the platform in the next year.

Healthcare challenge

Another big sector ripe for convergence is healthcare and wellbeing. The large number of disparate parts makes it challenging, but insurers, interested in the health and wellbeing of their corporate clients, are taking the lead, with the initial platforms built.

Consumers, too, are looking for a more connected healthcare and lifestyle experience; two-thirds of all new app-store products are related to health and wellness — an "arms race of apps," as Webb puts it.

But a big outstanding issue is the lack of an integrated and secure way for those in the healthcare system to share patient data in real time.

In worst-case scenarios, their records are still being faxed between locations. One solution is for patients to reclaim their personal data — as happens in Estonia — with access either in the cloud or on their personal devices.

As Webb points out: "We can make life-impacting banking decisions on our mobile phones but personal health data is, in the minds of some people, in a category above financial information in terms of sensitivity. There is no technical reason why we can't have it via our phones and be able to access it no matter where we are in the world."

One of the best examples of convergence at work is WeChat — the powerful Chinese super-app that is effectively Facebook, Google, Twitter, Whatsapp, Amazon, Skype, Tinder and Instagram all rolled into one.

Users can perform most of their daily functions — from scheduling an oil change, to making hospital appointments, to notarising documents, to arranging a date or organising a bath for their dog — without leaving the app.

As The New York Times notes, China is changing the internet and some of WeChat's features are "so amazing" that western entrepreneurs are trying to copy them.

Entrepreneurs in front

So where do entrepreneurs sit in all this? Creativity and innovation are at the heart of convergence, along with an appetite to try new things. EY's recently-released Growth Barometer reveals more than one in five (22 per cent) of the high-growth entrepreneurs surveyed has adopted AI compared with 5 per cent of other companies.

They're also more likely than their peers to build alliances with external partners and make it a priority to look ahead.

So where's the next big convergence likely to come from? Not so much from start-ups, Webb says. They might bring some useful new tech but lack the scale for fast impact.

Convergence is the big guys' territory so we're looking at major players in traditional industries like healthcare, life insurance, banking and payments, or travel and leisure, plus alliances with the smartest start-ups in some scenarios.

But equally, he says, an unexpected new entrant could come from anywhere. "We see the tech players, particularly the big ones, increasingly aware they've got the power of platforms and can build these back-end platforms and apps very quickly. They're increasingly keen to explore new uses and new applications.

"We could also see some insiders coming into the sector — mainly the well-funded, impatient, opportunistic tech insider, with a war chest and capability, who wants to get into a traditional sector where it has traditionally been blocked."

- This story is sponsered by EY.