FinTechs – A Way to Renovate the Financial Service Industry? A Study of Strategic Cooperation Methods and Motives between Traditional Banks and FinTechs
(2022) MGTN59 20221Department of Business Administration
- Abstract
- FinTechs - new technological developments devised to ameliorate the delivery and usage of financial services - are disrupting the financial services industry. The business model of traditional banks thus confronts the challenge of adapting to the dynamic circumstances and digital transformation shaped by new market entrants and higher customer expectations. However, the persistence of traditional banks indicates that FinTechs do not possess the skills and resources to penetrate the entire financial services industry. As a result of these deficiencies, organizations within the financial services industry are
increasingly forming strategic cooperations. Therefore, this master thesis develops a theoretical framework based on related... (More) - FinTechs - new technological developments devised to ameliorate the delivery and usage of financial services - are disrupting the financial services industry. The business model of traditional banks thus confronts the challenge of adapting to the dynamic circumstances and digital transformation shaped by new market entrants and higher customer expectations. However, the persistence of traditional banks indicates that FinTechs do not possess the skills and resources to penetrate the entire financial services industry. As a result of these deficiencies, organizations within the financial services industry are
increasingly forming strategic cooperations. Therefore, this master thesis develops a theoretical framework based on related components of strategic management to assess how competitive advantage can be achieved through strategic cooperation and resource allocation. These components include market/industry, offering, activities and organization, suppliers, and resources. A qualitative study comprising twelve expert interviews confirms the positive effects of strategic cooperation, its motives, and methods in the financial services industry. According to the study, FinTechs can benefit from the capital, advanced industry knowledge, and customer data of traditional banks. In contrast, traditional banks can acquire innovations to cope with competition and access new technologies. The study further outlines various methods of cooperation between traditional banks and FinTechs, such as venture
capital, mergers and acquisitions, and licensing. According to the study, these different methods are selected based on the specific circumstances of the cooperation partners. As the culture of the cooperating organizations differs, they prefer autonomously structured cooperation to take advantage of FinTech's entrepreneurial environment and ensure efficient allocation of resources. By utilizing cooperation methods, complementary resources of traditional banks and FinTech can be tapped into to create synergies that establish competitive advantages in dynamic environments. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9094635
- author
- Yildirim, Esra Sultan LU and Strauss, Paula Marie LU
- supervisor
- organization
- course
- MGTN59 20221
- year
- 2022
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Competitive Advantage, Digitalization, Financial Services Industry, Growth Strategies, Innovation, Resource Allocation, Strategic Management
- language
- English
- id
- 9094635
- date added to LUP
- 2022-06-30 10:59:31
- date last changed
- 2022-06-30 10:59:31
@misc{9094635,
abstract = {{FinTechs - new technological developments devised to ameliorate the delivery and usage of financial services - are disrupting the financial services industry. The business model of traditional banks thus confronts the challenge of adapting to the dynamic circumstances and digital transformation shaped by new market entrants and higher customer expectations. However, the persistence of traditional banks indicates that FinTechs do not possess the skills and resources to penetrate the entire financial services industry. As a result of these deficiencies, organizations within the financial services industry are
increasingly forming strategic cooperations. Therefore, this master thesis develops a theoretical framework based on related components of strategic management to assess how competitive advantage can be achieved through strategic cooperation and resource allocation. These components include market/industry, offering, activities and organization, suppliers, and resources. A qualitative study comprising twelve expert interviews confirms the positive effects of strategic cooperation, its motives, and methods in the financial services industry. According to the study, FinTechs can benefit from the capital, advanced industry knowledge, and customer data of traditional banks. In contrast, traditional banks can acquire innovations to cope with competition and access new technologies. The study further outlines various methods of cooperation between traditional banks and FinTechs, such as venture
capital, mergers and acquisitions, and licensing. According to the study, these different methods are selected based on the specific circumstances of the cooperation partners. As the culture of the cooperating organizations differs, they prefer autonomously structured cooperation to take advantage of FinTech's entrepreneurial environment and ensure efficient allocation of resources. By utilizing cooperation methods, complementary resources of traditional banks and FinTech can be tapped into to create synergies that establish competitive advantages in dynamic environments.}},
author = {{Yildirim, Esra Sultan and Strauss, Paula Marie}},
language = {{eng}},
note = {{Student Paper}},
title = {{FinTechs – A Way to Renovate the Financial Service Industry? A Study of Strategic Cooperation Methods and Motives between Traditional Banks and FinTechs}},
year = {{2022}},
}