FinTech: A New Hedge for a Financial Re-intermediation. Strategy and Risk Perspectives

Abstract

The emergence of new technologies and players, along with a favorable regulatory framework (PSD2 Directive), is changing the banking industry. FinTechs and TechFins have allowed the introduction of new services and changed the way customers interact to satisfy their financial needs. The FinTech landscape is constantly evolving in the market. Different business value propositions are entering the financial services industry, moving from increasing the user's experience to developing a time to market framework for banks to innovate products, processes, and channels, increasing the cost efficiency and looking for a "partnering on order" to lighten the regulatory burdens for banks. The many businesses of banks are changing their value chains, and banks' business models should do the same accordingly. Strategists could no longer take their value chains as a given; choices have to be made on what needs to be protected and maintained, what abandoned and the new on coming to make banks evolve and become more resilient in doing their job. Banking is shifting significantly from a pipeline, vertical paradigm, to open banking business models where open innovation, modularity, and ecosystem-based bank's business model may become the ongoing mainstream and paradigm to follow and develop. Opportunities and threats for banks are many and new ones to regaining their role in the market throughout a re-intermediation process.

Fintech Frontiers in Quantum Computing, Fractals, and Blockchain Distributed Ledger: Paradigm Shifts and Open Innovation

“…In the following paragraphs, three scientific sectors and their paradigm shifts are, therefore, briefly but exhaustively analyzed: geometry, physics, and database systems. All the possible known or potential applications that the new technologies introduced by these scientific revolutions can impact the Fintech sector will also be identified in the findings of this research, therefore expanding its frontiers [19][20][21].…”

Global networks of money and information at the crossroads: Correspondent banking and SWIFT

“…Building on this, global finance has been posited as ‘a system for keeping track (and profiting from the manipulation) of information on ownership claims, debts, revenue streams, exposure to or protection from risk’ (Campbell‐Verduyn et al., 2019, p. 914). However, transaction data and information have been thus far underutilized for reputational and regulatory reasons (Omarini, 2020), meaning that ‘until now, banks have thrived on money, not data’ (Westermeier, 2020, p. 2). Payment data and information, such as transaction history and payment instruction information, for both retail and corporate customers, nonetheless constitutes an increasingly important data source, becoming more valuable than payment fees (O'Dwyer, 2019; TechCrunch, 2012).…”

“…However, transaction data and information have been thus far underutilized for reputational and regulatory reasons (Omarini, 2020), meaning that 'until now, banks have thrived on money, not data' (Westermeier, 2020, p. 2). Payment data and information, such as transaction history and payment instruction information, for both retail and corporate customers, nonetheless constitutes an increasingly important data source, becoming more valuable than payment fees (O'Dwyer, 2019;TechCrunch, 2012).…”

The Relevance of Initial Trust and Social Influence in the Intention to Use Open Banking-Based Services: An Empirical Study

“…Existing research about open banking is centered around three axes. First, a strand of literature analyzes open banking from the perspective of business model innovation (Omarini, 2020; Ozcan et al, 2019). A second strand focuses on the regulatory view of open banking and its specificity in the different jurisdictions (Ziegler, 2021).…”