Redefining banks in the digital era: a typology of banks and their research, managerial and policy implications

Abstract

PurposeThis study aims to shed light on the evolving nature of banks in the digital era and the implications for bank marketing and management. The research addresses the need for a comprehensive typology of banks that integrates fintech and explores how traditional and app-only banks strategically position their brands. The key argument is that understanding the changing landscape of banking and the impact of technological advancements is crucial for banks to navigate the challenges and opportunities presented by fintech and digital transformation.Design/methodology/approachThis study examines literature and practices to develop a typology of banks, describing their characteristics, strengths, weaknesses and providing examples. It also proposes new research agendas for scholars and practitioners in the field.FindingsThis paper introduces a typology of banks based on their adoption of fintech and digital technologies. Three distinct types of banks are identified: Traditional banks adopting FinTech (TBAF), Traditionally Driven Neo Banks (TDNBs) and Digitally Driven Neo Banks (DDNBs). TBAF are traditional banks that have embraced fintech solutions to enhance their operations and customer experiences. TDNBs represent a hybrid model, combining the trusted brand and infrastructure of traditional banks with the digital capabilities and agility of neo banks. DDNBs are purely digital banks that operate exclusively online, offering innovative and user-friendly banking services.Originality/valueThis study is a pioneering work that classified banks based on their utilization of fintech and digital technologies. The study provides a typology of banks based on fintech adoption, offering valuable insights for bank managers, policymakers and researchers. The research also outlines a research agenda, suggesting future investigations to further enhance understanding of the evolving banking landscape and its implications.

High street banking on the app: branding strategies of traditionally-driven neobanks

“…It recognises that TDNBs build their brands by aligning with the parent brand, reinforcing the digital experience, and employing various digital marketing strategies. Further, by delving into the typology of banks and emphasising the significance of parent-brand influence, the study contributes significantly to the growing literature on banking services, branding, and digital transformation (Bravo et al, 2021;Mogaji et al, 2021;Mogaji and Nguyen, 2022a, b;Soetan et al, 2021), thus complementing the work of Mogaji (2023) on bank typology. Thus, this study sheds light on the unique banking landscape, offering insights essential for future banks to navigate the evolving challenges of branding, brand extension, and digital transformation.…”

“…A critical research gap exists in understanding the unique branding strategies employed by TDNBs, which operate as a hybrid form of banking with limited customer-employee interactions and no physical branches (Mogaji, 2023). Existing literature largely focuses upon traditional banks, leaving TDNBs, which operate predominantly in digital spaces, without tailored insights.…”

“…Despite the extensive research on customer experience in the provision of financial services (Bravo et al, 2017(Bravo et al, , 2019(Bravo et al, , 2021Ofori-Okyere et al, 2023;Soetan et al, 2021), there exists a sizeable gap in the literature pertaining to the specific experiences of customers using neobanks, especially TDNBs or hybrid neobanks (Mogaji, 2023). The existing literature offers insights into the broader conceptualisation of customer experience, emphasising factors such as functional clues, mechanic clues, and humanic clues (Chauhan et al, 2022).…”

“…However, the unique dynamics of customer interactions within the neobanking sector, characterised by digital interfaces, rapid feedback mechanisms, and innovative service offerings, have not been thoroughly explored. Further, the additional parent-brand factor attached to TDNBs provides additional context to the shaping of branding strategies and consumer attitudes (Mogaji, 2023).…”

Banking in the digital era

“…Within this redefined customer experience, traditional, digitally extended, or entirely digitized firms find strengths and weaknesses in their business models. In the article by Mogaji, the author examines how traditional, digital extensions, and fully digitized banks adopt fintech within the current market, with implications for each to optimize their design.…”