Strategic Alliances between Banks and Fintechs for Digital Innovation: Motives to Collaborate and Types of Interaction

Klus, Milan Frederik; Lohwasser, Todor Stefan; Holotiuk, Friedrich; Moormann, Jürgen

doi:10.57229/2373-1761.1346

Cited by 39 publications

(41 citation statements)

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“…A further identified rationale is the mutual cultural and strategic knowledge transfer from financial incumbents and early-stage companies. Financial technology startups can mainly benefit from the sophisticated market, legal, regulatory, product development, customer know-how and network effects of corporations within the financial industry (Klus et al , 2019). Besides, financial institutes can receive value-adding insights into the different working and thinking design approaches of financial startups.…”

Section: Collaboration Motivesmentioning

confidence: 99%

“…Besides, financial institutes can receive value-adding insights into the different working and thinking design approaches of financial startups. Companies can use these insights to adjust or discuss outdated, inefficient or obsolete internal structures (Klus et al , 2019). The last common collaboration reason is that competition includes the possibility of joining forces against significant competitors.…”

Section: Collaboration Motivesmentioning

confidence: 99%

“…For instance, as a unit, FinTechs and financial incumbents can respond more efficiently to influential entities such as bigtechs (Fonseca and Meneses, 2020). An alliance can incorporate an additional competitive advantage for financial institutes and FinTechs toward their direct competitors in the market (Bömer and Maxin, 2018; Klus et al , 2019).…”

Section: Collaboration Motivesmentioning

confidence: 99%

“…The last category is the operational and financial product development motive. The cooperation rationale of financial technology-driven startups is to develop further, pivot or test certain functionalities of their products and services based on the well-qualified infrastructure and data of collaborative institutions (Klus et al , 2019). But, these early-stage companies need sufficient funding or financial power to realize product enhancement and to enable their growth potential.…”

Section: Collaboration Motivesmentioning

confidence: 99%

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FinTechs and the financial industry: partnerships for success

Ruhland

Wiese

2022

JBS

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Purpose The challenge of innovation and digitalization leads financial institutions and FinTechs to cooperate with each other. Therefore, it becomes more and more important to understand the why of the partnering, as success depends on it. The purpose of this paper is to derive most important common and specific strategic cooperation rationales between financial institutions and FinTechs, which serves as a value adding guideline for both parties. Design/methodology/approach This study first derives from a literature review the collaborative motives between FinTechs and financial institutions. Based on these findings, eight in-depth and semi-structured interviews with experts were conducted, providing insights as well as grading the motives Findings Starting from the FinTech perspective, the most relevant partnership motives were found to be financial return, reputation and credibility. The access primarily drives these motives to additional customer acquisition channels and a reputational quality signaling of the FinTech products or services within the market. On the other hand, the most critical incumbent motives were shown to be customer satisfaction and business model innovation. From a corporate perspective, these motives mainly incorporate the opportunity to challenge, pivot and expand the existing business model while increasing customer satisfaction via additional innovative products or services. Starting from the FinTech perspective, the most relevant partnership motives were found to be financial return, reputation and credibility. The access primarily drives these motives to additional customer acquisition channels and a reputational quality signaling of the FinTech products or services within the market. On the other hand, the most critical incumbent motives were shown to be customer satisfaction and business model innovation. From a corporate perspective, these motives mainly incorporate the opportunity to challenge, pivot and expand the existing business model while increasing customer satisfaction via additional innovative products or services. Research limitations/implications From a thematical limitation perspective, the interviewee sample size is comparatively moderate-low and the candidates are primarily active on European markets. Therefore, the analyzed motives are limited to European strategic preferences and do not reflect all intercontinental collaboration positions. Further, the strategic collaboration rationale evaluation framework is limited to the financial industry. Thus, this framework cannot be directly applied to other sectors or even further startup segments within the economy. Practical implications From a practical perspective, this study provides a top-level overview and guideline of the least and most relevant collaboration motives from a FinTech and financial incumbent point of view. It supports both cooperative parties to improve potential strategic partnership negotiation outcomes. Originality/value In contrast to the previous, mainly bank-focused partnership research approaches, this study provides broader collaborative insight within the financial industry by gathering interview data from FinTech, insurance, bank and asset management experts. Furthermore, the derived framework has a practical usage in the collaboration process.

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Section: Collaboration Motivesmentioning

confidence: 99%

Section: Collaboration Motivesmentioning

confidence: 99%

Section: Collaboration Motivesmentioning

confidence: 99%

Section: Collaboration Motivesmentioning

confidence: 99%

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FinTechs and the financial industry: partnerships for success

Ruhland

Wiese

2022

JBS

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“…Innovation plays a vital role in the banking business in improving bank efficiency (K. Wang et al, 2014). In addition, Klus et al (2019) and Holotiuk et al (2018) propose that bank innovation in fintech can boost bank efficiency. In quantitative research, Phan et al (2020) discover that FinTech has a detrimental impact on the performance of Indian banks, whereas (Y.…”

Section: Introductionmentioning

confidence: 99%

Fintech Innovation and Bank Efficiency in Indonesia

Maryunita

Nugroho²

2022

Khazanah Hukum

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This study intends to determine the impact of fintech adoption on the efficiency of conventional banks in Indonesia between 2013 and 2019. The population of this study consisted of all conventional banks listed on the Indonesia Stock Exchange (IDX) between 2013 and 2019, whilst the sample consisted of 38 conventional banks selected using the purposive sampling technique. This study employs two analyses: Data Envelopment Analysis (DEA) to measure bank efficiency and panel data regression analysis to test the hypothesis of the effect of fintech adoption on commercial banks in Indonesia in 2013-2019 using the Stata program. According to the findings of this research, fintech appears to have a positive and discernibly noticeable impact on the operational efficiency of banks. The greater the number of fintech facilities offered by banks, the greater their efficiency; therefore, banks must strengthen innovation and bank infrastructure in order to implement fintech.

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Investigating the robustness and relevance of an evidence‐based sense‐making construct to bridge the research‐practice gap in cross‐sector partnerships

Bampoh,

Sdunzik,

Sinfield

et al. 2023

Bus Strat Dev

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Cross‐sector partnerships (CSPs) are important for tackling development challenges across public, private, and non‐profit sectors. Despite their growing prevalence as partnership models of choice for grand challenge efforts, there is little evidence‐based understanding about the dominant features of these engagements. This makes it difficult to develop CSP engagement models that are useful across development problems and settings. We posit that CSPs are intrinsically cross‐disciplinary endeavors and require collaboration models that enable interdisciplinary problem orientation and solution casting. To facilitate sense‐making in partnership efforts, a CSP engagement model must therefore integrate perspectives on partnership from major disciplines and practitioner experiences. Using automated content analysis of peer‐reviewed publications and manual content analysis of practitioner interviews, we explored the robustness and relevance of partnership capacity theory (PCT), an interdisciplinary CSP engagement model, as an evidence‐based approach to CSP with best‐practice grounding. We found PCT comprehensively characterizes collaborative CSP dynamics and offers a foundational view of CSP best practices.

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Strategic Alliances between Banks and Fintechs for Digital Innovation: Motives to Collaborate and Types of Interaction

Cited by 39 publications

References 0 publications

FinTechs and the financial industry: partnerships for success

FinTechs and the financial industry: partnerships for success

Fintech Innovation and Bank Efficiency in Indonesia

Investigating the robustness and relevance of an evidence‐based sense‐making construct to bridge the research‐practice gap in cross‐sector partnerships

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