The purpose of this study is to illustrate how Fintech startups and other non-financial institutions reshape the finance industry as they take advantage of recent technology trends and lifestyle shifts affecting customers’ expectations.
The thesis aims to show how the competitive landscape changes and to what extent digital attackers grab parts of the value chain. The study also maps out the Fintech landscape, highlights important growth trends and gives an overview of the services and products with which Fintech startups are currently edging into the market.Moreover the study points out the specific drivers and barriers relevant to Fintech companies.
A further objective was to find out whether Fintech startups pose a serious threat to traditional providers and if so, which generic approaches exist to deal with these attackers. Apart from that the aim was to identify how peers address digitization as well as what strengths traditional banks can rely on. Last but not least the study demonstrates what banks and other institutions can learn from Fintech startups and how the future of finance could develop and look like in 2020.
Table of Contents
1 Introduction
1.1 What is Fintech and why does it matter?
1.2 Purpose of the Study
1.3 Methodology
2 The Changing Consumer Behavior
2.1 Internet Penetration
2.2 Mobile Penetration
2.3 Recent Trends in Banking
2.4 The Role of the Branch
3 Fintech Startup Landscape Analysis
3.1 Different Types of Fintech Startups
3.1.1 Lending Platforms
3.1.2 Mobile Payments
3.1.3 Equity Financing
3.1.4 Remittances/FX
3.1.5 Consumer Banking
3.2 Threats and Weaknesses of Fintech Startups
3.2.1 Regulatory Challenges
3.2.2 Fintechs vs. Banks
3.3 Opportunities and Strengths of Fintech startups
3.3.1 Cooperation instead of Disruption
3.3.2 Fintech Hubs and Clusters
3.3.3 Attractiveness of the UK Market
3.3.4 Benefits of having a Fintech Cluster close to home
4 Finance 2020
4.1 Digital Economy and Structural Change
4.2 mBank as a Role Model for other Institutions
4.3 The Uber Effect
5 Conclusion and Recommendations
Objective & Topics
This thesis examines how Fintech startups and changing consumer behaviors are driving digital transformation in the financial services industry, ultimately exploring the competitive dynamics between traditional banks and new digital market entrants.
- The impact of digitization on consumer expectations and behaviors.
- Categorization and analysis of different Fintech startup business models.
- Evaluation of regulatory hurdles and market entry barriers for Fintechs.
- Strategic insights for traditional banks regarding cooperation versus competition with digital disruptors.
Excerpt from the Book
3.1.1 Lending Platforms
The previously mentioned startup, Kreditech, belongs to the category of lending startups. Kreditech is an online short term lending platform for consumers that provide loan sizes of up to EUR 5.000 from their own balance sheet. Through self-learning algorithms that analyze and check all sorts of personal available data points in the Internet, such as Facebook, Amazon and Ebay the company is able to accurately calculate an individuals credit score. Kreditech for example uses social connections as an indicator of a person’s creditworthiness. Kreditech knows whether a friend of yours on Facebook was late paying back a loan. If so your credit score automatically drops. If you frequently interact with this person on Facebook, your score drops even further. This means that your social contacts have a significant impact on your credit score. Kreditech even analyses how much time you spend reading about the loan terms and conditions. If you decide not to spend time reading the details your credit score also decreases. Based on the credit score the individual then receives or doesn’t receive the credit he applied for. Just within the last 12 months Kreditech has been growing at a rate of 500 %.
Summary of Chapters
1 Introduction: Provides an overview of the disruptive digital change in the financial sector and defines the purpose and methodology of the study.
2 The Changing Consumer Behavior: Examines how increasing internet and mobile penetration combined with shifts in banking habits are changing consumer expectations.
3 Fintech Startup Landscape Analysis: Maps the competitive landscape by analyzing various Fintech business models, their strengths, weaknesses, and the influence of regulatory environments.
4 Finance 2020: Offers an outlook on future trends, the necessity of digital transformation for traditional banks, and successful role models like mBank.
5 Conclusion and Recommendations: Summarizes the key findings and provides strategic recommendations for both traditional institutions and new Fintech entrants.
Keywords
Fintech, Digital Transformation, Consumer Behavior, Mobile Banking, Lending Platforms, Equity Financing, Regulatory Challenges, Innovation, Cooperation, Disruption, Big Data, Banking Infrastructure, mBank, Financial Services, Customer Experience
Frequently Asked Questions
What is the core focus of this thesis?
The paper explores the influence of emerging Fintech startups and shifting consumer habits on the traditional financial services industry, focusing on how these factors drive digital transformation.
What are the primary thematic areas covered?
Key topics include the evolution of consumer behavior, an in-depth analysis of Fintech startup business models, regulatory hurdles, and strategies for future-proofing financial institutions.
What is the primary research objective?
The study aims to map the Fintech landscape, assess whether these startups pose a genuine threat to traditional banks, and determine how established players can effectively respond to digital attackers.
Which scientific methods were employed?
The research relies on a comprehensive literature review combined with primary qualitative research through face-to-face interviews with industry professionals and leaders from organizations like CommerzVentures and mBank.
What does the main body of the work address?
It covers the digitization of the financial sector, evaluates specific Fintech categories (such as lending, mobile payments, and crowdfunding), analyzes the impact of regulations, and provides a forward-looking perspective on the financial industry in 2020.
Which keywords best describe this research?
The work is characterized by terms such as Fintech, digital transformation, consumer behavior, mobile banking, regulatory challenges, and strategic cooperation.
How does the author view the potential for cooperation between banks and Fintechs?
The author suggests that instead of viewing each other solely as disruptors, many banks are finding value in establishing partnerships or acquiring Fintechs to leverage their innovation and agility.
What significance does the "Uber Effect" have in this study?
The author uses the "Uber Effect" to illustrate how high levels of venture capital and massive consumer adoption can force the liberalization of highly regulated markets, serving as a warning or lesson for traditional financial institutions.
- Citation du texte
- Viktor Kanzler (Auteur), 2015, How do Fintech Startups and a Changing Consumer Behavior Reshape the Financial Services Industry?, Munich, GRIN Verlag, https://www.grin.com/document/299349
