The thesis focuses on how Fintechs are disrupting the financial retail banking industry and how banks react to these changes. In this context, challenges and opportunities of their actions will be analyzed and discussed.
Furthermore, it will be derived how aspects of innovation influence the Fintechs success in this process and how innovation takes place in the financial industry in general.
Finally, this thesis discusses the implications of the current situation for both Fintechs and banks, and identifies potential outcomes and consequences for all involved parties.
Since the beginning of the 21st century and the spread of the internet whole industries have been transformed or became obsolete.
Disruption in the form of digitalization has taken place in the music, book, media and movie industry. Online and mobile services, offered by start-ups and technology companies are changing one industry at a time. Retail-focused companies like Apple, Netflix, Google, Amazon and Twitter have changed the way people think and use music, films, books and media. They also changed the consumers’ general perception of good service, usability and of how companies are doing business.
Despite all these improvements in our everyday life, the financial retail banking industry has remained relatively constant, even though it caused people to adapt to new circumstances, in the form of the Global Financial Crisis (GFC), resulting in a Global Recession and higher regulations for the industry. Since then, the industry missed the opportunity to regain the customers’ trust by changing their habits and improving their services. Instead, customers are increasingly unlikely to buy products or refer their bank but are increasingly prepared to leave their bank within the next six months.
This state of stagnancy inside the financial retail banking industry seems to have changed. New entrants have caused uproar in the industry. Fintechs, an acronym for financial technology, are entering the retail market, forcing banks to adapt and innovate. Online and mobile banking services are now considered to be the future of financial retail banking. Fintechs threaten to take away customers by offering better and cheaper services with higher usability. As both the number of Fintechs and their customers increase, banks realize that Fintechs are going to be a threat for them.
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 1.1 A changing industry
- 1.2 Purpose of this thesis
- 1.3 Methodology
- 1.4 Structure
- 2 Innovation in the retail banking industry
- 2.1 Innovation and change in customer behavior
- 2.2 Trends in banking
- 3 Fintechs
- 3.1 General Information
- 3.2 Business to Consumer (B2C) market
- 3.2.1 Mobile Payment
- 3.2.2 Lending
- 3.2.3 Funding
- 3.2.4 Personal Finance and Wealth Management
- 3.3 Business to Business (B2B) market
- 3.3.1 Software-as-a-Service (SaaS)
- 4 Banks response strategies
- 4.1 Copycat
- 4.2 Collaborate
- 4.3 Investment and Acquisition
- 4.4 Internal Innovation
- 5 Discussion
- 5.1 Climax and shakeout
- 5.2 Consequences for Fintechs
- 5.3 Consequences for banks
- 5.4 Consequences for the customer
- 6 Recommendations
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This bachelor thesis analyzes the dynamic interplay between established banks and emerging Fintech companies within the retail banking sector. The study aims to understand the innovative forces reshaping the industry and explore the strategic responses of banks to the Fintech challenge. It investigates how Fintechs are disrupting traditional banking models and how banks are adapting to this disruption.
- Innovation in retail banking and changing customer behavior
- The rise of Fintech companies and their business models (B2C and B2B)
- Strategic responses of banks to Fintech disruption (copycat, collaboration, investment, internal innovation)
- The potential consequences of the Fintech revolution for banks, Fintechs, and customers
- Recommendations for banks and Fintechs navigating this evolving landscape
Zusammenfassung der Kapitel (Chapter Summaries)
1 Introduction: This introductory chapter sets the stage for the thesis by outlining the significant changes occurring within the retail banking industry. It highlights the purpose of the research, which is to examine the relationship between banks and Fintechs and the innovation within the industry. The methodology employed and the overall structure of the thesis are also detailed, providing a roadmap for the reader.
2 Innovation in the retail banking industry: This chapter delves into the core drivers of innovation within the retail banking sector. It explores how changing customer behaviors and technological advancements are forcing traditional banks to adapt and innovate. The chapter likely analyzes various trends in banking, such as the increasing demand for digital services and the rise of mobile banking, highlighting their impact on the industry's competitive landscape.
3 Fintechs: This chapter provides a comprehensive overview of Fintech companies, their various business models, and their impact on the financial sector. The analysis likely distinguishes between B2C (Business-to-Consumer) and B2B (Business-to-Business) Fintechs, exploring specific examples of each. The discussion might encompass areas such as mobile payments, lending platforms, crowdfunding, and personal finance management tools, illustrating the diversity and disruptive potential of Fintech innovations.
4 Banks response strategies: This chapter examines the diverse strategies adopted by established banks to respond to the emergence of Fintechs. It analyses different approaches, such as imitation (copycat strategies), collaboration with Fintech firms, strategic investments and acquisitions of Fintech startups, and the fostering of internal innovation within the banking institutions themselves. This part probably includes case studies illustrating the effectiveness and challenges associated with each strategy.
5 Discussion: This chapter synthesizes the findings from the previous chapters, analyzing the overall impact of the Fintech revolution on the retail banking industry. It likely explores the climax and shakeout phases, assessing the long-term consequences for banks, Fintechs, and customers. The chapter might address issues such as market consolidation, regulatory challenges, and the evolution of customer expectations.
6 Recommendations: This chapter offers actionable recommendations for banks and Fintechs based on the analysis presented in the thesis. It might propose strategies for successful collaboration, innovation, and adaptation to the changing market dynamics.
Schlüsselwörter (Keywords)
Retail banking, Fintech, innovation, disruption, strategic response, business models (B2C, B2B), mobile payments, lending, crowdfunding, investment, acquisition, collaboration, internal innovation, customer behavior, competitive landscape, regulatory challenges, digitalization.
Frequently Asked Questions about "This is a comprehensive language preview which includes the title, table of contents, objectives and key themes, chapter summaries, and key words."
What is the main topic of this thesis?
This bachelor thesis analyzes the dynamic interplay between established banks and emerging Fintech companies in the retail banking sector. It explores how Fintech innovation is reshaping the industry and how banks are responding strategically.
What are the key themes explored in this thesis?
Key themes include innovation in retail banking and changing customer behavior; the rise of Fintechs and their B2C and B2B business models; banks' strategic responses to Fintech disruption (copycat, collaboration, investment, internal innovation); the consequences of the Fintech revolution for banks, Fintechs, and customers; and recommendations for navigating this evolving landscape.
What is covered in each chapter?
Chapter 1 (Introduction): Sets the context, outlines the purpose, methodology, and structure of the thesis. Chapter 2 (Innovation in retail banking): Explores innovation drivers, changing customer behaviors, and trends in banking. Chapter 3 (Fintechs): Provides a comprehensive overview of Fintech companies, their B2C and B2B models, and their impact. Chapter 4 (Banks' response strategies): Analyzes banks' strategies: copycat, collaboration, investment/acquisition, and internal innovation. Chapter 5 (Discussion): Synthesizes findings, analyzing the impact of the Fintech revolution and its consequences. Chapter 6 (Recommendations): Offers actionable recommendations for banks and Fintechs.
What specific Fintech areas are discussed?
The thesis discusses various Fintech areas within the B2C market, including mobile payments, lending, funding, and personal finance/wealth management. In the B2B market, Software-as-a-Service (SaaS) is mentioned.
What are the strategic responses of banks to Fintech disruption?
The thesis examines four main strategic responses: copycat strategies (mimicking Fintech innovations), collaboration with Fintech firms, investment and acquisition of Fintech startups, and fostering internal innovation.
What are the consequences of the Fintech revolution, according to the thesis?
The thesis analyzes the consequences for banks (potential challenges and opportunities), Fintechs (market competition and regulatory aspects), and customers (changing expectations and access to services).
What kind of recommendations are provided?
The thesis offers actionable recommendations for both banks and Fintech companies on how to successfully navigate the evolving landscape, focusing on strategies for collaboration, innovation, and adaptation to market dynamics.
What are the keywords associated with this thesis?
Retail banking, Fintech, innovation, disruption, strategic response, business models (B2C, B2B), mobile payments, lending, crowdfunding, investment, acquisition, collaboration, internal innovation, customer behavior, competitive landscape, regulatory challenges, digitalization.
- Citation du texte
- Frederic Tronnier (Auteur), 2016, Innovation in the financial retail banking industry. Are banks taking over Fintechs or are Fintechs taking over banking?, Munich, GRIN Verlag, https://www.grin.com/document/334498
