The economic impact of FinTech companies on the traditional banking sector and possible future scenarios


Bachelor Thesis, 2017
76 Pages, Grade: 1,3

Excerpt

Table of Contents

1 Introduction
1.1 Purpose of this thesis
1.2 Scope
1.3 Structure

2 Theoretical foundations
2.1 Business model
2.2 Value chain
2.3 Traditional German banking sector
2.3.1 Retail Banking
2.3.2 Sources of income in retail banking
2.3.3 Cost situation in retail banking
2.4 FinTech – emerging challengers of traditional banks
2.4.1 FinTech definition
2.4.2 FinTech business models

3 Economic impact and possible future scenarios
3.1 Driving forces behind FinTech companies
3.1.1 Customer behavior in transition
3.1.2 Trends in banking technologies
3.1.3 Cryptocurrencies
3.2 Core areas of FinTech companies
3.2.1 Payment
3.2.2 Lending
3.2.3 Personal finance management
3.3 Economic impact
3.3.1 Selected key performance indicators of a bank
3.3.2 Predictions about the future development of the selected KPIs
3.4 Possible future scenarios of banks
3.4.1 Ignore FinTech
3.4.2 Investments in the banks’ own products and incubators
3.4.3 Cooperation and acquisition
3.5 Results

4 Conclusion and outlook

Index of Figures

Figure 1-1: Attack of digital disruption on different industries

Figure 2-1: Generic schema of the value chain in banking business

Figure 2-2: Sources of income of German banks in comparison with countries

Figure 2-3: Value creation depth in industry comparison

Figure 2-4: History of labor expenses and administration costs

Figure 2-5: Cost-income-ratio from 1998 to 2015

Figure 2-6: Search frequency of the term "fintech" in the Google search engine

Figure 3-1: Global FinTech financing activities

Figure 3-2: History of mobile banking users

Figure 3-3: API Access to Core Banking Platform for FinTech companies

Figure 3-4: Development of the market for robo-advisory in Germany

Figure 3-5: Adapted banks’ value chain with intervention by FinTech companies

Figure 3-6: Scenarios in a DuPont analysis system

Index of Tables

Table 2-1: Tabular representation of the sources of income of a bank

Table 3-1: Presentation of banks’ operating result

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

The beginning of the digital revolution at the turn of the millennium has ushered in a structural change in many sectors. Due to the increased use of modern information and communication technologies (ICT), several sectors have already experienced existential economic implications (see Figure 1-1).

This is especially evident in the music, media and publishing industries.[1] For example, music is not only purchased on CDs from local retail stores, but is also increasingly consumed via the Internet through streaming services such as Spotify. Videos store rentals compete with the comfortable video-on-demand services available in customers’ own homes. The Internet as a medium for information and consumption for products and services has established itself as a faster, more comfortable and more efficient channel in comparison to traditional sales channels.[2]

Stationary retail stores were also not spared from digital disruption. The market research institute Gesellschaft für Konsumforschung (GfK) predicts a doubling of the online share of retail sales from currently to 20% by the year 2025.[3] GfK is the world’s fifth largest market research institute, based in Germany.[4]

Increasingly, digital disruption is also affecting the financial sector, which represents a significant part of the national economy. After the financial crisis of 2007-2008, banks are once again faced with a variety of challenges. Low interest rates, stricter regulatory requirements and changes in customer behavior force banks to cope simultaneously with running the banks’ day-to-day activities and improving operations through enhancements in Information Technology (IT) and other departments.

At the same time, new and innovative market participants known as financial technology or FinTech companies are edging into the financial sector and trying to gain market share from established banks through customer-friendly products and services. Nevertheless, the banks do not seem to recognize the seriousness of the situation and therefore are reluctant to adapt to the new situation.[5]

However, experience has shown that ignorance of an industry’s digitization has already led to the fall of large and established companies. As a well-known example in the technology industry, Kodak is often referred to in this context.[6] The company’s reaction to the digital disruption took place too late, whereas other companies had already recognized the trend towards digital photography at an earlier stage and prepared corresponding products. As a result, Kodak plummeted from the top of the photography technology industry.[7]

Abbildung in dieser Leseprobe nicht enthalten

Figure 1-1: Attack of digital disruption on different industries[8]

Evidence of ongoing digital disruption of the financial services sector has already been provided in the form of a new type of bank, the direct bank, which was first introduced in the early 1990s[9]. Between 2000 and 2015, the number of direct bank customers in Germany rose steadily from 3.9 million to 18.2 million and still tending upwards.[10]

FinTech companies seek to take advantage of this success and gain customers and market share by offering innovative solutions for financial products and services.

1.1 Purpose of this thesis

This thesis aims to examine the financial impact of technology-oriented FinTech companies on the traditional banking sector, and subsequently suggests a prognosis for possible future scenarios.

Because of the recent increase in the number of participants in the market for banking services, the competitive pressure on traditional banks for private and business customers has increased. To a significant extent, the transition of customer behavior and requirements in terms of banking services are responsible for this increase; this aspect will be further compounded by the demographic shift of banks’ customers. Technological progress also plays a decisive role which is also being investigated.

Initially, in order to better assess the FinTech companies and their potential effects on the banking sector, the business model and the economic value added are described. Subsequently, an overview explains current FinTech companies and trends. This overview also illustrates the branches in which the FinTech companies are particularly active and provide their services. The results from the studies are then presented in three possible future scenarios for the banking sector.

1.2 Scope

The present work focuses on retail banking in the private customer sector, where the effects of digitization are particularly noticeable. In addition, due to the scope of this work, only selected banks’ sources of income in the private customer sector are highlighted. These sources include payments, personal finance management and lending.

1.3 Structure

The first chapter introduces the topic with a discussion of prior digital disruption in various industries, with a special view to the financial sector.

The second chapter is devoted to the theoretical foundations of this thesis. A description of the German banking sector is followed by definitions of the business models of banks and FinTech companies.

Chapter three explores the potential causes of the frequent appearance of FinTech companies in the banking sector. Subsequently, the results are presented in three possible future scenarios by means of predictions about the future development of banks’ selected key performance indicators (KPIs).

Chapter four summarizes the research conducted in this thesis and provides an outlook on the future development of the traditional financial sector.

2 Theoretical foundations

Because this work discusses the digitization of the financial sector, the concept of digitization will first be explained.

The technical interpretation of digitization describes the technical process of transforming information from an analog to a digital medium. For example, an audio loudspeaker’s acoustic sound waves are detected at short, regular intervals by a digital recording device. The different pitches are then transformed into digital units and saved to a file. As a result, the previous analog medium is converted to a digital medium and can subsequently be reproduced in a short time, as frequently as desired.[11]

A more appropriate interpretation of the term in the context of this paper is the digitization of intangible products and services.[12] If, for example, the advisory function in a branch bank is considered a service, the digitized form would be the advice offered to the customer via the internet by a so-called robo-advisor, which recommends a suitable investment strategy according to the customers’ request based on different data sources and algorithms. Thus, a digital customer service is scalable, as a robo-advisor can serve multiple clients simultaneously, whereas a customer consultant is not capable of such service in a personal conversation.

Digitization in this context often refers to digital transformation. This term describes the transformation of existing structures through the aid of information technologies, as indicated in the above example regarding customer advice. The advantages of the digital transformation in this example is that the effect of economies of scale come into play, resulting in reduction of labor costs by saving time that would have been necessary to prepare for the meeting with the customer.

2.1 Business model

A business model describes the ways in which a company offers its customers a benefit in return for revenue. This exchange relationship is a transaction between the individual actors, i.e., suppliers and customers.[13]

Although there is no definitive definition of the term business model, different literature sources arrive at certain common conclusions. In addition to the abstract representation of the exchange relationship, the organizational and financial corporate structure is described by a company’s business model. The future financial revenue and expenses are planned using predictions about future market developments and a changing competitive situation.[14]

An economic entity in a capitalist economic system only enters into a transaction with another economic entity if it promises added value. A bank generates added value for the customer by meeting specific requirements with a corresponding product or service. The customer rewards the bank for the satisfaction of need by paying a certain amount of money to the bank.[15] The price of a product or service from a bank is determined by the costs incurred for the provision of the product or service; the lower the banks’ cost of delivering the products, the more favorable they can be offered to customers. This pattern is the basis of the business model and an important criterion for a bank’s competitiveness.[16]

The term business model can be conceptually classified among the subject’s business strategy and business process model. While the business strategy is intended to secure the long-term goals of a company, the business process model describes a detailed, operational description of individual activities within the company.[17]

2.2 Value chain

In order to create an offer for the customer, a product or service must first be developed intra‑company. To achieve this, the resources and capabilities of a company are deployed to create added value. The model of Michael E. Porter is suitable for describing this value creation process (see Figure 2-1). The model describes the value added by the sequential combination of different business processes; the concatenation of the individual processes is also known as a value chain and primarily consists of two categories: primary activities and support activities.[18] The generated result of the value chain is the business margin, which is calculated as the difference between the resources deployed and the generated income of the product.[19]

The primary activities include all operational processes that are primarily involved in the value added of a product or service. The basic model of Michael E. Porter includes the areas of inbound logistics, operations, outbound logistics, marketing & sales as well as customer service. Inbound logistics is responsible for receiving raw materials at the warehouses. In operations, the raw materials are processed into products by deploying human resources and energy. After the products are finished, outbound logistics distributes the products to the customers. Marketing and sales creates advertising and initiates communication with potential customers. Customer service includes after-sales activities designed to keep the product in working condition after it is sold to the customer.

The supporting activities ensure that the primary activities can be executed. In the basic model this includes corporate infrastructure, human resources (HR), technology and procurement.[20] Support activities in the company's service creation process include company infrastructure, which itself includes, in addition to employee workplaces, management and subordinate departments such as accounting. HR is responsible for the recruitment and training of employees in all areas of the company. Technology plays a central role as it is present in every area of the company and contributes to the optimization of processes and products.[21]

Since Michael E. Porter assumes a physical commodity production plant in his model, an adaptation must be made for the transfer of the value chain to a bank with predominantly intangible products and services (see Figure 2-1).[22] In the adaptation, the primary activities include only marketing, sales, product and transaction, whereby the phase of production includes the development of the intangible products, e.g., loans. The supporting activities do not differ significantly from those in a company with tangible products. Only the phase of raw materials procurement is eliminated, as sourcing of raw materials is not involved in the primary function of a bank.[23]

Abbildung in dieser Leseprobe nicht enthalten

Figure 2-1: Generic schema of the value chain in banking business[24]

The marketing and sales department has two purposes. Firstly, it identifies potential customer needs, and secondly, it gathers information from the market to assist with subsequent product development. Therefore, this department is represented by the first unit in the value chain model. A further breakdown of marketing and sales can divide the department into the areas of market research, product, price, sales, and communication policy. Division into these four areas, better known by the term marketing mix, was first proposed by Jerome McCarthy.[25] The marketing mix is a combination of decisions and actions to promote a new product or service in a previously defined target market.[26] Market research gathers information about the competitive situation, including competitor products, customer and market segments, in order to identify potential sales markets and to prepare for a market entry.[27] The marketing mix is responsible for the structural design of a product. The product policy defines product-specific properties such as the risk class of an investment product. The pricing policy determines prices and possible room for product negotiation in the form of discounts, while the sales policy makes decisions about the distribution channels into which the product is placed on the market. A distinction is made between direct sales and indirect sales. Direct sales are carried out in-house through a company’s own stores or an outbound remote connection via the Internet or telephone. Indirect sales are characterized by the redistribution of products through a reseller or trade representative. The communication policy involves transferring product information to a customer in the form of advertising.[28]

After the phase of marketing and sales as a sub-process of the value chain has been completed, the gathered information regarding potential sales markets is handed over to the value chain’s product phase; it is in this phase that the appropriate products are developed. This phase involves the development and implementation of processes and guidelines for delivering products to customers, which can include such processes as a creditworthiness check for a loan or a clarification with the customer regarding possible risks for a financial investment. If the customer has opted for a product and has agreed to the bank's offer, the third phase is initiated in the value-added process.[29]

Once an agreement between the contracting parties has been made, the bank carries out the necessary background steps for the technical execution of the transaction. In the case of financing, this includes the transfer of a loan to the customers’ account or, in the case of investment, the purchase and deposit of securities or other assets in the customers’ account.[30]

2.3 Traditional German banking sector

The German banking system in general consists of universal banks and specialist banks. The services and operations of universal banks are subject to the banking act section 1 KWG.[31] The lending and saving business especially represents a crucial function of a bank as a financial intermediary.[32]

Universal banks are divided into commercial banks, saving banks and local cooperative banks. This structure is also called three-pillar model of the banking system, which is typical for the German banking sector.

The first pillar, the commercial banks, operate internationally and focus on profit maximization. Commercial banks, such as Deutsche Bank AG, are characterized by the stakeholder approach. In contrast to the savings banks and cooperative banks, the commercial banks operate their branches predominantly in urban cities in order to ensure profit maximization by economies of scale.

In comparison to commercial banks, saving banks operate to cover costs instead of maximizing profit. These banks act on behalf of a public contract, whose primary purpose is to provide access to banking services across all layers of social classes and age groups. Savings banks act according to the regional principle and have set themselves the task of providing nationwide banking services, even in rural areas. The regional principle states that the savings banks should not compete with one another. This means, for example, that customers should not be poached from one saving bank to another.

The third pillar of the banking system, the cooperative banks, also follow the principle of nationwide banking services. Customers of cooperative banks can buy shares and become a member of the bank, which grants a voting right for decisions. In return, members participate in the profits. Furthermore, the members are offered a better price‑performance ratio for banking services by this principle in comparison to commercial banks.[33]

While universal banks offer a wide range of banking services, specialist banks focus on particular segments, such as direct banks without physical branches. Customers are able to access services via phone, e-mail or web. Specialist banks can include building societies, direct banks or investment companies.[34]

Supplementing the universal and specialist banks are the financial institutions near-banks and non-banks, which are also subject to the banking act section 1 KWG. The near-banks include credit card issuers and leasing companies. Non-banks are companies that cannot be strictly assigned to the banking system, such as department stores or car manufacturers that provide financial services to support their main business.[35]

2.3.1 Retail Banking

In order to define the concept of retail banking, it is necessary to formulate a definition of customer groups. Banks differ in the services they offer to private and corporate clients and public and institutional clients, as the requirements for banking vary between the different client groups.

Due to their positions in the economy, companies primarily use banking services to select and make investments that expand and grow their profit. Therefore, investments in new business locations or technology are made.

For public and institutional customers, including cities and communities, insurance companies, investment companies and pension funds, the focus is on investment business.[36] Regulatory restrictions must be taken into account for investment transactions made by public institutional clients in the EU. These restrictions includes, among others, the rating of a company by rating agencies. This rating is defined as the threshold value for the investment portfolio (investment grade). If the rating exceeds the threshold, a divestment of the investment is triggered.[37] This procedures result in banks needing a higher level of advisory needs for institutional customers.

For retail banking, services involving the bank giro account and payment are essential. This is the result of the way private households are run, since the transfer of salaries from employment and expenses for daily needs are handled.[38]

From this analysis, it can be deduced that products for private customers allow for a high degree of standardization, whereas the requirements of other customer groups make their products difficult to standardize due to their high complexity and degree of customization.

The consumer business, also known as retail business, can in turn be divided into two areas, the standard and the individual. The standard business includes banking services which are used by private individuals in a uniform manner. Due to the high degree of standardization, these services can be provided by the bank relatively inexpensively.[39] In this case, the fixed-cost degression effect becomes effective. Customer account management, for example, belongs to the standard business category.

The individual business includes banking services which exceed the standard business in terms of the scope of consultancy or volume. These include the active management of securities by the customer advisor or a consultation with the bank to found a business with a subsequent financing solution.

Standardization is a result of both digitization and technological progress and an effort to reduce costs by saving bank branches and staff. As a consequence, the network of bank branches in Germany contracted significantly in the period between 2003 to 2010, and more than 4,500 out of a total of around 35,000 branches were closed.[40] The employee capacity reduced by standardization could be allocated to more consultative and thus less comparable products. As a result, higher margins could be achieved in individual business than in the standard business.[41]

2.3.2 Sources of income in retail banking

The sources of income in retail banking are geared to customer needs in the retail banking business. These sources can traditionally be classified into the categories personal finance management (PFM), financial investments, financing and payment transactions (see Table 2-1).[42]

The net interest income, which is calculated from the difference between interest expense and interest income, is the most vital source of income for German retail banks.[43] Interest expenses are incurred for borrowing money, both from customer deposits and capital procurement on the capital markets; they can also be incurred from the European Central Bank (ECB). The right to interest income is generated by the provision of a loan or a bank overdraft credit to customers or companies. Due to the low interest rate environment, net interest income is under pressure. Banks have to pay interest on customers’ money into a bank giro account to be deposited at the ECB. This prompted some financial institutions to charge a custody fee, if the customer’s bank giro account exceeded approximately 100,000 euros.[44]

Abbildung in dieser Leseprobe nicht enthalten

Table 2-1: Tabular representation of the sources of income of a bank

When offering securities or other products from third parties to customers, the bank operates as an additional sales channel or intermediary. The bank receives commission from the third party in return for selling a third parties’ product to customers. Income from commissions through the intermediation of investment products is the second most important source of income.[45]

For the settlement and clearing of wire transfer payments or the provision of Automated Teller Machines (ATM), separate fees are not usually charged to the customer. The costs for the provisioning of these services are financed by the income from the giro bank account, which is usually not visible to customers.[46]

In 2016, however, the first retail bank charged an additional fee for cash withdrawals at ATMs. This fee was introduced in response to the continued low interest rates in order to mitigate the decline in interest income. As a further counteraction, commissions (i.e., fees for payment transactions, securities transactions, brokerage of credit, savings and insurance contracts) were increased.[47] Furthermore, since the early 1980s, the interest rate has shrunk from 1.75% to 1.11% in 2015, which puts additional pressure on the margin.[48]

Increasingly, banks have discovered the distribution of insurance products as an additional source of income. In retail banking, the offer of pension and investment products expand existing banking services. Particularly in the brokerage of life insurance policies, insurers using banks as sales channels recorded a growth from 19.8% to 21% compared to the preceding year of 2014. This increase makes banks the third-largest sales channel for insurance companies, contributing about half of new business to the distribution of life insurance.[49] These figures indicate that banks play an important role for the insurers, and also that customers prefer a single point of contact (SPOC) for financial matters. The challenge banks face is preparing their employees to provide traditional banking services as well as advise customers about insurance products. As a result, the complexity and demands on the flexibility of the product range increase.

The composition of earnings in the German banking sector in 2015 consisted largely of net interest income in the amount of 73%, followed by commission surpluses of 24% (see Figure 2-2) and a trading result of 3%.[50] The reason for the high proportion of interest surpluses is the tendency of companies to finance themselves through borrowed capital such as bank loans. This trend remains constant with a share of around 30% between 2009 and 2015. Equity financing averages 50% over the same period. The remainder is financed by subsidies of around 15% and equity of 5%. Banks in other countries can diversify their sources of income more widely, making them less vulnerable to interest rate risks.[51]

Abbildung in dieser Leseprobe nicht enthalten

Figure 2-2: Sources of income of German banks in comparison with countries

After the outbreak of the financial crisis, earnings in German retail banking rebounded. Between 2001 and 2007, income rose steadily from EUR 53.7 billion to EUR 69.1 billion. After a decline to 61.6 billion euros in 2010, earnings are again showing signs of growth. These earnings amounted to 68.3 billion euros in 2015.[52] In comparison, operating income across all bank groups is EUR 127.9 billion, an increase of 4 billion compared to the previous year.

2.3.3 Cost situation in retail banking

The provisioning of banking services alongside the value chain incurs costs. These costs are particularly high compared to other sectors with a high degree of outsourcing. Compared to the automobile or electrical sector, the share of internal value added in the traditional banking sector is three times higher in comparison to external procurement. Banks provide around 80% of the value-added process internally, while only 20% is provided by external suppliers (see Figure 2-3).[53] Although the general theory of the market economy states that if the cost for provisioning a service in-house is higher than it would be to procure the same service from an external party, banks tend to resist this approach.[54] The cause of this architecture of the value chain lies in the fear of loss of control, dependency, knowledge and trust.[55]

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Figure 2-3: Value creation depth in industry comparison

This architecture results in comparatively higher expenses, which can essentially be divided into labor costs and administration costs.[56] Labor costs include all employees-related charges, including bonuses, social insurance contributions and other dues.[57] Administration costs cover all expenses for banking operations, such as the maintenance of premises and offices, equipment, and costs for external consultants.[58] The share of staff costs across all bank groups amounts to 40% of operating income in 2015, while administration costs are estimated at around 30%. The total costs amount to around 90 billion euros, an increase of 5% (4.3 billion euros) compared to the preceding year. This increase results in a new peak in the understanding of total costs (see Figure 2-4). Further cost‑drivers include investments in digital development. In 2015, 84% of retail banks worldwide increased their investments in digitization, an increase of 5% compared to the previous year. In 2009, this share was merely 15%. The investments are mainly driven by the optimization of user-friendliness (84%), followed by streamlining processes (70%), product development (67%) and optimization of sales channels (60%).[59] The percentage distribution of investments allows a conclusion to the previously neglected segments. The optimization of user-friendliness is the highest priority for investments.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2-4: History of labor expenses and administration costs

In order to better assess the economic efficiency of a bank and to make it comparable to other banks, the KPI cost‑income ratio (CIR) is formed. This ratio is calculated from the ratio of costs to gross profit. The result is expressed as a percentage and indicates the amount of effort that must be spent in cents to generate one euro. Hence, the lower the ratio, the more efficiently the bank operates. However, this measure is meaningful only in a market with equal conditions (for example, net interest margin). This figure does not allow any conclusions about the actual amount of income and expenses.[60]

Abbildung in dieser Leseprobe nicht enthalten

Figure 2-5: Cost-income-ratio from 1998 to 2015

As can be seen in Figure 2-5, since the year of the financial crisis, the CIR has increased once again. This can be explained by declining margins in combination with a simultaneous increase in expenses. This combination raises the pressure on banks’ profit margins.

2.4 FinTech – emerging challengers of traditional banks

A possible cause for the rising trend of CIR is the frequent occurrence of FinTech companies in the banking sector, which increase competitive intensity and therefore increases the pressure on margins.

2.4.1 FinTech definition

The term FinTech is a portmanteau word consisting of the words financial and technology. It includes all companies and start-ups that make classic financial services and products more accessible to customers through modern technologies. FinTech is primarily a name for young and innovative companies, which usually use the opportunities offered by modern ICTs in order to offer customers a significantly improved banking experience. In addition to simple user-friendliness across all device classes from the smart watch to the desktop computer, the FinTech experience also involves a high degree of automation and thus greater efficiency in the handling of financial matters. Traditional banks have paid little attention to this market segment until a few years ago. In addition to the young FinTech companies, however, well‑established and large companies, such as Apple and Google, also contribute to the FinTech segment.[61]

As example of the simplification of the bank account-opening process can be demonstrated. Whereas a time‑consuming visit to a branch bank is usually necessary to open an account, with a mobile device and a subsequent personal identification via video recording, such an account can be opened within a few minutes. One of the first banks of this kind, Number26, was founded in 2013 and was able to win over 100,000 customers for this type of bank giro account within just one year.[62] Meanwhile, Number26 counted half a million customers as of August 2017 and has 1,500 new accounts opening daily.[63]

The difference from the direct bank lies in the initiation of the contractual relationship. While traditional direct banks still rely on a personal authentication of the customer at the switch of a post-office (Post-Ident), Number26 uses technological possibilities for easy and secure authentication of the customer.

The importance of the still relatively young FinTech sector can also be derived from the rapidly increasing interest as a search term in Google, the world’s leading search engine. Their product, Google Trends, provides important indicators of the population’s interests, as four out of five Internet users make use of search engines to retrieve information.[64] In November 2016, the term “FinTech” reached its highest-ever search volume. Four years earlier the popularity of the search term was still close to zero (see Figure 2-6).

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Figure 2-6: Search frequency of the term "fintech" in the Google search engine

A further indication of the strength and the role of the FinTech sector are the increasing funding activities of young startups and companies worldwide. A study estimated the 1,255 global investments in FinTech companies in 2015 to be 47 billion dollars. In 2010, such investments, with 319 investments and a volume of 9 billion dollars, represented only a fraction of this amount. On average, investments per transaction increased by approximately 30% from USD 28.2 million to USD 37.5 million.[65]

Above all, FinTech companies are characterized by the fact that they focus on optimizing a single product category through innovative technologies. Thus, the value creation process can be streamlined, operating effectively and inexpensively. This streamlining contrasts with traditional banks, whose product portfolio is broadly diversified from financing to lending to payment transactions, and is also characterized by a large share of internal value added.[66] In principle, FinTech companies are performing an externally-driven and hostile outsourcing of particular areas of the value-added process, as the outsourcing of certain areas of the banks’ value chain are not explicitly demanded by the banks.

[...]

[1] Cf. (Dapp, Slomka, & Hoffmann , 2014), p.4

[2] Cf. (Allensbach, 2016)

[3] Cf. (Lichtner, 2015), p. 2

[4] Cf. (GfK, 2016), p. 52

[5] Cf. (Sinn, Vater, Lubig, & Kasch, 2012), p.6

[6] Cf. (Luerßen, Zillmann, & Buxmann, 2016), p. 6

[7] Cf. (Azhari & Faraby et al., 2014), p. 16

[8] Cf. (Bradley, Loucks, & Macaulay et al., 2015), p. 6

[9] Cf. (Schöning, 2000), p. 57

[10] Cf. (Luber, 2013), p. 1

[11] Cf. (Hess, 2016); (Dapp, Slomka, & Hoffmann , 2014), p. 6

[12] Cf. (Matt, Hess, & Benlian, 2015), p. 339

[13] Cf. (Al-Debei , El-Haddadeh, & Avison, 2008), p. 2

[14] Cf. (Becker & Ulrich, 2015), p. 121

[15] Cf. (Koye, 2005), p. 25

[16] Cf. (Auge-Dickhut, Koye, & Liebetrau, 2014), p. 54 ff.

[17] Cf. (Al-Debei , El-Haddadeh, & Avison, 2008), p. 6

[18] Cf. (Meffert, 1989), p. 262

[19] Cf. (Müller-Stewens & Lechner, 2005), p. 369

[20] Cf. (Büschgen H. , 1998), p. 868 ff

[21] Cf. (Büschgen H. , 1998), p. 868ff

[22] Cf. (Busch, 2005), p. 89; (Clement & Schreiber, 2013), p. 45;

[23] Cf. (Dombret & Kern, 2003), p.29; (Hamoir, McCamish, Niederkorn, & Thiersch, 2002), p. 123

[24] Cf. (Lammers, Loehndorf, & Weitzel, 2004), p. 6

[25] Cf. (McCarthy, 1960), p. 45

[26] Cf. (Kotler, 2000), p. 9

[27] Cf. (Büschgen & Büschgen , 2002), p. 527 ff; (Hammann & Erichson, 2006), p. 33 ff

[28] Cf. (Grill & Perczynski, 2001), p. 16 ff; (Kotler, Armstrong, & Saunders, 1999) p. 139 ff; (Kuhn, 1999) S. 1288ff; (Lammers, Loehndorf, & Weitzel, 2004) p. 6; (Nieschlag, Dichtl, & Hörschgen, 1997) p. 21; (Süchting & Paul, 1998), p. 3 ff

[29] Cf. (Büschgen H. , 1998), p. 327; (Cramer, 1999), p. 20; (Grill & Perczynski, 2001), p. 12 ff; (Hartmann-Wendels, Pfingsten, & Weber, 2000), p. 149 ff; (Lammers, Loehndorf, & Weitzel, 2004), p. 6

[30] Cf. (Grill & Perczynski, 2001), p. 113ff; (Blitz , 1999), p. 2097 ff

[31] Cf. (Hartmann-Wendels, Pfingsten, & Weber, 2000), p. 26 ff

[32] Cf. (Tolkmitt, 2007), p. 3 ff

[33] Cf. (Tolkmitt, 2007), p. 51 ff

[34] Cf. (Tolkmitt, 2007), p. 18

[35] Cf. (Stobbe, 2001), p. 2

[36] Cf. (Tolkmitt, 2007), p. 374

[37] Cf. (Blaurock, 2007), p. 608f.

[38] Cf. (Paul, 2015), p. 5

[39] Cf. (Tolkmitt, 2007), p. 376

[40] Cf. (Bernhardt & Schwartz, 2014), p. 1

[41] Cf. (Köhler & Lang, 2008), p. 4

[42] Cf. (Auge-Dickhut, Koye, & Liebetrau, 2014), p. 138; (Schüler, 2002), p. 15

[43] Cf. (Deutsche Bundesbank, 2014), p.3; (Botsis, Hansknecht, & Hauke et. al, 2015), p. 76

[44] Cf. (Siedenbiedel, 2016)

[45] Cf. (Deutsche Bundesbank, 2016), p. 76

[46] Cf. (Mussler, 2016)

[47] Cf. (Keller, 2016); (Deutsche Bundesbank, 2016), p. 76

[48] (Deutsche Bundesbank, 2016), p. 67

[49] Cf. (von Fürstenwerth, 2016), p. 1

[50] Cf. (Sinn & Schmundt, Deutschlands Banken 2016: Die Stunde der Entscheider, 2016), p. 9; (Deutsche Bundesbank, 2016), p. 78

[51] Cf. (KFW, 2016), p. 13

[52] Cf. (Arbeitgeberverband des privaten Bankgewerbes e.V., 2012), p. 8

[53] Cf. (Ackermann, 2005), p. 7; (Kern & Wildhirt et al, 2016), p. 28

[54] Cf. (Staehle, 1999), p. 420 ff

[55] Cf. (Bohr & Weiß, 1994), p. 442; (Hirschbach, 2003), p. 576; (Picot, 1991), p. 345; (Schierenbeck, 2001), p. 584; (Süchting & Paul, 1998), p. 287

[56] Cf. (Elschen, 2009), p. 51

[57] Cf. (Preißler & de Gruyter, 2008), p. 204

[58] Cf. (Deutsche Bundesbank, 2015), p. 56

[59] Cf. (Desmares & Reh, 2015), p. 15

[60] Cf. (Deutsche Pfandbriefbank AG, 2016), p. 4; (Gischer & Richter, 2014), p. 8

[61] Cf. (Mackenzie, 2015), p. 1; (European Banking Federation, 2015), p. 2; (Gimpel, Rau, & Röglinger , 2013), p. 3; (Dapp, Slomka, & Hoffmann , 2014), p. 1

[62] Cf. (Seibel, 2016)

[63] Cf. (IT Finanzmagazin, 2017); (Schwarzmüller, 2017)

[64] Cf. (Ipsos, 2014)

[65] Cf. (KPMG, 2017), p. 9

[66] Cf. (Existenzgründungen aus der Wissenschaft, 2016); (Jaggi, 2016); (Drummer, Jerenz, Siebelt, & Thaten, 2016), p. 3; (FMA, 2016), p. 1; (Keuper, 2015); (Kipker, 2014), p. 8

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Details

Title
The economic impact of FinTech companies on the traditional banking sector and possible future scenarios
College
University of applied sciences Frankfurt a. M.  (FOM)
Grade
1,3
Author
Year
2017
Pages
76
Catalog Number
V378376
ISBN (eBook)
9783668565340
ISBN (Book)
9783668565357
File size
1630 KB
Language
English
Tags
FinTech, Traditional Banking, Economic Impact, Future scenarios
Quote paper
Malik Dakdaki (Author), 2017, The economic impact of FinTech companies on the traditional banking sector and possible future scenarios, Munich, GRIN Verlag, https://www.grin.com/document/378376

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