FinTech, BigTech and Banks by Alessandra Tanda & Cristiana-Maria Schena
Author:Alessandra Tanda & Cristiana-Maria Schena
Language: eng
Format: epub
ISBN: 9783030224264
Publisher: Springer International Publishing
Source: The authors’ own elaborations
The first indication which emerges from Table 4.1 is that no area of activity in which a single strategic approach is used by the sample banks exists. Considering the level of intensity of the initiatives, it is clear that the banks, in general, have paid special attention to digital developments in payment services which, as we have seen, constitute FinTech’s original area of development and have been widely developed by BigTech firms. In this area, the banks have adopted various strategic approaches: 17 banks (14 of which are European) have acquired shareholdings in FinTech firms, 8 banks (7 of which are European) have entered partnerships and 11 banks (9 of which are European) have developed in-house projects. Interest by incumbent firms in blockchain type technologies is also extremely high. In this context, 23 of the sample’s banks (19 of which are European) have invested in Tech companies and 1 European bank has activated a partnership with a Tech company.
Further considerations can be made on the basis of an examination of the various types of strategic solutions adopted.
Acquiring shareholdings in FinTech and Tech companies is the most frequently used strategy for the development of most of the financial and instrumental services. It is plausible that this is a result of a desire on the part of the banks to identify rapid and immediate operational solutions for the development of specific operational areas in which FinTech and Tech firms have now acquired great expertise and developed more advanced technological solutions. In particular, it is clear that this solution has been adopted especially frequently in payment services development (17 cases of which 14 by European banks) and blockchain (23 cases, 19 of which are European).
In-house development applies to the majority of banks in the personal finance and online banking area focusing principally on retail clients (14 cases, 12 of which are European banks), wealth management (13 cases, 10 of which are European banks) and security, compliance and data protection (10 cases, 8 of which are European). This would seem to show a desire on the part of the large banks—both European and non-European—to move on to internal development of the main core business areas and those of greatest added value as well as activities linked to the internal supervision system which is of strategic importance in client relations.
Partnerships were resorted to in a smaller number of cases and related primarily to payment services (8 cases, only one of which was a non-European bank) and wealth management (7 cases, 5 of which were European). This solution is thus considered secondary by the large banks, at least in numeric terms, presumably because it reduces the chances for a single direction in business management. In the context of this sample, it is clearly not an alternative to the others but rather a complementary solution in the context of complex projects hinging on various strategic approaches.
On the basis of what we have seen thus far, the most interesting areas of technological development for the sample’s banks seem to be personal finance and payment services.
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