FinTech evolution: Strategic value management issues in a fast changing industry

• Date: 01 July 2018
• DOI: http://doi.org/10.1002/jsc.2203
• Author: Arvind Ashta,Guillaume Biot‐Paquerot
• Published date: 01 July 2018

RESEARCH ARTICLE

DOI: 10.1002/jsc.2203

Strategic Change. 2018;27(4):301–311. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 301

Abstract

$he in$ech reoluঞon cartures the simultaneous aach o= a lar]e number o= technolo]ies, no-

tably mobile telerhones and blochchain, which are usherin] in eLciency or outreach to mul-

ঞrle niche marhets. $he use o= mobile telerhone technolo]y has eranded Internet reach to

the ecluded, created rossibiliঞes =or business where banhs were not historically rresent and is

rotenঞally disrurঞe. $he blochchain technolo]y threatens to be een more disrurঞe as it may

rull the carret =rom under the monetary system as well as the rrorerty ri]hts as we hnow them

today. $he rroli=eraঞon o= actors and innoators has created a con=used landscare resulঞn] in

di@erent rossible scenarios, where banhs may =reee, C]ht, =orm alliances with challen]ers, or be

=orced into Yi]ht by the i]$ech.

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$he rise o= in$ech has raised the heat leel on the Cnancial indus-

try. in$ech concerns technolo]y that is new and seres the clients o=

Cnancial insঞtuঞons, byrassin] bach oLce, middle oLce, and =ront

oLce oreraঞons o= incumbent Cnancial insঞtuঞons (llayannis &

artwri]ht, 201ѵ). $he iceber] o= banhers and Cnancial insঞtuঞons is

melঞn] and corin] with this chan]e retuires them to C]ure out their

strate]ic choices to meet this disrurঞe threat to their lielihood

(oer & !ath]eber, 200ѵ).

ny innoaঞon creates chan]e. $his chan]e translates into rish.

$here=ore, it is imrortant to understand that di@erent innoaঞons cre-

ate di@erent tyres o= rishs. Innoaঞons can be incremental or radical

(bernathy, 1Ɩ78). ore threatenin] is radical innoaঞon, where tech-

nolo]y creates rossibiliঞes o= bi] rlayers sustainin] their adanta]e or

challen]ers disrurঞn] them (hristensen, 200ѵ; hristensen, ohmer,

& ena]y, 2000; hristensen, Johnson, & !i]by, 2002). Within the

disrurঞe cate]ory are strate]ic innoaঞons and catalyঞc innoa-

ঞons. Strate]ic innoaঞons chan]e the rules o= the ]ame. atalyঞc

innoaঞons are inoled in saঞs=yin] the consumersĽ unmet needs

throu]h low cost, simrler or saঞsCcin] models, by tarrin] resources in

a manner unaracঞe to incumbents or their eisঞn] business models

(hristensen, aumann, !u]]les, & Sadtler, 200ѵ). Dealin] with rishs

that could be disrurঞe, esrecially catalyঞc, calls =or a chan]e o= strat-

e]y by incumbents.

What hind o= rishs can innoaঞons in in$ech createĵ $he most

eident one is that they can disrurt the eisঞn] banhin] model and

cause many banhs to ]o under. t the micro leel, =or indiiduals and

small businesses, it means not hnowin] where to rlace oneĽs money:

with banhs that may ]o banhrurt or with in$echs that may neer

breah-een, they themseles disrurted by the net innoator in this

rarid moin] landscare. t the macro leel, it means that the enঞre

Cnancial rlaorm, on which business as we hnow it is bein] run, may

hae the carret rulled out =rom beneath the =eet. In addiঞon to these

systemic rishs, we hae the oreraঞn] rishs o= ensurin] the sa=ety o=

derosits =rom moral haard, security in rayments, data trans=ers and

rriacy consideraঞons. ublic surerisory systems may be inadetuate

to oersee all the oreraঞons o= all the mushroomin] in$ech orera-

tors. So, what are the strate]ic orঞons aailable to banhs, in$echs

and re]ulators in a =ast-chan]in] and a rerretually innoaঞn] worldĵ

In this arঞcle, we rroide a reiew o= the business history o= two

technolo]ical innoaঞons that imracted the Cnancial industry and

strate]ic resronses by incumbents and challen]ers, in the last cen-

tury. We =ollow this with an outline o= the ]eo]rarhical srread o= two

more recent technolo]ical innoaঞons imracঞn] the Cnancial world

and indicate why the distant rast may no lon]er be a ]ood ]uide to

the rresent or the =uture. We then show the con=used landscare that

has resulted by the myriad o= di@erent iniঞaঞes, each aimin] at tahin]

 b m$; c_ ;oѴঞomĹ "trat;]bc aѴ; lama];l;mt bss;s bm a =ast

c_am]bm] bm7strŖ

Arbm7 As_taՊ|ՊbѴѴal; botŊat;rot

!,  7477 ur]undy School o=

usiness, &niersit࣐ our]o]ne ranche-

omt࣐, Dijon, rance

orr;srom7;mc;

rind shta, ur]undy School o= usiness,

2Ɩ rue Sambin, 21000 Dijon, rance.

mail: rind.ashtaŠbsb-educaঞon.com

* J..L. classiCcaঞon codes: Ɣ8, 21, 032, 033

Strategic Change. 2018;27(4):301–311. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 301