title: Digitalization in the Financial Services Industry: Fostering Innovation Through Fintechs and Blockchain Technology
Creators: name: Schweizer, André
Publisher: name: University of Bayreuth
Year: 2019
Subjects: subject: Digitalization, innovation, fintech, blockchain, financial services industry
subject: 004
subject: 330
subject: 360
subject: 600

description: Digitalization is forcing organizations to continuously evaluate and innovate their business models (Bharadwaj et al. 2013). In particular, digital innovation is leading to fundamental changes in the financial services industry (Barberis and Chishti 2016). Agile and innovative financial technology startups (fintechs) are known as a driver of these changes, since they address emerging customer demands by developing innovative technology-based solutions with user-centered approaches (Ansari and Krop 2012; Christensen 2013). Further, experts attribute a fundamental impact on the financial services industry to blockchain technology as an emerging disintermediating digital innovation (Beck et al. 2016; Wright and Filippi 2015). Fintechs and blockchain represent not only threats and sources of disruption for incumbent organizations, but also opportunities for collaboration and enhancement of their innovativeness (Economist Intelligence Unit 2015). For instance, various financial services institutions have initiated cooperations with fintechs, have launched blockchain research projects, and have expedited prototypical blockchain implementations (Fridgen et al. 2018; Holotiuk et al. 2018; Kaaru 2018). 

Although the financial services industry is key to almost every economy (McKinnon 1973; Odedokun 1996; Schmitt 1974), the research has lagged behind in comprehensively analyzing the phenomenon of digitalization in the financial services industry, with a particular focus on fintechs and blockchain technology. To date, neither the cooperation patterns between incumbents and fintechs nor blockchain technology and its characteristics and applications have been thoroughly analyzed or evaluated.

In this thesis, I address this research gap by applying a multimethodological approach, structured in four research essays. Essay 1 identifies and evaluates the design parameters of bank-fintech cooperations and proposes a taxonomy for the classification of real-world cases. This scientifically validated taxonomy will allow one to strategically plan, analyze, and enter cooperations along the design dimensions and characteristics. Essay 2 examines blockchain technology and its potential to disintermediate existing structures, with a specific focus on crowdlending. Particularly, the results show that blockchain represents an alternative to existing IT infrastructures and can enable otherwise unsustainable (social) business models, mainly by replacing intermediaries. Essay 3 analyzes initial coin offerings (ICOs) as a disintermediated form of crowdfunding and identifies ICO archetypes. Further, essay 3 incorporates an in-depth analysis of the five predominant ICO archetypes: average, liberal, visionary, compliant, and native ICOs. Thus, this thesis – to my best knowledge – is the first to provide a structured analysis of ICO design parameters, ICO performance, and the influence of regulation. Essay 4 evaluates blockchain’s potential in international trade finance. The findings suggest that, while blockchain is evolving and may be widely accepted, incumbents such as banks will be required in the financial services industry, their roles and business models may change significantly.

Overall, this thesis allows the reader to better understand the phenomena of fintechs and blockchain technology; it also generates generalizable knowledge on how they affect the financial services industry. Further, I provide insights into and guidelines on how organizations in the financial services industry may respond to these emerging phenomena and may leverage their potential.