On the Fintech Revolution: Interpreting the Forces of Innovation, Disruption, and Transformation in Financial Services

TLDR

The financial services sector is undergoing a fintech revolution driven by emerging technologies and process disruptions, prompting firms and startups to seek new business models, enhanced customer experiences, and transformative services to improve efficiency and customer centricity. The study introduces a fintech innovation mapping framework designed to evaluate the extent of change and transformation across four key areas of financial services. The framework examines operations management and the impact of technology innovations—including payments, cryptocurrencies, blockchain, cross‑border transactions, lending, P2P platforms, social media, investments, markets, trading, risk management, and robo‑advisory—on financial services.

Abstract

The financial services industry has been experiencing the recent emergence of new technology innovations and process disruptions. The industry overall, and many fintech start-ups are looking for new pathways to successful business models, the creation of enhanced customer experience, and approaches that result in services transformation. Industry and academic observers believe this to be more of a revolution than a set of less influential changes, with financial services as a whole due for major improvements in efficiency, customer centricity, and informedness. The long-standing dominance of leading firms that are not able to figure out how to effectively hook up with the "Fintech Revolution" is at stake. We present a new fintech innovation mapping approach that enables the assessment of the extent to which there are changes and transformations in four areas of financial services. We discuss: operations management in financial services and the changes occurring; technology innovations that have begun to leverage the execution and stakeholder value associated with payments, cryptocurrencies, blockchain, and cross-border payments; multiple innovations that have affected lending and deposit services, peer-to-peer (P2P) lending, and social media use; issues with respect to investments, financial markets, trading, risk management, robo-advisory and services influenced by blockchain and fintech innovations.