Modularization of Crowdfunding Services – Designing Disruptive Innovations in the Banking Industry

Crowdfunding represents a disruptive innovation in the banking industry by enabling the exploitation of market segments. Incumbents struggle to utilize this new phenomenon as crowdfunding is based on modules that have not been considered relevant for banking so far. Nevertheless, crowdfunding services are not entirely new compared to traditional banking. We argue that the modular design enables a bank to utilize crowdfunding. Thus, we started an action research project in order to investigate how modularization enables a bank to design crowdfunding services. Findings so far led to the identification of ten preliminary crowdfunding services and their interconnection within an ecosystem. Our expected contribution will increase the understanding of crowdfunding services by bridging research on modularization, service ecosystems, and crowdfunding, and highlight the handling of disruptive innovations in an established industry. For practice, we provide a way of designing crowdfunding services in an efficient manner while building on already existing competencies

Blueprinting Crowdfunding - Designing a Crowdfunding Service Configuration Framework

Crowdfunding gained momentum over the last few years. In contrast to traditional forms of funding, the service provision of crowdfunding platforms is performed within service systems. These comprise a complex combination of IT and non-IT services, different stakeholders, and diverging contexts and purposes. The design and operation of such service systems represents a tough challenge. Therefore, we developed a crowdfunding service configuration framework in the form of a morphological box and derived three dominant design patterns by following a design science approach. Therefore, we followed three iterations, which comprise in total twelve expert interviews, three case studies and the analysis of 161 crowdfunding platforms. The configuration framework extends research on crowdfunding and service science by providing insights in how to support the systematic design of crowdfunding service systems, reducing their complexity, and giving a comprehensive overview over their building blocks

Fintech applications on banking stability using big data of an emerging economy.

The rapid growth and development of financial technological advancement (Fintech) services and innovations have attracted the attention of scholars who are now on a quest to analyse their impact on the banking sector. This study conducts several kinds of analyses to measure the effect of the fintech era on the stability of the Chinese banking sector. It uses Big Data and performs Pearson correlation and regression analysis on the fintech era's transition period to measure the impact of several explanatory variables— institutional regulation, government stability, bank credit to deposit ratio, and economic growth— on the outcome variables, which includes Nonperforming loans (NPLs) and its numerical measurement in relation to the mean score of the Big Data (Z-score). This study uses yearly Big Data from 1995-2018 and revealed that compared to the first wave of the fintech era, the second wave helped in the reduction of NPLs and the enhancement of financial stability in China. This study concludes that in the second wave of the fintech era, the explanatory variables mentioned above had a positive impact on NPLs and banking stability. This work helps comprehend fintech development in modern society and the importance of its disruptive forces in developing and developed countries

Emerging Digital Frontiers for Service Innovation

This paper examines emerging digital frontiers for service innovation that a panel discussed at a workshop on this topic held at the 48th Annual Hawaii International Conference on System Sciences (HICSS). The speakers and participants agreed that that service systems are fundamental for service innovation and value creation. In this context, service systems are related to cognitive systems, smart service systems, and cyber-physical systems and depend on the interconnectedness among system components. The speakers and participants regarded humans as the central entity in all service systems. In addition, data, they saw personal data in particular as key to service systems. They also identified several challenges in the areas of cognitive systems, smart service systems, cyber-physical systems, and human-centered service systems. We hope this workshop report helps in some small way to cultivate the emerging service science discipline and to nurture fruitful discussions on service innovation

Is FinTech a Disruption or a New Eco-system? An Exploratory Investigation of Banks’ Response to Fintech in Australia

This research-in-progress aims at investigating what moderating effects use of Agile Software Development (ASD) methods and practices has on negative performance effects of faultlines, i.e. specific configurations of attributes in team members. Based on literature in ASD and psychology, a model of the moderating effects of ASD practices is developed and is to be assessed using a global online study. Since ASD practices shape team work and can be linked to known moderators of negative faultline effects, we expect to find moderating effects of ASD methods and practices on faultline effects. Information on the prevalence and moderation of faultline effects in ASD teams will help with a more detailed understanding of how ASD practices work and the contingencies that can inhibit or support their positive effects. Insights into group functioning in ASD settings will provide guidance on which ASD practices can help with negative team dynamics

Fintech, the new era of financial services

The research aims to fill the gap in the current academic literature regarding the appearance of innovation-focused financial technology (fintech) companies. The analysis provides a conceptual overview of the key value drivers behind fintechs, including the utilization of resource-based theories, business models, human-centered design and open innovation. The article introduces how fintechs can serve as an enabler of innovation in the incumbent financial sector and can have positive effects on the triple-bottom-line by solving the problems of people who live at the bottom-of-the-pyramid

Charting the Emerging Financial Services Ecosystem of Fintechs and Banks: Six Types of Data-Driven Business Models in the Fintech Sector

The competition and the collaboration of established banks and challenging fintechs are expected to dramatically change the financial services ecosystem. The different types and roles of fintechs as new niche players in the ecosystem are not well understood so far. However, a better understanding of these types and roles is required for incumbent as well as for new actors for defining and aligning their strategies. In this paper, we analyze the business models of 195 fintech companies with a special focus on the role of data. Based on this analysis, we present a structured overview of fintechs’ business areas as well as six data-related business model types. This paper contributes to the research on data-driven business models and business ecosystems by applying and modifying an existing approach for classifying new niche players based on the data dimension of their business models

Identifying innovation opportunities emerging from technology and business trends

PhD thesis in TechnologyBusinesses are continuously looking for opportunities to innovate. There is a gap in the literature regarding innovation models and approaches that are systematic, practical and easy to apply. This thesis addresses this issue through investigation of the potential for identifying innovation opportunities emerging from technology and business trends and of how to evaluate ideas. Technology trends depict the evolving direction of technology; can they be used to innovate products? Inspired by ideation literature, a novel model is presented which combines technology trends with product breakdown to generate product innovation ideas. The empirical evidence suggests that the model can generate quality ideas. Further investigation of technology trends indicated that the largest trend of the near future will be autonomation, which suggests that many products and services will be delivered in a totally autonomous way. Operations that can be standardized have a high likelihood of being autonomated in the near future. This is because sensor advancement has made it possible to install low-cost sensors on machines; these act as senses for the machine, and then the sensor data can be processed in digital algorithms to carry out fine-tuned decision-making for the machine. This enables a paradigm shift in how machines and applications are operated. The megatrend of electrification has dominated the past century, during which the leading inspiration for innovators was how to electrify industry, households, automobiles, etc. The inspiration for future innovation could likewise be how to autonomate the same. Anecdotal evidence supports this claim. A model and case study are presented in this regard. In a similar way to technology trends, business trends are also agents of change, revealing how businesses are evolving. The largest trend observed is servitization. Companies are gradually shifting away from the traditional model of selling just products towards selling the functionality of the products as services. The shelf life of many products has been significantly reduced, and there is stiff competition in the market. Services, on the other hand, are more sustainable. Servitization is here defined as reducing tangibility in the product. A utility-driven approach is developed, in which the products are broken down into the utility features that encourage the customer to purchase the product and barriers that prohibit the customer from purchasing the product. The model presented in the study presents options to gradually enhance utility and reduce both barriers and the overall tangibility of the product. That can assist users in transforming their products into services. Another way to servitize is to add services to a product in the form of product-service-system. Financing/ownership value added services are explored, and the changes they bring to the business model are studied. These services do not require changes to the product or technological development and can add service benefits to the product. A systematic framework is presented, in which the options can be individually evaluated, and suitable value-added service options can be selected. Another important business trend observed is outsourcing. Start-ups and high growth companies have limited resources, and they do not have the flexibility to carry out all business activities internally. Companies tend to outsource business activities, to survive with limited resources. However, sometimes outsourcing the core activities of the business can invite competition. In this thesis, a decision tree for evaluating business activities for outsourcing purposes is presented. The decision tree assists users in evaluating those activities that can be outsourced with minimal side effects for the business. Traditionally, ideas are screened based on subjective judgement after a brainstorming session. In this thesis, a systematic high-level idea screening tool is presented, which is useful for screening ideas in a short period of time. Six key parameters, which are producibility, problem size, market size, novelty, profit margin and business alignment, are pillars of the idea screening tool, compiled by assorting the idea screening literature. The tool is useful for screening the ideas generated in the aforementioned models. Together, the appended papers contribute to filling the gap in the innovation literature regarding practical guidelines to innovate businesses

DON’T SLIP ON THE ICO – A TAXONOMY FOR A BLOCKCHAIN-ENABLED FORM OF CROWDFUNDING

Blockchain is rapidly evolving and there is an increasing interest in the technology in both practice and academia. Recently, a blockchain use case called Initial Coin Offering (ICO) draws a lot of attention. ICO is a novel form of crowdfunding that utilizes blockchain tokens to allow for truly peer-to-peer investments. Although, more than 4.5 billion USD have been invested via ICOs, the phenomenon is poorly understood. Scientific research lacks a structured classification of ICOs to provide further insights into their characteristics. We bridge this gap by developing a taxonomy based on real-world ICO cases, related literature, and expert interviews. Further, we derive and discuss prevailing ICO archetypes. Our findings contribute to theory development in the field of ICOs by enriching the descriptive knowledge, identifying design options, deriving ICO archetypes, and laying the foundation for further research. Additionally, our research provides several benefits for practitioners. Our proposed taxonomy illustrates that there is no one-size-fits-all model of ICOs and might support the decision-making process of start-ups, investors and regulators. The proposed ICO archetypes indicate how common ICOs are designed and thus might serves as best practices. Finally, our analysis indicates that ICOs represent a valid alter-native to traditional crowdfunding approaches