Sustainability, Digital Transformation and Fintech: The New Challenges of the Banking Industry

In the current competitive scenario, the banking industry must contend with multiple challenges tied to regulations, legacy systems, disruptive models/technologies, new competitors, and a restive customer base, while simultaneously pursuing new strategies for sustainable growth. Banking institutions that can address these emerging challenges and opportunities to effectively balance long-term goals with short-term performance pressures could be aptly rewarded. This book comprises a selection of papers addressing some of these relevant issues concerning the current challenges and opportunities for international banking institutions. Papers in this collection focus on the digital transformation of the banking industry and its effect on sustainability, the emergence of new competitors such as FinTech companies, the role of mobile banking in the industry, the connections between sustainability and financial performance, and other general sustainability and corporate social responsibility (CSR) topics related to the banking industry. The book is a Special Issue of the MDPI journal Sustainability, which has been sponsored by the Santander Financial Institute (SANFI), a Spanish research and training institution created as a collaboration between Santander Bank and the University of Cantabria. SANFI works to identify, develop, support, and promote knowledge, study, talent, and innovation in the financial sector

Contemporary Research on Business and Management

This book contains selected papers presented at the 4th International Seminar of Contemporary Research on Business and Management (ISCRBM 2020), which was organized by the Alliance of Indonesian Master of Management Program (APMMI) and held in Surubaya, Indonesia, 25-27 November 2020. It was hosted by the Master of Management Program Indonesia University and co-hosts Airlangga University, Sriwijaya University, Trunojoyo University of Madura, and Telkom University, and supported by Telkom Indonesia and Triputra. The seminar aimed to provide a forum for leading scholars, academics, researchers, and practitioners in business and management area to reflect on current issues, challenges and opportunities, and to share the latest innovative research and best practice. This seminar brought together participants to exchange ideas on the future development of management disciplines: human resources, marketing, operations, finance, strategic management and entrepreneurship

How does a data strategy enable customer value? The case of FinTechs and traditional banks under the open finance framework

The coupling of data and digital innovation opens the way for new business in the financial services sector, where customers are placed at the centre of decisions and data can help to develop customer knowledge. To carry out our research, we adopted a multi-case study approach to explore how a data strategy is developed in the retail banking industry, together with its relationship with customer value, paying particular attention to the heterogeneity between traditional banks and financial technology companies (FinTechs). Two main points emerged from the study. Firstly, there are three possible approaches to Open Finance, which are mainly defined by their different corporate cultures, organisational configurations, technological architecture and data value. Secondly, it is not enough to be a FinTech to be best placed to exploit the market, as some traditional banks share the FinTechs' approach to Open Finance. Designing new tailored products, customising their prices and offering them over the right channels through targeted communication are all data-driven initiatives that stem from cross- or up-selling potential, core to the retail banking industry for turning a customer into a cash flow, thus enabling value to be created for customers. Our findings additionally revealed that there is a form of external information asymmetry between the customer and the bank, and that there is also an internal asymmetry between bank departments, as their visibility on information about the same customer may differ

Contemporary Research on Management and Business

This book contains 74 selected papers presented at the 5th International Seminar of Contemporary Research on Business and Management (ISCRBM 2021), which was organized by the Alliance of Indonesian Master of Management Program (APMMI) and held in Jakarta, Indonesia on 18 December 2021. This online conference was hosted by the Master of Management Program of Indonesia University. This year, ISCRBM focused on research related to driving sustainable business through innovation. Business has had to deal with the Covid-19 pandemic, so a new approach towards managing business to survive competition is indispensable. Innovation is the key for all organizations in surviving in the new normal and beyond. The Seminar aimed to provide a forum for leading scholars, academics, researchers, and practitioners in the business and management area to reflect on the issues, challenges and opportunities, and to share the latest innovative research and best practices. This seminar brought together participants to exchange ideas on the future development of management disciplines: human resource, marketing, operation, finance, strategic management and entrepreneurship

Digital Financial Services and Strategic Financial Management: Financial Services Firms and Microenterprises in African Markets

This study highlights the impact of digital financial services as enhancing the capacity of development goals as well as social sustainability. The selected emerging markets are Ghanaian financial service providers (FSP)s and microenterprise customers (CME)s, where we examine how “Ubuntu”, an African philosophy of humanism, legitimizes spaces for a more democratic, egalitarian, and ethical engagement of human beings. This study adopts a grounded theory methodology for investigation of the phenomena with a sample size of 70 relationship managers. The findings further existing sustainability literature pertaining to social sustainability and consumer wellbeing. We contribute to theory by presenting a psychological perspective which be leveraged for digital financial services branding to expand usage within communal systems. This leverage of Ubuntu becomes especially relevant when there is the need to compensate for deficits in weak business infrastructures in low-income but expanding markets. Our study highlights digital financial services can be used to improve the emotional and psychological consumer wellbeing and to strengthen business relationships, meeting joint goals of market share expansion, brand image enhancement and profitability. This perspective also contributes to social sustainability on a global scale since the Western world depends on quality products from emerging markets

Alignment of the firm business model in the digitization process : path dependence and reconfiguration at the case of banking business models

The present paper analyses the impact of digitization on business models in the banking industry. With this analysis the study aims to answer the question: How are banks digitizing their business models and what are the roles of path dependencies and ambidexterity in the digitization process of business models? As this study reveals, the banking industry in particular is of relevance to the discussion of digitization since it must reconfigure their business model to changing customer needs in the new digital environment and reinvent their role in the disrupted ecosystem. Banks must drive the digital innovation agenda by linking up with FinTechs and technology providers, as well as cooperate with each other to sustain their competitive position and share costs. Finally, banks have to go beyond traditional innovation strategies by not only restructuring legacy infrastructures from the ground up but by reinventing their organisations with viable organisational structures and core technological capabilities. In order to come to these conclusions, developing a digital business model framework has been one element of the extant research in order to provide a holistic assessment tool on how digitization impacts a company’s business model. The literature review of 80 academic and management articles revealed that the BMI and digitization theory is rather fragmented and that further theoretical streams like path dependence and ambidexterity needed to be investigated to answer the research question. Lastly, banking experts where interviewed to test the developed framework and to gather industry data for which limited empirical evidence exists.Esta tese analisa o impacto da digitalização em modelos de negócio na indústria bancaria. Este estudo pretende responder à seguinte pergunta: Como estão os bancos a digitalizar os seus modelos de negócio e quais são os papéis da dependência e da ambidestria no processo de digitalização dos modelos de negócio? A indústria bancaria torna-se relevante de estudo no processo da digitalização pois deve reconfigurar o seu modelo de negócio devido a mudanças nas preferências dos consumidores neste novo ambiente digital e reinventar o seu papel num novo ecossistema. Os bancos devem entrar na era digital através de ligações com empresas tecnológico-financeiras e provedoras de tecnologia, e estabelecer parcerias com cada uma para mantar uma posição competitiva e partilhar custos. Devem ainda não só restruturar infra-estruturas desde baixo até cima mas também aplicar estruturas organizacionais viáveis e capacidades tecnológicas core. Estas conclusões derivam de vasta pesquisa académica em como construir uma estrutura de modelo de negocio e assim poder fornecer uma ferramenta holística que quantifique em quanto a digitalização impacta os componentes do modelo de negocio de cada empresa. A análise de 80 trabalhos académicos e artigos de gestão revelaram que inovação nos modelos de negócio e a teoria da digitalização é bastante fragmentada e que outras teorias como a dependência de caminhos e a ambidestria precisam de ser investigadas para responder à questão de investigação. Por último, foram entrevistados especialistas bancários para testar a estrutura desenvolvida e para colectar dados da indústria para cada evidência empírica existente

How financial technologies are revolutionizing the financial industry

JEL Classification: G18, G21Financial technologies (fintech) have known an incredible exposure over the last years, attracting investments of large billions of dollars. Fintech can be seen as the match between finance and technology and they are imposing a way of thinking in all the branches of the financial industry. The main aim of this dissertation is to study how the financial technologies are revolutionizing the financial industry. After the financial crisis of 2008, customers have changed their ways of seeing “Finance” and, more particularly, “Banks”, looking for products and services responding to their needs. Moreover, the financial crisis has highlighted a relevant number of dysfunctions of the banking sector and on the financial regulation. Regulators have strengthened their requirements for banks, particularly in their relations with clients. These have opened a breach for Fintech companies and they are using it. Fintech companies rely on a different value proposition to clients that is based on a timesaving, fast and clear experience. Indeed they are proposing majors innovation in products and also in the processes. Fintech companies have put the customer back at the center of all their attention; customer becomes again the top priority. Financial technologies have already revolutionized the finance industry even if their impact on the market, for the moment may still be seen as trivial.As tecnologias financeiras (Fintech) têm conhecido uma crescente exposição desde há vários anos, atraindo o investimento de largos milhões de dólares. As Fintech podem ser vistas como o casamento entre finanças e tecnologia e estão a obrigar a repensar todos os ramos da indústria financeira. O principal objetivo desta dissertação é estudar como as tecnologias financeiras estão a revolucionar a indústria financeira. Após a crise financeira de 2008, os clientes mudaram a sua maneira de olhar para as "Finanças" e, mais particularmente, para os "Bancos", na procura de produtos e serviços que respondam às suas necessidades. Além disso, a crise financeira colocou a descoberto um número relevante de disfunções do sector bancário e na regulação financeira. Os reguladores aumentaram as suas exigências para com os bancos, particularmente nas suas relações com os clientes. Tudo isto criou um conjunto de oportunidades para as empresas fintech que estas aproveitaram . Estas empresas assentam fintech numa proposta de valor diferente para os clientes, que assenta numa experiência de economia de tempo, rápida e clara. Na verdade, propõem um conjunto de inovações importantes não apenas em produtos mas também nos processos. As empresas fintech voltaram a colocar o cliente no centro das atenções. O cliente volta a ser a principal prioridade. As tecnologias financeiras revolucionaram a indústria financeira ainda que, neste momento, o seu impacto no mercado possa ainda ser visto como algo trivial

DESIGNING FOR TRUST: Futures of Digital Financial Experiences Beyond the Smartphone Era

The amount a customer trusts a product is a major indicator of product success. Trust is a core component of overall customer experience, but it is poorly defined, rarely measured, and never explicitly designed for. This masters research project explores how customers develop trust with new digital products broadly, and uncovers what organizations can do to develop more trust with their customers in the short term. This masters research project set out to answer two questions: “How might organizations design for trust?” and “How might customers trust digital financial products in the future?” A design thinking approach was used to develop this work which presents a novel Trust Adoption Cycle (TAC) model. The TAC model describes how trust can be demonstrated to customers and when to demonstrate it to them. A 2x2 scenario matrix foresight technique is used to develop four unique visions of how personal financial services might feel to customers in the future. In these speculative future scenarios, the different ways in which customers develop trust with financial providers is considered The key findings are relevant for digital financial industry leaders who are interested in launching widely adopted digital products that maximize long-term customer value. They are: 1) customer trust is developed as a result of demonstrating trustworthiness in a specific cycle, starting with integrity, then competence, and then reliability, and 2) in the future, this cycle by which customers develop trust in the product is developed may change depending on the degree to which customers want to be engaged in their financial decision-making

International expansion plan of Softfinança to the United States of America

The following document answers where SoftFinança (SF), a Portuguese software development company, should expand its product, “SoftPayments”. With Covid-19 increasing adoption of digital financing, many may assume that most global markets could provide the company with immense opportunities. However, to truly identify a suitable market, the report conducts an internal and market assessment to understand the firm’s current situation and potential. With this information, a joint venture expansion into Luxemburg was identified as having the highest potential for SF, while a marketing analysis found that targeting affluent families would lead to the highest returns. The individual work project aims first to comprehend the literature behind the “International Market Selection”, taking into considerations the different methods followed by companies. Then, analyzing in depth the United States’ market allows to decide if it would be a good fit for SoftFinança’s internationalization. The country is firstly examined through a general point of view while going specifically afterward with considerations about possible contacts and organizations to deal with during the expansion and a description of both the competition and the company and the market’s sales potential. Finally, recommendations for the best entry mode are provided

Perspektif Baru dalam Teori Kualitas Pelayanan: Pentingnya Intensi Studi pada Perusahaan Fintech di Indonesia

The development of fintech-based companies has become one of the issues in the challenges of globalization. Research that has questioned this strategic issue has not answered why fintech companies manage consumers. This research tries to offer a new perspective in managing consumers in fintech companies. By introducing Intention theory which was first presented as marketing ‘output’ this research offered the intention as a moderator of the relationship of knowledge to service quality obtained by consumers in fintech companies. The conclusion of this study is that the quality of services obtained by consumers can increase along with the strengthening of consumer intentions in using a fintech service or product. Keywords: service quality, knowledge, intentio