A Literature Review on Digital Transformation in the Financial Service Industry

It is often stated that IT is able to transform entire industries. The emergence of digital technologies enables, among other things, new business models and therefore, obviously constitutes an industry transformation potential. However, IS research that actually deals with digitally enabled industry transformation is still rare. Motivated by its IT intensive nature, the research focus of this paper lies within the financial service industry. Prior research that deals with individual units or sectors is synthesized with the aim to draw inference on the financial service industry. The identified research articles are categorized into business, customer and technology relationship. The results include that digital technologies enables new business models, cause (dis)intermediation and customer centricity becomes increasingly important for financial service providers. Additionally, the interaction between user and technology changes and information is increasingly digitized. Finally, possible future research questions are named

TRANSFORMATION TOWARDS CUSTOMER-ORIENTED SERVICE ARCHITECTURES IN THE FINANCIAL INDUSTRY

The financial industry is in midst of a global transformation. Drivers for this are changes in customer behaviour, disruptive power of information technology and changes in the industry structure itself. These developments have the potential to shift the financial industry towards a customer-oriented financial market infrastructure and force banks to become more customer-oriented. The research presented here applies an integrated approach on service-oriented architectures (SOA) which combines a business and technological view on services and thus contributes to the emerging field of service science. The paper develops a customer-oriented service architecture model for banks and analyzes the impact of future banking sales and distribution by a quantitative survey. Data was collected from 25 banks in the German-speaking area. The empirical results of hypotheses testing indicate that banks have only started to restructure their existing architectures, but will not be customer-oriented in 2015. However, first tendencies show that banks concentrate on the extension of core competencies in e-channels to better and more cost efficiently serve their customers. Nevertheless, the developments planned until 2015 neglect necessary enhancements of banks` service architectures such as the inte-gration of value added services from external service providers or the centralization of processes in all customer-facing services

Four Shades of Customer: How Value Flows in Fintech Ecosystems

The financial sector is undergoing a massive transformation, with new technology-driven players challenging established mechanisms and transforming the sector into a fast-moving market. With the gradual transition from a scale economy to a platform-driven network economy, enterprise networks are gaining strategic importance. Despite the growing interest in fintech’s, research has so far lacked a conceptualization of value creation in fintech ecosystems. Therefore, this research paper aims to analyze key players, value creation activities, and value streams based on the analysis of the business models of payment services, personal financial management, robo-advisory, peer-to-peer lending, trading, and cryptocurrency. We present a holistic value network for the fintech ecosystem based on structured literature review and analysis of 171 fintech companies. We were able to show that fintech platform orchestrates multiple market sides and that customers take four distinct roles at the center of the ecosystem when using fintech services

The Role of Congruity And Rejection Sensitivity

Goncalves, A. R., Meira, A. B., Shuqair, S., & Pinto, D. C. (2023). Artificial Intelligence (AI) in Fintech Decisions: The Role of Congruity And Rejection Sensitivity. International Journal of Bank Marketing. https://doi.org/10.1108/IJBM-07-2022-0295 --- This work received partial support from national funds through FCT (Fundação para a Ciência e a Tecnologia), under the projects - UIDB/04152/2020 - DSAIPA/DS/0113/2019 - Centro de Investigação em Gestão de Informação (MagIC)/NOVA IMS project.Purpose - The digital revolution has changed consumer–service provider interaction, spawning a new generation of FinTech. This paper analyzes consumers' reactions to Artificial Intelligence (AI) (vs. human) decisions. Design/methodology/approach – We tested our predictions by conducting two experimental studies with FinTech consumers (n=503). Findings – The results reveal that consumers' responses to AI (vs. human) credit decisions depend on the type of credit product. For personal loans, the rejection by an AI provider triggers higher levels of satisfaction compared to a credit analyst. This effect is explained via the perceived role congruity. In addition, the findings reveal that consumers' rejection sensitivity determines how they perceive financial services role congruity. Originality/value – To the best of the authors' knowledge, this research is the first to jointly examine AI (vs. human) credit decisions in FinTech and role congruity, extending prior research in the field.authorsversionepub_ahead_of_prin

Digital Transformation of Primarily Physical Industries - Exploring the Impact of Digital Trends on Business Models of Automobile Manufacturers

The phenomenon of digital transformation received some attention in previous literature concerning industries such as media, entertainment and publishing. However, there is a lack of understanding about digital transformation of primarily physical industries, whose products cannot be completely digitized, e.g., automotive industry. We conducted a rigorous content analysis of substantial secondary data from industry magazines aiming to generate insights to this phenomenon in the automotive industry. We examined the impact of major digital trends on dominant business models. Our findings indicate that trends related to social media, mobile, big data and cloud computing are driving automobile manufactures to extend, revise, terminate, and create business models. By doing so, they contribute to the constitution of a digital layer upon the physical mobility infrastructure. Despite its strong foundation in the physical world, the industry is undergoing important structural changes due to the ongoing digitalization of consumer lives and business

e-Business challenges and directions: important themes from the first ICE-B workshop

A three-day asynchronous, interactive workshop was held at ICE-B’10 in Piraeus, Greece in July of 2010. This event captured conference themes for e-Business challenges and directions across four subject areas: a) e-Business applications and models, b) enterprise engineering, c) mobility, d) business collaboration and e-Services, and e) technology platforms. Quality Function Deployment (QFD) methods were used to gather, organize and evaluate themes and their ratings. This paper summarizes the most important themes rated by participants: a) Since technology is becoming more economic and social in nature, more agile and context-based application develop methods are needed. b) Enterprise engineering approaches are needed to support the design of systems that can evolve with changing stakeholder needs. c) The digital native groundswell requires changes to business models, operations, and systems to support Prosumers. d) Intelligence and interoperability are needed to address Prosumer activity and their highly customized product purchases. e) Technology platforms must rapidly and correctly adapt, provide widespread offerings and scale appropriately, in the context of changing situational contexts

The Value to the Organization of an Adaptive Approach to a Technologically Disruptive Environment

The purpose of this Capstone is to explore the possible roles Information Technology (IT) could play in the success of the organization as it transforms into a workplace capable of adapting to the disruptive nature of digital technology. This is accomplished by identifying the positive value to the organization provided by digital technology and social business tools; describing the disruptive nature of this new technology and the tools associated with it and its impact on the organization-as-a-whole; presenting some of the tensions and possibly evolving paradigm shifts within the organization as a result of the disruptive nature of digital technology and social business tools; evaluating predominant near-term operational models being considered by IT leadership and their responsiveness to this disruptive technology environment; and recommending a course of action that will provide an organization with the necessary tools required for continuously adapting to the uncontrollable and disruptive nature presented by the heavily digital technological environment that will most likely persist throughout the first quarter of this 21st century

The rise of customer-oriented banking: electronic markets are paving the way

The banking industry has been a pioneer in adopting electronic markets with exchanges, clearinghouses, and multilateral trading facilities having become the backbone of today’s globally integrated financial transactions. While most banks use the services of these electronic markets to handle interbank processes, they still strive for bilateral relations in the field of customer-facing processes. This position paper argues that the financial crises, the changing behavior of customers, upcoming innovations based on information technology (IT) and financial services offered by non-banks are strong drivers towards more customer-orientation in the financial industry. A large variety of banking IT innovations has emerged and illustrates that traditional banks are expected to have less power to impede competition at the customer interface and in consequence need to re-position themselves. Building on these developments on the one hand and existing electronic market infrastructures in the banking industry on the other, the concept of a customer-oriented financial market infrastructure is proposed as a possible future solution. The impact is illustrated using a competitive analysis of the banking industry and analogies to the media industry where new entrants from the computing industry have caused disruptive changes. Besides describing the threat to existing banks, the position paper also discusses the perspectives for banks