Are incumbent banks bygones in the face of digital transformation?

Krasonikolakis, Ioannis; Tsarbopoulos, Michalis; Eng, Teck‐Yong

doi:10.1177/0306307020937883

Cited by 32 publications

(19 citation statements)

References 33 publications

(45 reference statements)

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“…Digital transformation is far from simple, certain, or predictable. Moreover, it is likely to be disruptive or transformative, with immutable impacts upon associated organisational outcomes related to technical capabilities and behaviours [18].…”

Section: Literature Reviewmentioning

confidence: 99%

Digital Transformation in Banking: A Managerial Perspective on Barriers to Change

Diener

Špaček

2021

Sustainability

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The digitalisation of banks is seen as the omnipresent challenge which the banking industry is currently facing. In this digital change process, banks are facing disruptive innovation that requires adaptation of almost all cooperative processes. Digital transformation in the financial industry is associated with obstacles that seem to hinder smooth implementation of digital approaches. This issue has not been adequately addressed in the current academic literature. The main purpose of this qualitative exploratory study is to identify the main perceived obstacles to digital transformation in both the private and commercial banking sectors from a managerial point of view and to analyse them accordingly. The methodology is based on a methodological approach using a combination of contextual interviews with German board members of banks, inductive content analysis, and the exploration of best-practice approaches. The findings revealed that elements of strategy and management, technology and regulation, customers, and employees receive a high level of attention within the digital transformation. The other main barriers can be found in the areas of market knowledge and products, employee and customer participation, and public benefit. Each main barrier is characterised by several sub-barriers of varying importance for the digital transformation of banks and is described in detail.

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Section: Literature Reviewmentioning

confidence: 99%

Digital Transformation in Banking: A Managerial Perspective on Barriers to Change

Diener

Špaček

2021

Sustainability

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“…Supporting activities are standardized through fintechs and largely demonstrate lower levels of specificity and uncertainty that allow for their outsourcing from fintechs. The resulting scope of the bank matches with the bank models of in-house developers and native digital banks that seek efficiency through fintechs (Krasonikolakis et al, 2020;Tanda and Schena, 2019). These entities improve their services and structures by adopting fintechs as complementary to traditional operations (Holotiuk et al, 2018;Kilu et al, 2019;Dorfleitner and Hornuf, 2019, p. 9;Blackstad and Allen, 2018).…”

Section: Discussionmentioning

confidence: 57%

Transforming the scope of the bank through fintechs: toward a modularized network governance

Łasak

Gancarczyk

2021

JOCM

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PurposeThe aim of this paper is to develop a theoretical framework of the transformation of the bank's scope driven by fintechs.Design/methodology/approachThe conceptual foundations for a comprehensive transformation of the bank governance through financial technologies (fintechs) are underexplored. In order to develop such foundations, the authors adopt transaction cost economics (TCE), the concepts of external enablers and a modular organizational design, as well as a systematic literature review.FindingsThe results point to three scenarios of the banks' scope, depending on the adopted technological mechanisms and related effects that change the characteristics of organizational activities, justifying new bank boundaries. The most advanced application of fintechs results in a modularized network scenario leading to the emergence of financial ecosystems.Research limitations/implicationsThe proposed micro-perspective of decisional rules in an individual organization is unique in the current literature that predominantly focuses on the banking sector at large. The identified scenarios are valuable for solid theoretical and empirical grounding and can be further exploited in decision simulations and empirical studies.Practical implicationsThe proposed theoretical framework points to the rationales and consequences of adopted technologies for the boundaries of a bank organization.Originality/valueThis paper provides three contributions to the literature on technology-driven transformations of organizations with a focus on banks. First, the authors elaborate a theoretical framework for establishing the bank's boundaries in response to the expansion of financial technologies. Second, the authors add to the knowledge accumulation in the area of organizational transformations based on the ICT adoption, in particular, to the literature on the modular organizational design. Third, the authors contribute to the decision-maker practice by proposing the alternative options of banks' scope transformed through fintechs.

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“…This transformation is supported by the adoption of new technologies from which new performance, new processes, and new business models emerge [ 25 , 26 ]. In addition, DT is not only linked to technology, but also to an improvement in the business model, collaboration, and culture [ 27 ]. This transformation arises with the use of digital tools in the daily activities and processes of the company, being subsequently achieved through its promotion inside and outside it [ 28 ].…”

Section: Conceptual Overviewmentioning

confidence: 99%