Strategizing for Financial Technology Platforms: Findings from Four Russian Case Studies

Abstract

This article studies the business strategy of digital financial platforms and creation of ecosystems. The authors assume the general methodological approach of grounded theory to study four cases of financial technology platforms from Russia; the sample represents companies focusing both on solutions for the front end (consumers) and back end (middle of the value chain). The research finds that the top executives of the companies, which create and operate the digital platforms, have an approach to business strategy that is significantly different from that of the traditional business. They defy the pragmatism of predicting the market development and planning the company's actions in accordance with such predictions. Strategic paradigm of these companies is based on the notions of inclusivity, dynamism, and reliance on independent participants of a business ecosystem. Though a radical departure from the traditional business strategy, such an approach has brought demonstrable business success across the time span of a decade. The idea of "platform-ecosystem" can also be fruitful as a tool of solving important socioeconomic issues such as financial inclusion in the emerging markets.

Fintech investments in European banks: a hybrid IT2 fuzzy multidimensional decision-making approach

“…Some researchers have also discussed the impact of Fintech on customer satisfaction. Kabakova et al (2016) analyzed Fintech development in Russia illustrating that it is a significant issue in customer satisfaction. In addition, Komulainen et al (2018) applied an interview methodology to analyze the impact of Fintech investments on supply chain management.…”

“…value (C3)Eyal (2017),Zhou et al (2018),Sun (2018) andChang et al (2017) Non-financial (Dimension 2) Customer satisfaction (C4)Kabakova et al (2016),Komulainen et al (2018),Xu and Cheng (2017),Yao et al (2018a, b),Mittal et al (2017) andTan et al (2018) …”

Review of studies on digital transaction platforms in marketing journals

“…Micro-level studies on digital transaction platforms focus on understanding questions such as the customer profiles of users of C2C platforms (Saarijärvi, Joensuu, Rintamäki and Yrjölä, 2018), business strategies of digital transaction platforms (Kabakova, Plaksenkov and Korovkin 2016), attitudes towards digital transaction platforms (Lacan and Desmet 2017), and topics such as information asymmetry (Caldieraro et al 2018), signaling (Jiang, Jerath and Srinivasan 2011), marketing budgeting (Sridhar et al 2011), and customer orientation (Chakravarty, Kumar and Grewal 2014). Studies such as Kaushik et al (2018), Thakur (2018) and Zhang, Luo and Li (2012) focus on the social aspects of digital transaction platforms, online reviews, and study their effect on sales performance, customer engagement and their reliability as an indicator of seller quality, respectively.…”

Network Effects at Retail Payments Market: Evidence From Russian Merchants

“…On the other hand, the higher interest in cashless payments by merchants in a particular region may produce the positive spillovers, which may be exploited by the financial services organizations aimed at acceptance increase. For instance, payment systems regularly conduct educational and marketing events aimed at explaining the benefits of cashless payments acceptance (Kabakova, Plaksenkov, & Korovkin, 2016;Krivosheya, Korolev & Plaksenkov, 2015). Such events and initiatives may change the perception of the merchants and increase the value of benefits by decreasing the amount of misinformation and other informational or behavioral biases (Bayero, 2015;Bolt & Mester, 2017;Kabakova, Plaksenkov, & Korovkin, 2016;Malphrus, 2009), thereby increasing the probability of cashless payments acceptance.…”

“…For instance, payment systems regularly conduct educational and marketing events aimed at explaining the benefits of cashless payments acceptance (Kabakova, Plaksenkov, & Korovkin, 2016;Krivosheya, Korolev & Plaksenkov, 2015). Such events and initiatives may change the perception of the merchants and increase the value of benefits by decreasing the amount of misinformation and other informational or behavioral biases (Bayero, 2015;Bolt & Mester, 2017;Kabakova, Plaksenkov, & Korovkin, 2016;Malphrus, 2009), thereby increasing the probability of cashless payments acceptance. Besides, regional governments or branches of financial services may subsidize the acceptance in case merchants show increased interest in cashless payments (Block & Keller, 2015;Chizhikova, 2013;Rauch & Schleicher, 2015).…”