Sustaining the current or pursuing the new: incumbent digital transformation strategies in the financial service industry

Abstract

Digital transformation (DT) is a major challenge for traditional companies. Despite the term, DT is relatively new; its substance is not: a whole stream of research has examined the relationship between DT and firm performance with contradictory findings. Most of these studies have chosen a linear correlational approach, however, did not analyze the holistic interplay of DT dimensions, leading to firm performance. This applies especially to the mature financial services industry and the future perspectives of traditional financial service providers (FSP). Hence, it remains an open question for both research and practice what DT configurations have a positive impact on firm performance. Against this background, the aim of this exploratory study is to examine how DT dimensions are systemically connected to firm performance of incumbent FSP. Drawing on a qualitative-empirical research approach with case data from 83 FSP, we identify digital configurations along different levels of firm performance. Our findings suggest an evolution of digital configurations of FSP, leading to five empirical standard types from which only one managed to establish a profound basis of DT.

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Digital transformation challenges in sustainable financial service systems using novel interval-valued Pythagorean fuzzy double normalization-based multiple aggregation approach

“…Those companies that succeed in the provision of quality services for their customers are considered the companies with a great opportunity for gaining success in such a competitive market. In modern societies, banks and insurance firms typically provide financial services (Dehnert, 2020 ). Both above-noted sectors share a number of functional similarities, which involves the risk transformation function.…”

“…Practitioners mention a disruptive change that is able to lower the significance of conventional financial service providers. This has been recently exemplified by (Dehnert, 2020 ), who focused on future industry perspectives in regard to profitability measures. The study of (Chiorazzo et al, 2018 ) was concentrated on the digital transformation of incumbent financial service providers that had three criteria: high market power, revenue streams from conventional services, and physical branches (Chiorazzo et al, 2018 ).…”

Skills and competencies for digital transformation – a critical analysis in the context of robotic process automation

“…Digital transformation is probably one of the biggest challenges for traditional companies, affecting all business functions, procedures, processes, operations, services and products (Bouncken et al , 2019; Dehnert, 2020). According to Verhoef et al (2021), digital transformation comprises several aspects and facets, which can be illustrated as follows: External drivers of digital transformation: digital technologies, digital competition and digital customer behavior; Phases of digital transformation: digitization, digitalization and digital transformation; and Strategic imperatives of digital transformation: digital resources, organizational structure, growth strategy, metrics and goals. …”