The evolution of market orientation in Finnish retail banking – from regulation to value creation

Nätti, Satu; Lähteenmäki, Ilkka

doi:10.1080/17449359.2016.1141689

Cited by 8 publications

(11 citation statements)

References 32 publications

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“…This situation created a belief among managers that customers and customer relationships could be managed according to previously developed practices. Increasingly, however, digitalization, macro economy and banking regulations, competitors, and not to mention customer behaviour and demographics, challenge established views and operations (e.g., Lähteenmäki and Nätti, 2013;Lundberg, Öhman and Sjödin, 2014;Durkin, Mulholland and McCartan, 2015;Ruotsila, Ekdahl and Vitali, 2015;Ruefenacht, Schlager, Maas and Puustinen, 2015;Stamenkov and Dika, 2015;Nätti and Lähteenmäki, 2016). For example, a recent review of challenges for Nordic retail banking notes that 'banks across the Nordic region have been unsuccessful when it comes to addressing transformational marketplace forces .…”

Section: Introductionmentioning

confidence: 99%

Digitalization challenging institutional logics

Holmlund

Strandvik

Lähteenmäki

2017

JSTP

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The study explores the mental models of top executive team members in a selected retail bank. The focus is on how each executive team member makes sense of the market situation and changes with regard to customers and customer-bank interactions in the current situation where earlier bank practices are at risk of becoming obsolete. Design/methodology/approach. All members in the executive team were interviewed individually in August 2014 on how they reason about challenges in the service business. The study uses an abductive research approach. Findings. The mental models were largely dominated by internal bank issues, and adjusting the services to changing customer preferences was considered a main challenge. The research analysis showed that the executive team members identified the same business challenges, but their interpretations of the meanings and implications of the challenges were different. Mental models tend to be hidden and stable and are seldom explicitly elaborated. There was a distinct spread in mental models in terms of content. Limited focus was on customers as the starting point for business development and renewal. Research limitations/implications. The study was conducted in the retail banking setting, which is currently affected by many changes. The study, however, was limited to executive members in one bank. Practical implications. The foremost implications of this study relate to sensitising executive members and teams to their mental models and exposing different core challenges related to customers and customer relationships in the retail banking sector. Originality/value. The value of the study is it sheds light on top executives' prospective sensemaking of current business challenges by addressing individual mental models. The study represents a novel approach in the strategic service management literature.

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Section: Introductionmentioning

confidence: 99%

Digitalization challenging institutional logics

Holmlund

Strandvik

Lähteenmäki

2017

JSTP

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“…The key to the market-oriented mental model was found to be the managers' focus on customers. Against this view, the previous studies have shown that the banking managers' focus is on business development and streamlining banks' operations (Camarero, 2007;Holmlund et al, 2017;Nätti & Lähteenmäki, 2016). This contradiction is alarming from the MO perspective.…”

Section: Discussionmentioning

confidence: 99%

“…Five interviewees explicitly mentioned the senior management's attitude toward change as an important antecedent of MO during digital transformation. In line with Nätti and Lähteenmäki (2016) who find that the long period of regulation has made banking managers more risk averse, multiple interviewees of this study considered that the risk aversion is a dominant characteristic among the banking executives. Overall, our data suggested that the senior management in the banking industry is more risk 296 32 ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS oriented than market oriented.…”

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confidence: 82%

“…The dominant business models in the banking sector seem to streamline banks' operations and extend their business rather than try to meet customers' needs (Camarero, 2007;Nätti & Lähteenmäki, 2016). However, the new market dynamics require banks to shift their focus from developing internal banking processes to creating valuable interactions with customers (Holmlund, Strandvik, & Lähteenmäki, 2017).…”

Section: Introductionmentioning

confidence: 99%

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Antecedents of Market Orientation in The Banking Sector During Its Digital Transformation

Haapio

Karjaluoto

Mero

2019

Humanizing Technology for a Sustainable Society

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Firms are under increasing pressure to remain relevant for their customers and need to rethink how to remain market-oriented in the digital age. This is evident in the banking sector where the traditional banks are gradually being challenged by digital native competitors and growing customer demands. Consequently, this study examines what it takes to be market oriented in the banking sector at the age of increasing digitalization. Specifically, we focus on developing the theory on the antecedents of MO and examine how banks can regain market orientation under changing market conditions. Although Market Orientation (MO) has been a widely studied concept that has been applied in numerous different contexts, the role of digitalization as the transformer of MO is not well understood. The main findings of this study indicate market orientation at the digital age is manifested as the firm's ability to offer seamless and valuable customer experience across all service channels. Realizing this ideal necessitates a low organizational structure, managerial understanding of data and technology usage, interdepartmental management of external partnerships, as well as a managerial mindset that is genuinely concerned about customer needs.

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“…We are looking at this within the context of Fintech, as we think it presents a prime example of how technology allows innovationcreating large-scale impacts for users-and how this is not done by a single organization but by larger groups of entities through their innovation relationships. In addition, we have studied the service innovation of Fintech startups [21], and we have explored the Fintech ecosystem [26], as well as retail banking (for example, see [18]), which has given us insights into the transformation taking place and the data sources available for explorative studies.…”

Section: Methodsmentioning

confidence: 99%

Innovation Relationships in the Emergence of Fintech Ecosystems

Still¹,

Lähteenmäki²,

Seppänen³

2019

Proceedings of the Annual Hawaii International Conference on System Sciences

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This paper explores the emergence of ecosystems in the context of Fintechs infusing digital technology into financial services. The rapid rise of Fintechs has changed the business landscape, challenging the established firms with novel solutions and services. As a result, the established firms are turning to new models of cooperation, replacing the hierarchically managed value chains with ecosystems that are modular and decentralized in their architecture. First, a bibliometric analysis was conducted to present the content and relationships in Fintech research in general. Then, a case study on two of the biggest retail banks in Finland and their innovation relationships in developing Distributed Ledger Technologies and related services was conducted. The results show how established players have established multiple innovation relationships, in different ecosystems as well as between them. These can be seen to demonstrate the emergence of Fintech ecosystems. The study contributes to previous literature by making the linkages explicit, particularly by examining the contextual elements that are crucial enablers or hindering factors in such relationships.

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The evolution of market orientation in Finnish retail banking – from regulation to value creation

Cited by 8 publications

References 32 publications

Digitalization challenging institutional logics

Digitalization challenging institutional logics

Antecedents of Market Orientation in The Banking Sector During Its Digital Transformation

Innovation Relationships in the Emergence of Fintech Ecosystems

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