The strategic options of fintech platforms: An overview and research agenda

Abstract

The failure rate of fintech platforms is disproportionately high, which may be because (1) there is a lack of published knowledge on the appropriate strategies to adopt and/or (2) the traditional prescriptions for strategy may be less relevant in the context of fintech platforms. To ascertain either or both of these possibilities, we conducted a comprehensive review of the fintech literature and found that not only is there a relative paucity of research on Fintech Strategies, but there are also important limitations associated with the existing works. To address these limitations, we first identified the unique characteristics of fintech platforms and the strategic implications of those characteristics. Next, we adapted a framework made up of six conventional core logics of strategy and juxtaposed the prescriptions of those logics with the unique characteristics identified. Finally, we constructed a research agenda consisting of a number of open questions based on our analysis to provide directions for future research in this area. The agenda suggests that fintech platform strategies have to account for competing institutional logics stemming from the platforms' dual identity and the tensions between conforming for legitimacy and differentiating for competitive advantage. There is also a need to account for an exceptionally dynamic and unpredictable regulatory landscape, as well as the responses and competitive actions of influential market incumbents.

Moving away from trading on the margins: Economic empowerment of informal businesses through FinTech

“…Senyo & Osabutey, 2020; Koomson et al, 2022Taewoo et al, 2022Belanche et al, 2019 Impact Financial inclusion, people's welfare, empowerment, digital financialisation, platform surveillance, datafication, and information capitalism Micro and meso level analysis (e.g., Individual users, and MNOs) Kikulwe et al, 2014;N'dri & Kakinaka, 2020;Senyo et al, 2021Jain & Gabor, 2020Lagna & Ravishankat 2021;Mann, 2017;Taylor & Broeders, 2015 Studies in the design/innovation research stream focus on the innovation process of FinTech. These studies demonstrate how meso level actors-organisational level players such as FinTech firms, banks, and MNOs-develop and offer FinTech innovations as well as reframe financial service ecosystems (Muthukannan et al, 2020;Ng et al, 2022). Meso level actors, especially those in global south countries, determine which services are delivered through mobile money and prescribe how the technology is intended and used.…”

“…Studies in the design/innovation research stream focus on the innovation process of FinTech. These studies demonstrate how meso‐level actors—organisational level players such as FinTech firms, banks, and MNOs—develop and offer FinTech innovations as well as reframe financial service ecosystems (Muthukannan et al, 2020; Ng et al, 2022). Meso‐level actors, especially those in global south countries, determine which services are delivered through mobile money and prescribe how the technology is intended and used.…”

“…Subsequently, there is a need for change in informal and formal structures, which are rooted in ideologies that may stifle empowerment. In the case of mobile money and FinTech more broadly, it is well documented that the technology can expand opportunities for large businesses and start‐ups (Leong et al, 2022; Ng et al, 2022; Senyo et al, 2022). However, despite the many informal businesses, there is very little research on them and likewise, few FinTech and mobile money initiatives are directed at them.…”

“…This in turn has spurred enthusiasm from practitioners and scholars around how mobile money can help address financial exclusion (Friedline et al, 2019). Prior research on mobile money, including from the domain of information and communication technology for development (ICT4D), provides an understanding of antecedents to adoption by individuals (Adaba et al, 2019; Amoah et al, 2020; Finau et al, 2016; Senyo & Osabutey, 2020), the process of developing and shaping innovation (Foster & Heeks, 2013; Oborn et al, 2019) and on the emergence and practices of new actors in the FinTech landscape (Gozman et al, 2018; Ng et al, 2022; Senyo et al, 2022). However, there remains a lack of theoretical understanding of how mobile money contributes to outcomes such as economic empowerment.…”

“…This is important because, even though there is a body of evidence that argues mobile money improves financial inclusion for many individuals (Amoah et al, 2020; World Bank, 2018), we do not know if this translates into new business opportunities and positive outcomes for informal businesses. Likewise, studies that focus on FinTech and technology start‐ups (Leong et al, 2022; Ng et al, 2022) or even other small firms (Canhoto et al, 2021) are undertaken in contexts distinguished from the conditions of informal economies.…”