FinTech partnerships- research based analysis

Ilkka Lähteenmäki

- 20+ years in banking- Inc. 10+ years of financial research- 2011-2016 in Danske Bank

- Head of business development in PB- Head of strategy planning in FIN

- Partner in two start-ups- Since Oct. 2016 research network of FinTech- Together with the Bank of Finland and

Ministry on Finance a FinTech Institute- Ph.D. about banking development &

partnerships- 7 journal & conference publications

FinTech causation research

Financial business:- Business models- Competencies- Competition- Co-operations- Management- Customer experience- Value creation- Partnerships

Incumbents & FinTech start-upsAnalysis framework1. Time horizon2. Depth of the relationship3. Dominance4. Customer value creation

1. Time horizon

Salaries online

ATMs

Tele-banking

PC-banks

Internet banking

Mobile

60´s

70´s

80´s

90’s

2000’s

2010’s

Apps

50´s

FinTech

Screen scraping

1930 1940 1950 1960 1970 1980 1990 2000

Economic Conceptions of Competition

Emergence of Organisations: Social PerspectivesEmergence of Organisations: Economic Perspectives

Imprinting Processes

Systems Related and Theories

Strategic Choice

Transaction Cost Theory (Price and Authority)Resource Dependence - Structural Approach

Class-based ApproachesInstitutional Theory

Institutional Theory of Markets

Internal Structures and Processes: A

Organisations as Cultural MappingsInternal Structures and Processes: B

Internal Structures and Processes: CEcological Dynamics of Organisational Populations

Organisation-environment Relations: Institutional ProcessesDensity-dependent Legitimation/Competition

Networks and NichesStatus

Niche WidthResource Partitioning TheoryDiffusion of Organisational Forms

Selective Replacement of Old Forms by New Forms

Stakeholder Theory of the FirmOrganisational Learning

Theories contributing to inter-firm organisations

Bank

Environment

other firm

partnership

relation

External reasons(RDP)-uncertainty-dependency-possibility

Partnership-specific reasoning(TCE, RBV, IMP)

Industry-specific reasons-specialisation-openness-policy-approach to uncertainty

-cost based-resource based-relation based

2. Depth of the relationship

3. Dominance

Start-up dominance

Incumbent dominance

Co-operationCompetition

4. Customer value creation

Value creation spheres

False True

Value:- Value-in-production- Value-in-use- Co-creation- Service dominant logic- Customer dominant logic

APIs and open banking

Source: http://openbankproject.com/for-banks/

A few cases

Analysis

API andopen banking

3rd partyapplications

FinTech

Banking-as-a-service

Platform economy

Genericplatforms

IoT

Banking-in-a-service

DAOs

ReplacedBanking Services

Value delivery level

Conclusions• From hackathons to permanent phase• Development on the banking platform (OBP) – service on the

customer’s platform (contextual banking)• From competition to co-operation• From bank dominance to win-win• FinTech moves banking closer to customers• Why FinTech start-up• Business culture, lean, flexibility

• Hubs and institutes as FinTech networks

Thanks!