Digital Business Transformation in the Banking Sector

Introduction

New concepts of fintechs have appeared and became interesting due to the reputational challenge posed to traditional banking caused by the subprime crisis. Consumers have questioned the strategy of financial industry and the impacts it has had on the world economy (Dell’Atti, Trotta, Iannuzzi, & Demaria, 2017). Fintech companies have real impacts because their technological solutions are being broadly adopted in banking or retail being blockchain a case study even for cyber security (Kshetri, 2017). Fintechs impact the traditional banking system because they challenge the existent business model and provide much more technological solutions characterized by lower prices and higher accessibility. Fintech is a fast-growing sector with high potential and may be considered a disruption on the current state of technology. Consumers are adopting these services due to their advantages which constitute solutions for the future of banking and several other industries. Nonetheless, the risks associated with this new industry should also be considered. The current risks that fintech companies pose may affect consumers, companies and the entire financial stability (KPMG, 2019) because currently fintech offer a diverse range of services which can be a plain current account but also virtual investments in fiat or digital currencies (Brochado, 2018a). The examples are the Initial Coin Offerings (ICOs) which are an alternative investment form offering the possibility of direct financing from investors worldwide (Brochado, 2018b) and contributing to the democratization of entrepreneurship and access to capital markets (Chen, 2018).

The aim of this chapter is to study fintech developments and in particular the impacts they have had in shaping traditional banking business models recently challenged (Roland Berger, 2018). This paper aims at answering the following research question: What insights does current literature offer regarding the impact of fintechs in the banking sector?

The structure of this chapter is as follows: (i) next section offers a descriptive analysis of the impact of fintechs and digital solutions in banking; (ii) the methodology describes the approach used to collect the papers under analysis and the content analysis approach; (iii) the results section includes a descriptive, narrative and semantic analysis (iv) the chapter ends with conclusions and the avenues for future research.