FinTechs
The use of technology to deliver a financial solution is known as “FinTech” (Puschmann, 2017). FinTech is a technology-based financial product and/or service that is developed with new technology (Leong et al., 2017). Fintechs promise to reshape the industry by cutting costs and increasing the quality of service delivery. As such, FinTech businesses have to design business models that are both reasonably priced and highly cost-effective (Lee & Shin, 2018). There are a number of financial solutions offered by FinTechs such as cryptocurrency-based payment services, financing, and loans, insurance, and customer interaction (Skan et al., 2016; Alt et al., 2018).
During the global financial crisis, confidence in the banking system took a significant hit. A series of breakdowns occurred in the financial sector's processes and operations (Olanrewaju, 2016). This all came to a head during the crisis, which was followed by a surge in regulation related to greater transparency in financial institutions and more robust protections for consumers (Alt & Puschmann, 2012). Despite tougher regulations after the crisis, there are some initiatives that lower entry barriers for new FinTech companies (Puschmann, 2017). The creation of FinTech in 2008 and new developments in mobile devices, changing customer behaviour, and the development of e-finance all occurred simultaneously (Alt & Puschmann, 2012; Lee & Shin, 2018). Customer mobility coupled with the availability of digital financial services empowers customers to manage their finances anywhere and anytime (Alt et al., 2018).
In particular, the investment sector has grown in prominence in the years since. That is equivalent to US $22.3 billion of new investment in global FinTech in 2015, according to Skan et al. (2016). The authors go on to state that a large rise in FinTech start-ups is attributed to a low barrier to entry, vast amounts of understanding of customer needs, and dynamic teams full of talent (Skan et al., 2016). Yet while the digitalisation of the financial services industry has been researched extensively, FinTech start-ups have only just started to appear and are scarce (Puschmann, 2017; Gimpel et al., 2018).