Financial technology and business model innovation: A study of UK banking
Business model innovation is increasingly seen as an imperative by many traditional organisations, if they are to be resilient in a time of rapid technological change. This thesis addresses the approaches to business model innovation employed by a traditional UK bank to enable it to adapt and stay competitive within the financial technology (FinTech) ecosystem. The qualitative research presented here aims to provide a substantial and meaningful contribution to the literature on financial technology and business model innovation. This is accomplished by extending the theory of dynamic capabilities in order to provide a better understanding of business model innovation in a traditional bank and across the FinTech ecosystem. The thesis also aims to show the wider implications of this research for traditional organisations in any industry, and the mechanisms that are necessary in order for them to adapt and stay competitive in their own dynamic digital ecosystems. The thesis presents a body of empirical research, using data obtained from multiple semi-structured interviews with executives and senior managers of a case study organisation (a large traditional UK bank), alongside multiple semi-structured interviews with key stakeholders in the FinTech ecosystem and focus groups comprised of individual end-users. Twelve key stakeholders of the ecosystem are identified and a thematic analysis of the data set reveals two main themes underlying the bank’s approach to business model innovation: leveraging existing capabilities and experimenting with new capabilities. These two themes are supported by four key capabilities which are present within the traditional bank and which can also be obtained through engagement with other key stakeholders within the wider FinTech ecosystem: customer centricity, data analytics, talent management, and leadership mindset. Overall, the research findings of this thesis argue that, in order to adapt and stay competitive in the dynamic FinTech ecosystem, the traditional bank in the case study is innovating its business models through a simultaneous ambidextrous approach: while leveraging its existing capabilities, the bank is experimenting with new capabilities, drawing upon the interconnected and symbiotic relationships among the twelve key stakeholders in the ecosystem. The implications of these findings, both for the banking sector and more generally, for other organisations in dynamic and rapidly changing environments, are discussed along with possible directions for further research.
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