The banking sector vs FinTech companies

The banking sector vs FinTech companies

Theoratical Framework Report

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Name: Wytse Lucas van der Wal

Student ID number: 000477499

Course Title: Bachelor of Arts (Hons) in Business Management & Bachelor of business administration in New Business

Educational Program(s): BBA New Business | Bachelor of Arts (Hons) in Business

Management (Double Degree)

Educational Institutions: Nyenrode New Business School | University of Westminster

Email: wvanderwal@my.nyenrode.nl

Supervisor: Rick Molenaar

Table of Contents

Introduction        3

Background and Relevance        3

Management Issue        3

Research Objective        3

Initial Questions        4

Literature review        5

Fintech Firms        5

Financial sector in the Netherlands        5

Fintech Firms in the banking sector.        5

Five types of responses of the bank.        7

Consumer behavior towards FinTech        8

‘Service quality, customer satisfaction, customer trust and loyalty in an e-banking context’,        10

Final Questions:        10

Research Objective        10

Research Question        10

Management Question        10

Sub-Research Questions        10

Conceptual Model        10

Target Group        11

Research Methodology        11

Initial Research Methodology        11

Actual Methodology        11

Self-evaluation        12

Timetable        12

Bibliography        12

Introduction

This paragraph shows what the scope and purpose of the research is. It contains the reasons why this research is done. It states the management issue, research objective and the research question and sub questions that are needed for this research.

Background and Relevance

“FinTech is not only an enabler but the driving engine” Pierre Gramegna, Minister of Finance, Government of the Grand-Duchy of Luxembourg

In the last decades the banking sector has changed a lot. These changes are detonated with the introduction of the internet. People are shifting from physical money to digital money, saving books are now online, repayments are done with applications like “Tikkie”.  The internet made these shifts possible (Bons et al., 2012). The internet with the mobile technology created a whole new landscape for the financial sector. The banks we used to know are likely to be different or even disappear in the future. Without innovating to the new environment, they cannot keep up with the rapid changes in the financial sector. In this new landscape there are new possibilities for companies outside of the classic financial sector, like FinTech companies. FinTech companies are disrupting the traditional banking sector in a whole new way. They are revolutionizing the financial industry (Goldstein et al., 2019).

FinTech, the name already explains, it is a combination of “Technology” and “Finance”. The activities of fintech started with money transfers, mobile banking and crowdfunding evolving in even more like the blockchain, Artificial Intelligence and cryptocurrencies. Start-up firms raised from the demand form the customers they wanted more personalized, safe and secure innovations. FinTech was the solution to all these demands because the demand couldn’t be supplied by the traditional banks (Goldstein et al., 2019).

Management Issue

The main issue of this research is the changing environment of the banking sector and what the influence of FinTech is in these changes.

Research Objective

The aim of this research is to investigate to what extent new financial technology is affecting the financial markets, specifically the banking sector. This research aims to clarify how fintech is affecting the banking sector in the Netherlands. Show what the effects of these new technologies are and how fast things can change. With this research I want to show how the banking sector is changing.

Drivers of change within the banking industry present themselves in terms of non-bank, primarily technology-driven companies. These new market entrants described as “FinTech” firms are capturing market share through disruptive technologies, new regulations provide opportunities for FinTech companies. Can the bank change to this new landscape and hold their loyal customers?

Initial Questions

I want to investigate the real reason behind all the changes the sector is facing. I want to see if the new technologies that are available now a days is are forcing banks to make a change.

To what extend does new technology influence the performance of banks in the Netherlands?

To answer this research question there are some sub questions that needs to be answered. The first question is about how much the banking sector already implements new technologies, to understand if they already have a R&D department and how much they invest in it. The second sub question is about how they adapt to new technologies that are continuous coming. How fast can they respond to new things that are coming. The last question is doe people trust new technologies more than the banks. Are people willing to trust a computer or do they still trust people that work at banks.

To what extend does the banking sector already implement their own new technologies?

When does the banking sector adapt to new technology?

Do people trust new technologies in the financial sector?

Literature review  

This section is about the summary and the conclusions of the critical literature review. It involves different journal articles that show theories and models that I use to give my opinion for this subject. With these articles that are published by institutions and experts I can create my conceptual model linked to the theory.

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