RSW1126-04

RSW1126-04

Fintech Set Up

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Executive summary

The latest advancements and quick expansion of new banking and finance by financial technology (Fintech) businesses has compelled financial institutions to pursue operational innovation to maintain a sustainable competitive edge in their respective industries. They are often non-financial organizations that offer cutting-edge financial services to their clients. The purpose of this paper is set up an autonomous division of a multinational bank that will compete in the disruptive Fintech revolution. From a managerial standpoint, the paper will critically assess different concepts that are essential to make the autonomous division successful.

Introduction

Fintech, a hybrid concept that integrates the words “finance” and “technology,” refers to the combination of finance with developing technologies like artificial intelligence (AI), cloud computing, big data, among other things. User-friendly financial services like mobile money services, crowdsourcing, peer-to-peer lending and borrowing, insurance, and management of wealth are made available as a result of this pairing. Rapid progress in information technology, along with the subprime crisis of 2008, produced a protracted worldwide economic slump. Because of this, governments throughout the globe are aggressively supporting the adoption of a new financial paradigm, which has led in the formation of a slew of Fintech businesses with examples of firms such as JD Finance, Kabbage, Ant Financial, LendingClub, OnDeck, and Apple Pay.

Innovation to Enhance competitiveness

New Customer Interaction

Customers’ participation in value co-creation is emphasized in the new customer interaction, which also highlights that innovation is developed via engagements between financial service providers and the consumers.

New Business Partners

The utilization of associate’s assets and resources by an organisation to create innovative services may be characterized as the creation of new business associates. The notion of co-opetition was presented by Brandenburger and Nalebuff, who underlined that firms that adopt the co-opetition method should integrate one another’s fundamental advantages while competing to establish new opportunities in order to succeed.

New Revenue Models

The development of new revenue models is concerned with the institutional changes that are required to support service innovation. To do this, an effective method to distributing objectives, sharing expenses, and generating profits must be adopted.

Technological Innovation

Financial and technological innovation are intertwined, and the use of new technologies to enhance the effectiveness of financial services while also reducing expenses and controlling risks are at the forefront of technological innovation.

To attain the aforementioned competitive initiatives, there are management aspects that ought to be enhanced such as leadership, human resource management and change management.

Leadership

Fintech technologies provide clients with tailored and interactive services, as well as having progressive-minded executives is a vital success component in achieving success. Organizations that want to take advantage of the digital disruption of financial services require executives that have a progressive attitude and foresight in order to give workable responses to new business issues and opportunities.

Human Resource Management

Emerging requirements and issues concerning the management of human resources in a technological environment have impacted practically every business, but there is a particularly pressing issue in the financial sector. The advent of FinTech pushes human resource managers to sift through the most effective strategies that would welcome innovation while still encouraging employees to strive for personal growth. Furthermore, because technology is at the heart of these organizations, human resources must stay up with contemporary Human resource management practices as well as platforms when it comes to attracting, motivating, and keeping employees. Technology development is one of the most significant new issues in human resource management.

Change management

In the financial business, change management has risen to emerge as among the most significant subjects to discuss. For some years, the market situation for banks and financial firms has been experiencing significant transformation. Organization s in the financial industry face significant problems as a result of the low interest rate environment, increased regulatory requirements, continuous digitization, and the rapid expansion of the fintech industry.

Conclusion

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