Abstract
FinTech (financial technology) is asserted as a disruptive paradigm with digital technologies driving authentic innovation within the financial services industry. Much attention and hyperbole has been attributed to startup FinTech developers and the potential of applications for consumers of financial products and financial markets. Substantial emphasis has been given to the perceived vulnerabilities of industry incumbents facing disruption from technology-enabled platforms (‘BigTechs’) and entrepreneurial start-ups. However, institutional incumbents command large market franchises and possess deep financial and technical resources. Incumbents also have most to gain from leveraging FinTech developments. As the financial services industry is saturated with information systems, innovative technologies which have the potential to re-configure industry markets and institutional logics, inevitably confront regulatory boundaries. Given intense competition for technological advantage, strategic and corporate activity closely follows FinTech development. This article examines FinTech within Australia’s financial services sector and offshore. It provides a stringent scientific definition of the FinTech phenomenon, addressing a lacuna within the extant research. Recognising that disruptive FinTech deepens the financial services industry’s core intermediation function, it presents a taxonomy for readily locating innovations within the industry’s value chain, and assessing their transformational potential (and thus, systemic impact). Focusing upon the incumbent’s perspective, this article examines three collaboration strategies using exploratory case studies, to show how Australian financial institutions incorporate and appropriate FinTech innovations. The article discusses insights and suggestions for further research directions relevant to academics, industry participants, and policymakers.
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