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FinTech, an Emerging Industry

An Explorative Study of Business Model Innovation on FinTech Companies in Sweden

Written by P. Arouche, B. Balaj

Paper category

Master Thesis


Business Administration>Finance




Master Thesis: The fintech financial services industry has undergone significant changes in the past few decades (Buchak, Matvos, Piskorski and Seru, 2018; Gomber et al., 2017). In recent years, the rapid development of Internet services has had a profound impact on the financial industry (Shim & shin, 2016). These continuous evolutions and changes have brought new business models and opportunities for companies in the financial services industry (Gomber et al., 2017) ). In addition, this means that “physical” designers have turned to online intermediaries that are not included in traditional banking supervision (Buchak et al., 2018). The evolution of new financial products, financial companies, and all forms of customer interfaces and back-office processes are derived from the term "financial technology", and the term "financial technology" is derived from the two words "finance" and "technology". The term is a combination of words used to explain the collective concept of Internet-related technologies (Arner et al., 2015; Gomber et al., 2017). In addition, so far, there is no clue to the consensus meaning of the term (Nicoletti, 2017; Verga, 2017; Schueffel, 2016). On the contrary, the term fintech has been applied to different business environments. In addition, Gomber et al. (2017) claimed that the term refers to innovators and disruptors in the financial services industry who use the Internet and the accessibility of universal communications for automated information processing. In addition, Sironi (2016) defines fintech as a global phenomenon, a “born” at the intersection between technology providers and financial companies. In addition, Schueffel (2016) believes that in order to be able to provide new financial solutions for the financial services industry and consumer finance market, it must go through a process. In order to understand the revolution of the basic concept of the term fintech, Arner et al. (2015) Divide the revolution into three different evolutionary eras. The first evolutionary era was between 1866 and 1987. The industry is still analog. This era is called FinTech 1.0. However, in more developed countries, the financial services industry has become globalized and highly digitalized. The rise of analog to digital services started in 1987 and continued until 2008 (Roeder et al., 2018). The provision of financial products and services in this era must go through the traditional regulatory financial sector. The second evolutionary era is the development of traditional digital financial services, characterized by financial technology 2.0. The last era of fintech development began in 2008 and is described as the period when new start-ups enter the market. 2.2 Construction of business models In the past few decades, the conceptual understanding of business models has increased (Teece, 2010). The term "business model" was first used by Bellman et al. (1957) and appeared more than fifty years ago (Osterwalder et al., 2005). Since then, business models have been used in various business process models along with information technology (Wirtz et al., 2016). In addition, the term was first notorious for being used in the context of the Internet in the 1990s (Osterwalder et al., 2005). The business model can be used as a basic model to promote the development of enterprises, and can further affect the failure or success of venture capital. In any case, researchers have limited attention to business models, and existing research mainly focuses on Internet-based models. In addition, the published research is descriptive, discussing new and potential models as conditional changes, observing standard models, and examining different methods applicable to model construction (Morris, Schindehutte, and Allen, 2005). However, there is no consensus on the definition of the business model. In addition, as a concept in economic and business literature, there is a lack of conceptual understanding of business models. (Morris et al., 2005; Shafer et al., 2005; Osterwalder et al., 2005). Generally speaking, a business model as a concept is a complex phenomenon that requires different researchers to define differently in order to understand all the components of the business model. Osterwalder (2004) summarized his understanding of the conceptual business model by consulting the existing literature, and explained that the term business is combined with the model to form a conceptual business model. To emphasize this understanding, the author used the online version of the Cambridge Lean Dictionary (Cambridge, 2003). It turns out that business and model are two separate terms-business: the work you do to get money through the activity of buying and selling goods or services. -Model: A representation of something, a description of what may be an object used in calculations. When these two terms are combined, the conceptual understanding of the definition is easier to understand. In addition, the author claims that the term business model is “the expression of how a company buys and sells goods and services and how to make money” (Osterwald, 2004, p. 14). The business model is seen as an abstract representation of internal logic. Companies, which means how companies generate and make money by providing goods and services. (Osterwald, 2004). In addition, the business model is used to generate revenue for the company (Seddon, Lewis, Freeman and Shanks, 2004) Read Less