Impact of Technology and Regulation on Financial Services: Opportunities and Challenges for the Banking Sector
Sharma, Pankaj (2019)
Sharma, Pankaj
2019
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2019120424624
https://urn.fi/URN:NBN:fi:amk-2019120424624
Tiivistelmä
The aim of this thesis is to understand both the opportunities as well as the challenges that the financial industry, specifically banks are facing due to technological and regulatory changes and to provide recommendations on future strategies. Banks are often hesitant to be the early adopters of technology, but with the world becoming more digital day by day, they need to embrace the change which Fintechs and challenger banks have so far been good at. This study focuses on how banks can do more than just fulfill compliance requirements and instead utilize technology and also partner with Fintechs to offer a broader range of services to their customers.
The thesis begins by exploring whether Fintechs and banks currently consider each other as partners or competitors. Second, the thesis outlines the major regulatory changes and analyz-es their impact on the banking sector. Generally, when regulation and compliance changes are linked with banks, they are usually looked at from the point of view of cost. The thesis looks into how regulation changes can also be looked at from the point of view of opportuni-ty by using the available technology and being faster to market. The thesis applies the induc-tive method where primary qualitative data is collected via interviews. A list of questions regarding technology and regulation were discussed with experts from the banking and Fintech domain.
The study can be useful for both traditional banks and other players planning to provide new services. In conclusion, the study suggests that banks needs to look beyond regulation and imagine how data can be utilized and expand their service scope by acquiring or funding Fintechs to bring agility in solution and service delivery. As banks already have the needed infrastructure, one of the options is to focus on becoming a PaaS or IaaS on which others can provide the services. One of the challenges banks need to face is the entry of the technologi-cal giants who have the potential to expand, and to compete banks need to collaborate with partners, look at other source of revenue by utilizing their infrastructure and data assets and finally provide services which customers desire and enhance their experience.
The thesis begins by exploring whether Fintechs and banks currently consider each other as partners or competitors. Second, the thesis outlines the major regulatory changes and analyz-es their impact on the banking sector. Generally, when regulation and compliance changes are linked with banks, they are usually looked at from the point of view of cost. The thesis looks into how regulation changes can also be looked at from the point of view of opportuni-ty by using the available technology and being faster to market. The thesis applies the induc-tive method where primary qualitative data is collected via interviews. A list of questions regarding technology and regulation were discussed with experts from the banking and Fintech domain.
The study can be useful for both traditional banks and other players planning to provide new services. In conclusion, the study suggests that banks needs to look beyond regulation and imagine how data can be utilized and expand their service scope by acquiring or funding Fintechs to bring agility in solution and service delivery. As banks already have the needed infrastructure, one of the options is to focus on becoming a PaaS or IaaS on which others can provide the services. One of the challenges banks need to face is the entry of the technologi-cal giants who have the potential to expand, and to compete banks need to collaborate with partners, look at other source of revenue by utilizing their infrastructure and data assets and finally provide services which customers desire and enhance their experience.