Nurturing a FinTech Ecosystem: The Case of a Youth Microloan Startup in China

Financial technology, or FinTech, involves the design and delivery of financial products and services through technology. It impacts financial institutions, regulators, customers, and merchants across a wide range of industries. Pervasive digital technologies are challenging the fundamentals of the highly regulated financial sector, leading to the emergence of non-traditional payment systems, peer-to-peer money exchanges and increased turbulence in currency markets. This case study explores the development of a FinTech company in China that offers microloans to college students. Five lessons learned are presented for organizations to better manage the challenges and to leverage the opportunities amidst the disruption of financial sector. Our findings also shed light on how digital technology 1) offers the strategic capability for a firm to occupy a market niche in financial sector, 2) enables the generation of alternative credit scores based on non-traditional data, and 3) improves the financial inclusion of previously excluded market segments.