Competition and Cooperation in Fintech: An Exploratory Study of Danish Incumbent Banks' Innovative Efforts in Fintech

Magnus Blicker Larsen

Student thesis: Master thesis


As the amount of fintech startups increase, incumbent banks are pressured to innovate in order to avoid losing market share. The aim of this thesis is to determine how and why incumbent banks innovate in fintech, as well as the challenges they face when innovating. In order to do so, a theoretical framework is constructed which identifies six different innovation models. The analysis is divided into two phases: In the first phase of the analysis, a complete overview of all fintech innovations that Danish incumbent banks have been involved in is presented. Furthermore, each innovation is categorized based on the theoretical framework. In the second phase, semi-structured interviews with three Danish incumbent banks are used to explore the objectives and challenges associated with the different innovation models. By synthesizing the data from the two phases of the analysis with the existing literature on the topic, the three following tendencies are identified: First, incumbent banks fail to properly articulate the objectives of the innovations models they use to innovate in fintech. Second, the incumbent banks have transitioned from employing closed innovation to employing open innovation. Finally, it is identified that the incumbent banks are cooperating with fintech startups, as it is an effective way of converting the threat that the startups propose into an opportunity. In combination, these findings allow us to answer how and why incumbent banks innovate in fintech. The exploratory and qualitative nature of this paper limits the generalizability of the findings. As such, the author proposes that future research use other methodological approaches to conduct further research on the aforementioned tendencies.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
Publication date2020
Number of pages90