Is Norwegian Banks under Threat from TPPs?

Christine Wilhelmsen

Student thesis: Master thesis

Abstract

The bank sector is undergoing rapid transformation. A changing regulatory landscape, advancing new technologies and changing consumer attitudes are changing the field of play, paving way for a whole new set of banking services and the prevalence of financial services provided by non-banks (TPPs). The purpose of this paper is to establish the likelihood of TPPs establishing in the Norwegian market for financial services, focusing on FinTech- and BigTech companies. Through examining Norwegians attitudes towards financial services provided by non-banks, the thesis aims determine to what extent TPPs pose a threat to traditional banks.
Historically a rigid industry with high entry barriers, characterized by stability and depending firmly on the trust of their customers, the banking industry has for centuries been dominated by major banks with established names and long legacies. As banks got a lot of the blame after the financial crisis in 2008, their credibility took a blow and suffered a massive decrease in the business-critical level of trust. Additionally, bank regulation developed into a vital part of the weaponry of financial regulators against economic recessions, causing further change to sector dynamics. The paper will investigate the impact of one of the most recently implemented regulatives in the European bank sector, namely PSD2 from 2019. The PSD2 regulation drastically impacts the financial eco-system and dynamics between banks and TPPs. Adding even more fuel to the fire, in terms of spurring change in the sector, new technologies are revolutionizing the way the financial industry operates, creating entirely new business propositions and shaping customer expectations.
The paper employs a quantitative method for reviewing empirical and theoretical literature about the financial services sector and its transformation in the direction of becoming more digitalized and less dominated by the traditional banks. The paper identifies and examines three key drivers behind this dynamic, namely the implementation of PSD2, the rise of FinTech- and BigTech companies, and changes in consumer attitudes. A sample of 109 respondents to an online survey created for the purpose of examining Norwegian consumers attitudes towards TPPs supplements existing literature, as there is little prior research form the Norwegian market. The study shows Norwegian consumers are negative towards utilizing financial services provided by TPPs and reluctant to adopt these services.

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages97