The Vertical Disintegration of the Nordic Financial Industry: An Ecosystem Perspective on FinTech’s influence on the Nordic Financial Industry

Abstract

In coherence with the developments of society in general, the financial industry has been significantly influenced by the elements and trends of the digitalization. Equivalent to many other aspects of life, consumer behavior in financial services has successively moved towards digital and mobile channels. A high degree of these modernized processes and solutions have been developed and provided by FinTech actors. This has caused the prior, traditional and monopolized financial industry, to be revolutionized by a dramatic increase of actors and new technology invading the industry to swiftly grab market share from the incumbents. By applying an ecosystem lens, the purpose of this study is to investigate more specifically how FinTech has affected the financial industry in the Nordics. The ecosystem allows the researchers to utilize a holistic approach to understand the general and considerable factors in which FinTechs have influenced the Nordic market.
By adopting an interpretivist research philosophy and an inductive approach, the research was able to explore the topic of interest through the experiences and views of the participants and their respective organizations. The qualitative case study examines the Nordic financial industry by applying a mono-method research and conducting six semi-structured interviews with industry experts from both FinTechs and traditional financial institutions. The data is analyzed by thematic analysis to identify patterns which are refined to themes and dimensions, corresponding to elements of change which have had an impact on the industry.
The thematic analysis established the fundamentals of the data structure model, which subsequently was conceptualized to the change process model of how the Nordic financial industry has developed into an ecosystem. By applying adaptive and responsive product development to develop digital technologies and generate new value, FinTechs have established new standards of consumer demand. The customer need for increased digital touchpoints and enhanced transparency have provoked the decentralization of financial services. The vertical disintegration of the financial industry has initiated a shift in how to regard competition and collaboration. In the network-based Nordic financial ecosystem of today, participants are beginning to partner to capitalize on the mutual benefits of value co-creation.