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How Do Banks Interact with Fintechs?
Report

How Do Banks Interact with Fintechs?

Forms of Alliances and their Impact on Bank Value

Lars Hornuf, Milan F. Klus, Todor S. Lohwasser and Armin Schwienbacher
CESifo Group Munich, 2018
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Editorial Rating

7

Qualities

  • Analytical
  • Overview
  • For Experts

Recommendation

The growing presence of fintech is forcing banks to rethink their business models. Banks are allying themselves with technology providers in varying arrangements to improve financial products, operating efficiencies or both. According to academics Lars Hornuf, Milan F. Klus, Todor S. Lohwasser and Armin Schwienbacher, the pace of modernization has consequences for each party in a technology collaboration. getAbstract recommends this timely analysis of the banking industry’s digital transition to financial professionals.

Take-Aways

  • Banks are approaching digital business through alliances with fintech companies. 
  • Financial tie-ups are more likely between large banks and fintechs. Partnership with an established bank affords a fintech greater access to customers, the ability to deal with regulatory constraints and enhanced brand awareness.
  • The most common alliance centers on product development, wherein the bank relies on the fintech for digital innovations. 

About the Authors

Lars Hornuf is a finance professor at the University of Bremen. Milan F. Klus and Todor S. Lohwasser are research associates at the University of Münster. Armin Schwienbacher is a finance professor at Université Lille.

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