FINTECHS AND THE NEW WAVE OF FINANCIAL INTERMEDIARIES

Authors

Johannes Huebner, Swiss Federal Institute of Technology, ZurichFollow
Denis Vuckovac, Swiss Federal Institute of Technology, ZurichFollow
Elgar Fleisch, Swiss Federal Institute of Technology, ZurichFollow
Alexander Ilic, Swiss Federal Institute of Technology, ZurichFollow

Abstract

The financial services industry is undergoing a massive transformation similar to what was observed when other industries underwent digitization. The FinTech revolution has given rise to a vast number of technology-oriented market entrants who challenge many parts of the financial services industry. This research seeks to provide a better understanding of how FinTechs across various business functions fundamentally impact the value chain in this industry. To this end, we built on top of financial intermediation theory, and developed a taxonomy of FinTechs’ intermediating functions. The following hierarchical clustering analysis identified six archetypes of FinTech intermediaries as observed in the real world, i.e. the different ways in which FinTechs across business functions act as financial intermediaries by transforming assets, reducing transaction cost, and alleviating information asymmetries. Finally, we discuss how FinTechs impact financial intermediation in itself, and to what extent the notion of FinTechs disintermediating the financial value chain is accurate.

Recommended Citation

Huebner, Johannes; Vuckovac, Denis; Fleisch, Elgar; and Ilic, Alexander, "FINTECHS AND THE NEW WAVE OF FINANCIAL INTERMEDIARIES" (2019). PACIS 2019 Proceedings. 3.
https://aisel.aisnet.org/pacis2019/3