REDEFINING THE MARKET POSITION OF BANKS IN THE AGE OF FINTECH AND BIG TECH

Abstract

Abstract – This research uses a literature review approach focusing on the Resource-Based View theory to explore how traditional banks adapt to fintech and big tech advancements, including the challenges they face and the opportunities that arise from collaborations. The study analyzes existing academic and industry literature, identifying trends and insights on the strategies employed by banks to adapt to the changing landscape. The findings reveal that traditional banks are embracing digital transformation, collaborating with fintech and big tech players, focusing on customer-centricity, and utilizing advanced data analytics. Banks are redefining their market position in the fintech and big tech age, leveraging their unique resources and capabilities as identified through the Resource-Based View framework. They face challenges from non-bank fintech and big tech companies, which have unique advantages that banks cannot easily replicate. Fintech firms benefit from being less regulated than banks, allowing them to challenge banks for specific products. However, they cannot replace banks entirely. Big tech firms, on the other hand, present a much stronger challenge to established banks, particularly in consumer finance and loans to small firms. Digitalizing financial activities has led to a more concentrated banking industry, with smaller and less tech-savvy banks struggling to survive. The study concludes that the banking industry is fundamentally transforming, with technology-driven initiatives and partnerships presenting opportunities. However, challenges of regulatory compliance, data security, and customer expectations need to be addressed.

 Keywords:  bank, big tech, customer-centricity, digital transformation, fintech.