A review of intra-organizational cooperation between large traditional financial providers and FinTech Startups

1. TRANSFORMATION
OF THE FINANCIAL
INDUSTRY
#INTRA-ORGANIZATIONAL
COOPERATION
MICHAL GROMEK
RESEARCHER ON FINTECH & CROWDFUNDING
#SE.LINKEDIN.COM/IN/MGROMEK
STOCKHOLM
SCHOOL OF ECONOMICS
OCTOBER 2ND 2017 - CEMS, FINTECH
FINTECH & TRADITIONAL BANKING

2. SOURCE: MCGAHAN, !, HOW INDUSTRIES CHANGE, HBR (2004), KOHLER, T, CORPORATE ACCELERATORS: BUILDING BRIDGES
BETWEEN CORPORATIONS AND STARTUPS. 2016
"TODAY'S STARTUPS ARE A
MAJOR SOURCE OF INNOVATION (...) INVESTMENT
PRODUCTS AND REINVENT BUSINESS MODELS " (KOHLER,
2016)
THE KNOWLEDGE NECESSARY TO GENERATE INNOVATIONS
INCREASINGLY RESIDES OUTSIDE THE MODERN
CORPORATION'S BOUNDARIES (CHESBROUGH, 2003a; VON
HIPPEL, 2005)
IDENTIFYING YOUR INDUSTRY'S EVOLUTIONARY
TRAJECTORY ON THE FLY IS DIFFICULT (MCGAHAN 2004)
QUOTES FROM TODAYS READINGS:

3. INDUSTRY
TRANSFORMATION
- FINTECH IN SE
#TODAYS ROADMAP
INTRA-
ORGANISATIONAL
COOPERATION
HEAD OF
STRATEGY
11:15- 12:0009:15-09:45 09:45 - 10:15 10:20 - 11:00

4. PERSONAL
BACKGROUND
#SEVEN YEARS OF FINTECH
PAN EUROPEAN CROWDFUNDING REPORT (2015)
SWEDISH FINTECH BOOK (Q4)
STOCKHOLM FINTECH REPORT (2017)
INSTECH & REGTECH REPORT (2017)
STOCKHOLM
SCHOOL OF ECONOMICS
SECOND LEVEL KYC AML VERIFICATION - CRYPTO CURRENCIES
ROCKET INTERNET & LENDICO (C2C P2P LENDING):
SCALING, SEVEN COUNTRIES IN SEVEN MONTHS > SOLD
FUNDEDBYME: (C2B, C2C): HEAD OF INT. FINANCIAL
SERVICES

5. SOURCE: HTTPS://WWW.SLIDESHARE.NET/RUSSELLSMITH9/MISSION-DRIVEN-
MARKETING-AT-TRANSFERWISE?QID=FA061E37-7587-495B-B203-
EBB261497891&V=&B=&FROM_SEARCH=1 (ACCESSED OCTOBER 2ND)
#FINTECH EXAMPLES: (INT FINTECH)

6. STOCKHOLM
SCHOOL OF ECONOMICS
BUT DIDN'T.
WHY NONE OF THE
BANKS CREATED
EFFICIENT INT.
TRANSFERS?

7. STOCKHOLM
SCHOOL OF ECONOMICS
Incremental business model innovation
Balance between environmental and
enterprise change
Change in the environment
Misalignment
Gap between
environmental
and enterprise change
Transformational
business model
innovation
During the periods
of discontinuity
companies
will either disrupt
or be disrupted
Demise
Transformation of the
business model or demise
Degreeofchange
SOURCE: ADAPTED FROM GERRY JOHNSON, KEVAN SCHOLES, RICHARD WHITTINGTON,
EXPLORING CORPORATE STRATEGY, 7TH EDITION 2005
#INDUSTRY TRANSFORMATION
VS. BUSINESS MODEL INNOVATION

8. STOCKHOLM
SCHOOL OF ECONOMICS
Incremental business model innovation
Balance between environmental and
enterprise change
Change in the environment
Misalignment
Gap between
environmental
and enterprise change
Transformational
business model
innovation
During the periods
of discontinuity
companies
will either disrupt
or be disrupted
Transformation of the
business model or demise
Degreeofchange
SOURCE: ADAPTED FROM GERRY JOHNSON, KEVAN SCHOLES, RICHARD WHITTINGTON,
EXPLORING CORPORATE STRATEGY, 7TH EDITION 2005
#ZOOM BACK TO OUR FIRST SESSION:

9. SOURCE: JOHNSON & SCHOLES 1997
HTTPS://WWW.SLIDESHARE.NET/MICHALGROMEK
INDUSTRY
STRUCTURE
LEGAL STRCTURE
ENVIROMENT
SOCIAL AND
DEMOGRAPHIC
STRUCTURE
POLITICS AND
GOVERNMENT
TECHNOLOGY
INTERNATIONAL
/ NATIONAL ECONOMY
#WHAT TRIGGERS INDUSTRY TRANSFORMATION?

10. CHALLENGES
OF FINTECH*
REGULATION
PRIVACY
SECURITY
UNTESTED IN PERIODS OF
HIGH-INTEREST RATES,
INCREASED
RISK AND REDUCED
INVESTMENTS
STOCKHOLM
SCHOOL OF ECONOMICS
*SOURCE: ROBIN TEIGLAND, FINTECH AND TRANSFORMATION OF THE FINANCIAL
SERVICES INDUSTRY, HTTPS://WWW.SLIDESHARE.NET/ETEIGLAND/FINTECH-AND-
TRANSFORMATION-OF-THE-FINANCIAL-SERVICES-INDUSTRY/5-
WHAT_TRIGGERS_INDUSTRY_TRANSFORMATIONJOHNSON_SCHOLES
BENEFITS
OF FINTECH
BUSINESS MODEL
INNOVATION
INVENTIONS
CONVIENCE
COST EFFICIENCY
ACCESSIBILITY
SPEED
BANKS VS.
REPUTATION
ECONOMY

11. III EXAMPLES OF
GLOBAL FINTECH
VENTURES

12. SOURCE: HTTPS://WWW.MPESA.IN/PORTAL/ (ACCESSED OCTOBER 2ND)
HTTPS://WWW.SLIDESHARE.NET/MICHALGROMEK
#FINTECH EXAMPLES: (INT. MPESA - KENYA)

13. SOURCE: HTTPS://WWW.TINKAPP.COM/EN/(ACCESSED OCTOBER 2ND)
HTTPS://WWW.SLIDESHARE.NET/MICHALGROMEK
#FINTECH EXAMPLES: (SE HQ > SEB INVESTMENT

14. SOURCE: HTTP://WWW.BIMAMOBILE.COM/ABOUT-BIMA/ABOUT-US-
NEW/ (ACCESSED OCTOBER 2ND)
HTTPS://WWW.SLIDESHARE.NET/MICHALGROMEK
#FINTECH EXAMPLES: (SE HQ > EMERGING ECO.)

15. STOCKHOLM
SCHOOL OF ECONOMICS
Stockholm is second only to Silicon Valley,
in the list of regions with the
most billion dollar-valued companies
per capita
SOURCE: CHASING THE UNICORN, A STUDY OF STOCKHOLM MISTY
MEADOWS, STOCKHOLM SCHOOL OF ECONOMICS, 2016
DOWNLOAD FULL REPORT HERE

16. EUR 99+ M. (!)

17. WAKEUP CALL !
33% OF ALL LTD
INVESTMENTS FOR THE
ENTIRE COUNTRY

18. COMPLEXITY OF FINTECH
CORE FINTECH
SMALL
CORE
FINTECH
LARGE
CORE
FINTECH
REGTECH
BEHAVIOSEC
ATM, CARD
ISSUER, DEBT
COLLECTION
SERVICES FOR
FINANCIAL
COMPANIES

20. 0
10
20
30
40
50
Item 1 Item 2 Item 3 Item 4 Item 5
STOCKHOLM PATHWAY TO COMPLEX FINTECH
PAYMENTS
EQUITY
COMPLEXITY
VALUE
ROBOADVISORY
LENDING
INT. TRANSFER
WEALTH
MANAGEMENT
BLOCKCHAIN
BASED
INSTECH
REGTECH
GDPR & PSD2
BLOCKCHAIN
BEYOND
BANKING

21. STOCKHOLM FINTECH HUB
WHEN NOTHING GOES RIGHT, GO LEFT :)
SOURCE: STOCKHOLM FINTECH HUBS
OFFICIAL PRESENTATION AS OF FEBRUARY
9TH 2017

22. STOCKHOLM
SCHOOL OF ECONOMICS
Depending on the definitions
there are around 220+ FinTech
companies in the Greater
Stockholm
Area.

24. COMPARING WITH EUROPEAN FINTECH LEADERS
FINTECH INVESTMENTS IN ABSOLUTE NUMBERS IN 2016 IN M.EUR
0
125
250
375
500
London Dublin Berlin Paris Stockholm Hamburg
FINTECH INVESTMENTS IN ALL LOCATION BESIDES STOCKHOLM HAVE BEEN PROVIDED BY BOSTON CONSULTING GROUP FINTECH CONTROL TOWER AS OF JUNE 26TH 2017, REPRESENT COMPILING OF
SECONDARY DATA FROM SOURCES LIKE CB INSIGHT. VALUES FOR STOCKHOLM INCORPORATE CORE-FINTECH AND NON CORE-FINTECH DATA IN THE STOCKHOLM GREATER REGION HAVE BEEN THE
RESULTS OF OWN RESEARCH WHILE REVIEWING DIVERSE MEDIA SOURCES, PRESS RELEASES AND INVESTORS ANNOUNCEMENTS AND COOPERATION WITH NORDIC TECH LIST.
EUR 493M
EUR 112M

25. IMoney
UMoney
TRANSFORMATION CHALLANGE:
VENTURES