The theoretical and conceptual frameworks expound on the revolution of fintech to the banking sector globally but specifically in the UK, where the research focuses. To understand the dynamics of this revolution, the conceptual and theoretical framework analyzes the impact of technology on the critical infrastructure of the traditional banking system and its transformation to this sector both positively and negatively within the realm of the financial industry. According to Bernard and Campbell-Verduyn (2019), the significance of the existing infrastructures or personnel in understanding the technological change in global finance was necessary for the success of fintech. The authors argue that the technology operates within a complex infrastructural arrangement comprising digital and physical components. Infrastructural knowledge is crucial in fintech innovation, which helps ensure a seamless flow of transactions and information across borders in the global space. Also, the interplay between technological innovation and infrastructures is essential in understanding how fintech impacts the banking sector by setting new financial parameters and possibilities.
Furthermore, Langley and Leyshon (2020) expound on this discussion by examining the platform from a political economy aspect. Fintech, just like the traditional banking infrastructure, acts as a market custodian through the facilitation of transactions, ensuring that the market is going well and robust within the realistic frameworks within this financial model (Langley & Leyshon, 2020). Through capitalizing on the network and data effects, the platforms positively influence the financial ecosystem since they reshape the necessity of the framework dynamics of regulation and competition (Langley & Leyshon, 2022). In addition, with the planarization of the finance process then, fintech introduces some challenges and opportunities that require the re-evaluation of the rules within the market structures in the global financial space.
Also, the authors suggest that building on this framework does explore the neo-colonial dimension of the fintech platforms not just in the UK but in Africa. This puts it as a bad thing with the optics from the international space showing that the UK and their financial might and power cannot resolve this issue through fairness within which they can be treated in the economic process (Langley & Leyshon, 2023). With technology, financial inclusion is expected to be realistic, but the regulations are often made to favor only a specific part of the global economy. By examining the regulatory responses to fintech platforms in the UK and comparing them to other markets like China, the authors show the tensions on the regulatory objectives and the platform interests within these markets in the long term. This can be the negative effect of regulatory platforms and objectives in showing the competing imperatives of stability, consumer protection, and innovation.
Contextual literature review
Within the contextual literature review, the focus would be on the evolution of fintech and how the dynamics of the financial market dynamics, regulations and general technology shaped ity. Navaretti et al. (2018) interrogate the relationship between traditional baking and fintech, questioning their love-hate relationship. The authors argue that the fintech poses a disruptive threat to the incumbent banks, which also presents a collaborative opportunity for partnership with the integration ecosystem. This relationship between banking and fintech technology shows the adaptive responses to traditional technological change, which helps ensure the technology is robust.
Also, Ng et al. (2022) add to this discourse by expounding on the strategic options available for fintech platforms within the banking industry through an overview of the research objectives focusing on the evolution of fintech and their possible benefits and challenges. Some of the strategic choices, especially for choosing fintech firms, include using global-like payment gateways that ensure the UK financial system is diverse. It can cut across markets to make it more reliable. The authors also shed light on the competitive nature of the fintech landscape, with the implications being on the incumbent banks and how this process can be done in the long term.
Moreover, according to Vives (2019), the digital disruption that unfolded in the banking sector was both positive and negative. For instance, the author argues that digital technologies reshaped the competitive dynamics of the banking sector, blurred traditional boundaries, and redefined value chains. Also, digital disruption necessitated strategic responses from the banks, which include investment technologies like quants and organizations restructuring their personnel and taking on more technologically sophisticated financial analysis on their staff to complement this new technology. Furthermore, fintech technologies also necessitated a customer-centric innovation process that ensured that businesses focused on consumer needs more.
Another analysis of the planarization of fintech services by Woods et al. (2023) shows the evolution of financial services in Singapore. The government plays a huge role in ensuring that these processes are done with the prospect of having the best outcomes for financial services. This shows that the process has a good effect on how well the financial institutions work with the new technology and has a ripple effect on the overall economy (Bernards & Campbell-Verduyn, 2019). The Singaporean experience shows the interplay between state intervention, technological innovation, and market dynamics since this ensures that the technology is more widespread and also disseminated to the people who transact daily and are able to access these finances in the long term.
The literature review shows both possible negative and positive effects of fintech on the banking industry in the UK. Drawing on empirical research and theoretical frameworks, the review provides a comprehensive breakdown that shows the challenges and opportunities that have emerged during the fintech revolution. The adaptive and regulatory strategies are responses that the UK banking sector initiated to ensure that they kept up with the new dynamics, customer needs, and evolving technology that necessitated the overall change.
References
Bernards, N., & Campbell-Verduyn, M. (2019). Understanding technological change in global finance through infrastructures. Review of International Political Economy, 26(5), 773–789. https://doi.org/10.1080/09692290.2019.1625420
Langley, P., & Leyshon, A. (2020). The Platform Political Economy of FinTech: Reintermediation, Consolidation and Capitalisation. New Political Economy, 26(3), 1–13. https://doi.org/10.1080/13563467.2020.1766432
Langley, P., & Leyshon, A. (2022). Neo-colonial credit: FinTech platforms in Africa. Journal of Cultural Economy, 15(4), 1–15. https://doi.org/10.1080/17530350.2022.2028652
Langley, P., & Leyshon, A. (2023). FinTech platform regulation: regulating with/against platforms in the UK and China. Cambridge Journal of Regions, Economy, and Society. https://doi.org/10.1093/cjres/rsad005
Navaretti, G. B., Calzolari, G., Mansilla-Fernandez, J. M., & Pozzolo, A. F. (2018, January 10). Fintech and Banking. Friends or Foes? Papers.ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3099337
Ng, E., Tan, B., Sun, Y., & Meng, T. (2022). The strategic options of fintech platforms: An overview and research agenda. Information Systems Journal, 33(2). https://doi.org/10.1111/isj.12388
Vives, X. (2019). Digital Disruption in Banking. Annual Review of Financial Economics, 11(1), 243–272. https://doi.org/10.1146/annurev-financial-100719-120854
Woods, O., Bunnell, T., & Kong, L. (2023). The state-led platformisation of financial services: Frictionless ecosystems and an expansive logic of “smartness” in Singapore. Geoforum, 146, 103849–103849. https://doi.org/10.1016/j.geoforum.2023.103849
write