From Digital Technologies to New Economics in Banking

Abstract

In recent years, the conceptualization of the banking business has radically changed. Deregulation and digitalization were developing their impacts in the market, some of their effects resulted in the growing evolution and diffusion of digital platforms business models, where networks are bringing in the industry more participants and business opportunities. The digital vortex is the inevitable movement of industries toward a digital center in which business models, offerings and value chains are digitized to the maximum extent possible, also creating new disruptions, and blurring the lines between industries and this has paved the way to reduce bank’s centrality into every day’s consumer life. Under these circumstances, traditional banking has lost significance vis-à-vis other forms of financial intermediation and counterparts (namely FinTechs, BigTechs). The aim of this chapter is twofold. On the one hand, it gives some highlights on the future organization of the banking industry among the many hype storm words emerging in the market (digitalization, FinTechs, open banking, embedded finance, banking-as-a-service, decentralized finance, etc.) that are getting a twisted picture of the digital banking industry. On the other hand, by linking the dots, this chapter is going to outline the most interesting implications for both the industry and those banks that have decided to undertake a deep changing strategic transformation.