Fintech: The impact of B2B financial software vendors on the banking industry

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School of Business | Bachelor's thesis
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Degree programme
Tieto- ja palvelujohtaminen
Fintech refers to financial technology, which competes with traditional banking by technological innovations such as cryptocurrencies, peer to peer lending, blockchain, artificial intelligence, cloud computing or big data. There is a lot of discussion about Fintechs: how they are disrupting the banking industry, the impact they have on bank stability and regulation and of course the future of the relationship between banks and Fintechs. There have been great innovations by Fintechs which have made banking easier for customers like mobile payments but also some challenges like the regulation of P2P lending platforms. In this thesis I will be investigating the impact B2B financial software vendors have had on the traditional banking industry. By B2B financial software vendors I am referring to software companies that are offering a solution as financial software or service for banks. These solutions can be categorized as being related to core banking, asset and liability management, treasury, payments, risk management, credit and lending or loan processing. This thesis aims to answer its research questions through a literature review and findings from three distinct interviews with professionals from the Fintech industry. It will discuss the history and future of financial software vendors as well as the positive and negative impact the vendors have had on the traditional banking sector. In addition, there will be an analysis of the co-operation and synergy between these two parties. This thesis will be filling the research gap inside the Fintech industry regarding B2B financial software companies. Since there has not been a lot of research within the B2B financial software sector or the impact these companies have had on the traditional banking sector, this research aims to contribute considerably to the field of research. Moreover, this research gives insight regarding the topic from the financial software vendors’ perspective, which makes this study important from a managerial and theoretical point of view. The result of this research concludes that B2B financial software vendors have principally had a positive impact on the banking industry. There have been plenty of technological advances and new innovations in the financial software sector which have advanced the traditional banking sector. However, the core business of banking or the way financial software vendors operate have not changed in the past 20 years. Finally, this thesis argues that co-operation between financial software vendors and traditional banks is inevitable in the future.
Thesis advisor
Seppälä, Tomi
Fintech, financial software vendor, regtech, traditional banks, banking sector
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