Fintech and the Changing Competitive Environment of Retail Finance: A Study on the Development of a Cross-Functional and Cross-Sectoral Financial Regulatory System

Abstract

The evolution of technology is drastically changing the conventional wisdom and the competitive environment of companies, but this does not mean that there is a logical necessity for advanced financial technology to benefit only fintech companies and platformers. Whether or not financial technology (fintech) would have a destructive influence on the incumbent financial institutions is a highly controversial issue. This paper examines the changes in the competitive environment that fintech would bring to the Indian megabank groups (HDFC Bank, SBI, and ICICI Bank) with the deliberations of the group in mind. The study found that capital and business alliances with fintech companies are more prominent than the development of their financial technology and the concept of real options seems to be adapted. Similarly, with the speed at which fintech is evolving, including the government’s response, the success or failure of such a strategy would become apparent sooner rather than later. The study concludes that the megabank digital plans and capital and business relationships with fintech businesses, among other things, appear to be more significant than the development of their financial technology, and the notion of real options appears to be adapted.