Future Business Models in Financial Services: A Legitimacy-based Perspective

Authors

  • Saurav Kumar Aalborg University Business School, Aalborg University, Aalborg, Denmark https://orcid.org/0000-0002-0708-5321
  • Luiza Stein School of Business, Innovation and Sustainability, Halmstad University, Halmstad, Sweden https://orcid.org/0000-0002-0067-7447
  • Felix Honecker Adam Smith Business School, University of Glasgow, Glasgow, Scotland

DOI:

https://doi.org/10.54337/jobm.v13i2.10231

Abstract

In this conceptual paper, we discuss four future scenarios of the financial industry, illustrating a potential industry configuration. We take a legitimacy-based perspective on future business models, highlighting interdependencies between legitimacy, regulation policy, and industry structure. We conjecture that the Neo Bank scenario is the most probable in the future of Fintech.

Author Biographies

Saurav Kumar, Aalborg University Business School, Aalborg University, Aalborg, Denmark

Saurav Kumar is a PhD candidate at Aalborg University Business School. His research focuses on institutional innovation at the intersection of technology, business and society. Before entering academia, Saurav held leadership roles in the banking and financial-services industry, where he led process innovation and digital transformation initiatives.

Luiza Stein, School of Business, Innovation and Sustainability, Halmstad University, Halmstad, Sweden

Luiza Stein is a PhD candidate at Halmstad University, Sweden, and a Marie Skłodowska-Curie early-stage researcher within the project “Legitimation of Newness and its impact on the EU Agenda for Change (LNETN)”. In her research, Luiza studies how new forms of interactions and partnerships between industry actors are legitimised and influence the institutional environment for the development of new industries. Previously, Luiza has dedicated her work to the development of new ventures and innovation ecosystems alongside support organisations located in a leading innovation ecosystem in Brazil. Luiza received her MSc. in Administration and BA in Public Administration from the University of the State of Santa Catarina, Brazil.

Felix Honecker, Adam Smith Business School, University of Glasgow, Glasgow, Scotland

Felix is a Lecturer in Management at the University of Glasgow. His research focuses on social evaluations of new ventures, the adoption of socially productive technologies, and the role of hype in decision-making - particularly in deep-tech and financial technology contexts. He was a Marie Sklodowska-Curie Early Stage Researcher at the University of Glasgow. His doctoral research was part of the EC funded MCSA-ITN Project Legitimation of Newness and Its Impact on EU Agenda for Change, exploring the legitimation of new technologies, business models, and ecosystems in FinTech. Afterwards, Felix joined the UKRI/ESRC-funded Future Finance project as a Research Associate. Felix holds a bachelor’s degree in business and management from Aalen University in Germany, a master’s in entrepreneurship, innovation & technology from Strathclyde Business School and a PhD in Management from the University of Glasgow.

References

Abadi, J. and Brunnermeier, M. (2018), "Blockchain economics", working paper [25407], National Bureau of Economic Research, Cambridge, MA, https://doi.org/10.3386/w25407 (accessed 2 June 2025). DOI: https://doi.org/10.3386/w25407

Alaassar, A., Mention, A.-L. and Aas, T.H. (2020), Exploring how social interactions influence regulators and innovators: The case of regulatory sandboxes, Technological Forecasting and Social Change, Vol. 160, 120257, https://doi.org/10.1016/j.techfore.2020.120257. DOI: https://doi.org/10.1016/j.techfore.2020.120257

Amer, M., Daim, T.U. and Jetter, A. (2013), A review of scenario planning, Futures, Vol. 46, pp. 23–40, https://doi.org/10.1016/j.futures.2012.10.003. DOI: https://doi.org/10.1016/j.futures.2012.10.003

Bank for International Settlements (2021), “CBDCs: An opportunity for the monetary system”, available at: https://www.bis.org/publ/arpdf/ar2021e3.pdf (accessed 2 June 2025).

Beniiche, A. (2020), "A study of blockchain oracles", working paper, arXiv, available at: https://doi.org/10.48550/arXiv.2004.07140 (accessed 2 June 2025).

Bromberg, L., Godwin, A. and Ramsay, I. (2017), Fintech sandboxes: Achieving a balance between regulation and innovation, Journal of Banking and Finance Law and Practice, Vol. 28, No. 4, pp. 314–336.

Chen, Y. and Bellavitis, C. (2020), Blockchain disruption and decentralized finance: The rise of decentralized business models, Journal of Business Venturing Insights, Vol. 13, e00151, https://doi.org/10.1016/j.jbvi.2019.e00151. DOI: https://doi.org/10.1016/j.jbvi.2019.e00151

Christensen, C.M., McDonald, R., Altman, E.J. and Palmer, J.E. (2018), Disruptive innovation: An intellectual history and directions for future research, Journal of Management Studies, Vol. 55, No. 7, pp. 1043–1078, https://doi.org/10.1111/joms.12349. DOI: https://doi.org/10.1111/joms.12349

Cocuzzo, C. (2020), "Central Bank Digital Currencies: Challenges for commercial banks", available at: https://think.ing.com/articles/central-bank-digital-currencies-challenges-for-commercial-banks/ (accessed 2 June 2025).

Deloitte (2023), “Are Central Bank Digital Currencies (CBDCs) the money of tomorrow?”, available at: https://www.deloitte.com/content/dam/assets-zone2/lu/en/docs/industries/financial-services/2023/lu-are-central-bank-digital-currencies.pdf (accessed 2 June 2025).

Frost, J., Gambacorta, L., Huang, Y., Shin, H.S. and Zbinden, P. (2019), BigTech and the changing structure of financial intermediation, Economic Policy, Vol. 34, No. 100, pp. 761–799, https://doi.org/10.1093/epolic/eiaa003. DOI: https://doi.org/10.1093/epolic/eiaa003

Gogel, D. (2021), “DeFi beyond the hype: The emerging world of decentralized finance”, Wharton Blockchain and Digital Asset Project, University of Pennsylvania, available at: https://wifpr.wharton.upenn.edu/wp-content/uploads/2021/05/DeFi-Beyond-the-Hype.pdf (accessed 2 June 2025).

Harwick, C. and Caton, J. (2019), "What’s holding back blockchain finance? On the possibility of decentralized autonomous finance", working paper, SSRN, https://doi.org/10.2139/ssrn.3373382 (accessed 2 June 2025). DOI: https://doi.org/10.2139/ssrn.3373382

Jones, S. and Avelar, B. (2021), "El Salvador becomes first country to adopt bitcoin as legal tender", The Guardian, 9 June, available at: https://www.theguardian.com/world/2021/jun/09/el-salvador-bitcoin-legal-tender-congress (accessed 2 June 2025).

Khatri, Y. (2020), "Coinbase’s crypto debit card is launching in the U.S. and lets users earn back bitcoin", The Block, 28 October, available at: https://www.theblock.co/post/82683/coinbase-visa-crypto-debit-card-us-launch-bitcoin-2021 (accessed 3 June 2025).

KPMG (2019), “Regulation and supervision of fintech”, available at: https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2019/03/regulation-and-supervision-of-fintech.pdf (accessed 2 June 2025).

Lau, T. and Leimer, B. (2019), The era of connectedness: How AI will help deliver the future of banking, Journal of Digital Banking, Vol. 3, No. 3, pp. 215–231, https://doi.org/10.69554/NESU7200 DOI: https://doi.org/10.69554/NESU7200

Manning, L. (2020), "What does institutional adoption of crypto mean for 2021 and beyond?", Nasdaq, available at: https://www.nasdaq.com/articles/what-does-institutional-adoption-of-crypto-mean-for-2021-and-beyond-2020-12-14 (accessed 2 June 2025).

Munir, K.A. (2005), The social construction of events: A study of institutional change in the photographic field, Organization Studies, Vol. 26, No. 1, pp. 93–112, https://doi.org/10.1177/0170840605049463. DOI: https://doi.org/10.1177/0170840605049463

OECD (2020), "Digital disruption in banking and its impact on competition", working paper [243], OECD, Paris, https://doi.org/10.1787/b8d8fcb1-en (accessed 2 June 2025). DOI: https://doi.org/10.1787/b8d8fcb1-en

Omarini, A. (2020), FinTech: A new hedge for a financial re-intermediation. Strategy and risk perspectives, Frontiers in Artificial Intelligence, Vol. 3, Article 63, https://doi.org/10.3389/frai.2020.00063. DOI: https://doi.org/10.3389/frai.2020.00063

Palmié, M., Wincent, J., Parida, V. and Caglar, U. (2020), The evolution of the financial technology ecosystem: An introduction and agenda for future research on disruptive innovations in ecosystems, Technological Forecasting and Social Change, Vol. 151, 119779, https://doi.org/10.1016/j.techfore.2019.119779. DOI: https://doi.org/10.1016/j.techfore.2019.119779

Son, H. (2021), "Bitcoin custody: US Bank launches service as institutions race to cater to crypto demand", CNBC, 5 October, available at: https://www.cnbc.com/2021/10/05/bitcoin-custody-us-bank-launches-service-as-institutions-race-to-cater-to-crypto-demand.html (accessed 2 June 2025).

Stegmaier, C. and Daniel, L. (2020), “Neobanks 2021: Shifting from growth to profitability”, Exton Consulting, available at: https://www.wallstreetitalia.com/app/uploads/2021/05/report-neobanks-2021.pdf (accessed 2 June 2025).

Suchman, M.C. (1995), Managing legitimacy: Strategic and institutional approaches, Academy of Management Review, Vol. 20, No. 3, pp. 571–610, https://doi.org/10.2307/258788. DOI: https://doi.org/10.2307/258788

The Clearing House (2021), “On the road to a U.S. central bank digital currency — challenges and opportunities”, available at: https://www.theclearinghouse.org/-/media/new/tch/documents/payment-systems/tch_us_cbdc_7_27_21.pdf (accessed 2 June 2025).

Turcan, R.V. (2018), Sociology of knowledge perspective on entrepreneurship, in Turcan, R.V. and Fraser, N.M. (Eds.), The Palgrave Handbook of Multidisciplinary Perspectives on Entrepreneurship, Springer International Publishing, Cham, pp. 433–455, https://doi.org/10.1007/978-3-319-91611-8_20. DOI: https://doi.org/10.1007/978-3-319-91611-8_20

Turcan, R.V. and Deák, B. (2022), Fintech – stick or carrot – in innovating and transforming a financial ecosystem: toward a typology of comfort zoning, Foresight, Vol. 24, No. 2, pp. 126–139, https://doi.org/10.1108/FS-02-2021-0052. DOI: https://doi.org/10.1108/FS-02-2021-0052

Wright, G., Bradfield, R. and Cairns, G. (2013), Does the intuitive logics method – and its recent enhancements – produce ‘effective’ scenarios?, Technological Forecasting and Social Change, Vol. 80, No. 4, pp. 631–642, https://doi.org/10.1016/j.techfore.2012.09.003. DOI: https://doi.org/10.1016/j.techfore.2012.09.003

Downloads

Published

31-05-2025

Issue

Vol. 13 No. 2 (2025): Open Issue

Section

Short papers

License

Articles published in Journal of Business Models follow the license Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported (CC BY-NC-ND 3.0)

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License: Attribution - NonCommercial - NoDerivs (by-nc-nd). Further information about Creative Commons