Abstract
This paper seeks to identify and evaluate the key factors causing an ongoing change within the UK commercial and retail banking industry. It breaks the process down into three key factors; strategy, competition, and disruptive innovation. The report seeks to analyse these components as well as the theory of dynamic capabilities to identify whether their use could be an effective tool in protection against disruptive innovation. The paper provides a background to the banking market and the evolution of its regulatory environment, as well as the current trends such as that towards Open Banking. The background also reports on speculation within the industry of future entrants such as large technology firms. The paper goes on to provide a review of the applicable literature. This is broken down into; strategy relatable to the banking sector, dynamic capabilities, and disruptive innovation. The research identifies that although the banking sector is “ripe for disruption”, the effects of disruptors have largely been limited so far, with the rise of fintech and banking innovations largely seen as opportunities, rather than threats, for incumbent banks. Nonetheless, the paper recommends an adaptation of the dynamic capabilities model to the incumbent banks as a guide to an effective strategic response to both future disruptions as well as making the most of the opportunities available to them, in turn improving their product offering and meet changing customer needs.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
KEYWORDS
Dynamic Capabilities, Disruptive Innovation
Digital Media
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