Banks’ Patenting as an Answer to Emerging Fintech and Bigtech Competition: A Cross-Country Empirical Study
Fintech, Pandemic, and the Financial System: Challenges and Opportunities
ISBN: 978-1-80262-948-4, eISBN: 978-1-80262-947-7
Publication date: 17 January 2023
Abstract
In this study, the authors use a country-level database covering 63 economies over the period 2014–2019 and employ a wide range of proxies to discuss new technological trends in finance, particularly in the banking sector. The authors also distinguish alternative technology-based business models that directly compete with banks [financial technology (fintech) and giant technology (bigtech) credit providers]. The results suggest that banks’ increased focus on technological innovation, as measured by market value and number of patents, is a possible response to the emerging technology-based nonbank competition, particularly from fintech and bigtech firms. Additionally, the results indicate that the emergence of financial innovation contributes negatively to the average value of bank patent, indicating significant competitive pressure on banks in the technological race. Thus, banks are countering the challenge of fintech and bigtech competition in the financial market by increasing their technology projects and patenting activities. These trends are crucial and may change the stability and sustainability perspectives of banks.
Keywords
Acknowledgements
Acknowledgments
The author would like to thank the editor Suk-Joong Kim and an anonymous referee for their valuable comments and suggestions. This work was supported by the National Science Center, Poland, grant OPUS15 no. 2018/29/B/HS4/00594.
Citation
Kowalewski, O. and Pisany, P. (2023), "Banks’ Patenting as an Answer to Emerging Fintech and Bigtech Competition: A Cross-Country Empirical Study", Kim, S.-J. (Ed.) Fintech, Pandemic, and the Financial System: Challenges and Opportunities (International Finance Review, Vol. 22), Emerald Publishing Limited, Leeds, pp. 13-36. https://doi.org/10.1108/S1569-376720220000022002
Publisher
:Emerald Publishing Limited
Copyright © 2023 Oskar Kowalewski and Paweł Pisany