Title:

A dynamic perspective on competition between traditional banking and banking fintechs

Group publication title:

Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu

Title in english:

Konkurencja pomiędzy tradycyjną bankowością a fintechami bankowymi w ujęciu dynamicznym

Creator:

Chrzanowski, Marek ; Dąbrowski, Ireneusz

Description:

Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu = Research Papers of Wrocław University of Economics; 2021; vol. 65, nr 2, s. 1-14

Abstrakt:

The emergence of innovative financial services is having a huge impact on competition in the banking services market. The aim of the article is to show, from a dynamic perspective, the foundations of a model of competition occurring in the banking world between traditional financial institutions and fintechs. A dynamic two-sector model of competition is proposed with built-in feedback mechanisms in the form of demand side economies of scale. The model shows changes in market shares after a challenger enters a bank’s market with a portfolio of services as substitutes for the bank’s product offer. The traditional and new entities do not adjust the scope of their products over time, instead competing using those already available. The model obtained three economically significant steady states. Further analysis of the time path showed that the sector is heading towards an oligopolistic market structure in which both entities stabilize their market shares. However, in the event of low initial market penetration by traditional banks, a new innovative entity (a challenger bank) will completely dominate the sector, creating a monopolistic market structure

Publisher:

Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu

Place of publication:

Wrocław

Date:

2021

Resource Type:

artykuł

Resource Identifier:

doi:10.15611/pn.2021.2.01

Language:

pol ; eng

Relation:

Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu = Research Papers of Wrocław University of Economics; 2021; vol. 65, nr 2

Rights:

Pewne prawa zastrzeżone na rzecz Autorów i Wydawcy

Access Rights:

Dla wszystkich zgodnie z licencją

License:

CC BY-SA 4.0

Location:

Uniwersytet Ekonomiczny we Wrocławiu