FinTech as “a new financial industry that applies technology to improve financial activities” (Schueffel, 2016, p.45) is built upon a distributed model in terms of bringing technology closer and allowing the development of new services, encouraging customer value and centricity. FinTech brings an entire different logic that is causing fundamental changes in the structure and purpose of business, changes that the majority of incumbents are not ready to face (Nicoletti, 2017).
Notably, 83% of financial institutions are expecting to increase partnerships over the next three to five years, 64% are currently engaging in partnerships with FinTech companies while 89% are expecting drastic changes in internal innovation efforts over the next three to five years (PwC, 2017). These developments have already signalled to regulators and policymakers that the current regulatory frameworks are not anymore compatible with this emerging financial technologies entrepreneurial environment (He et al., 2017). Extant literature is beginning to pay attention to the emergence and developments of regulatory sandboxes to provide flexibility and accessibility across the financial services industry (Lee, 2017), along with, providing foundations for sound competition within the financial industry (Noh, 2017). Anchored in this ongoing discussion around the relationship between FinTech and Regulation for Financial Innovation, this proposal by bringing multiple insights from key informants in financial services, aims at exploring how regulatory sandboxes can help in building long-term experimentation capabilities that are essential to innovation?
The outcomes from the project have implications for science and practice of innovation management. For science, it extends the state-of-the-art in by integrating governance theories with innovation practice. In doing so, the project will pave new paths for research on regulatory and ethical considerations in financial innovations (i.e. responsible innovation). For practice, the project is expected to deliver understanding of characteristics of FinTech entrepreneurs and start-ups when it comes to embracing openness during experimentation. In turn, it provides insights into the necessary conditions for improving effectiveness of regulatory sandboxes in driving financial innovations.
C. Proposed Postgraduate Research Programme
School: School of Management Program name: PhD (Management) Course code: DR204 Enabling Capability Platform (ECP) Alignment : Global Business Innovation