Alignment of the firm business model in the digitization process

: path dependence and reconfiguration at the case of banking business models

Abstract

The present paper analyses the impact of digitization on business models in the banking industry. With this analysis the study aims to answer the question: How are banks digitizing their business models and what are the roles of path dependencies and ambidexterity in the digitization process of business models? As this study reveals, the banking industry in particular is of relevance to the discussion of digitization since it must reconfigure their business model to changing customer needs in the new digital environment and reinvent their role in the disrupted ecosystem. Banks must drive the digital innovation agenda by linking up with FinTechs and technology providers, as well as cooperate with each other to sustain their competitive position and share costs. Finally, banks have to go beyond traditional innovation strategies by not only restructuring legacy infrastructures from the ground up but by reinventing their organisations with viable organisational structures and core technological capabilities. In order to come to these conclusions, developing a digital business model framework has been one element of the extant research in order to provide a holistic assessment tool on how digitization impacts a company’s business model. The literature review of 80 academic and management articles revealed that the BMI and digitization theory is rather fragmented and that further theoretical streams like path dependence and ambidexterity needed to be investigated to answer the research question. Lastly, banking experts where interviewed to test the developed framework and to gather industry data for which limited empirical evidence exists.

Date of Award	17 Feb 2017
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	René Bohnsack (Supervisor)