FINTECH vs TECHFIN: A New Form of Coopetition, Detailed Comparison between Financial Technology Firms

Abstract

Nowadays, digital transformation is experienced in many areas of business life. The digitization process has accelerated especially after the Covid-19 pandemic. Digitalization has covered all functions of an enterprise as of today. Finance comes first among these areas. Huge advances in technology have also affected the financial world, and today a new business model called financial technologies has emerged. Although financial technology companies are relatively new, competition in this area is extremely destructive. In the field of financial technologies, banks currently providing classical banking services and fintech and techfin companies that produce customized solutions for their customers are in competition. Each actor has a different strength and weakness in the competition. For instance, fintech companies meet customer needs better than banks because they provide customized service areas, but since they are relatively small organizations, customers may hesitate to involve with large amount of transactions. Although Techfin companies are larger and have more reputable brand value than fintech companies, they may also be insufficient to produce innovative solutions in the financial field when compared to fintechs. Banks, which are the most established players in the sector, fall behind in producing innovative services compared to fintech and techfin companies despite of their relatively larger asset structure and strong brand values. In this study, the digitalization process in the sector is examined in detail and these 3 actors in the financial technologies sector and their relations are analzyed in detail. As a result of the analysis, the survival of companies operating in the field of financial technologies in the future depends on their successful cooperation to complement each other's shortcomings instead of competing with each other harshly