The Digital Transformation and Disruption in Business Models of the Banks under the Impact of FinTech and BigTech

Abstract

The explosive development of artificial intelligence, machine learning and big data methods in the last 10 years has been felt in the financial-banking field which has subjected to profound changes aimed at determining an unprecedented increase in the efficiency and profitability of the businesses they carry out. The tendencies of applying the concepts coming from AI, together with the continuous increase of the volume, complexity and variety of the data that the banks collect, store and process have acquired the generic names of FinTech, respectively BigTech. Five main areas exist where Fintechs and Bigtechs can provide improvements in business models for the banks: introducing specialized platforms, covering neglected customer segments, improving customer selection, reduction of the operating costs of the banks, and optimization of the business processes of the banks. We will present some of these improvements, and then we will show how the business models of the banks dramatically transform under the influence of these changes.