Fintech – Stick or Carrot – in Innovating and Transforming a Financial Ecosystem: Toward a Typology of Comfort Zoning

Purpose: Fintech is an “untilled field” in which the relation between Fintechs and incumbents is yet to be understood. This paper aims to explore this relationship and advance its theoretical and practical understanding. It further contributes toward Fintech paradigm and research domain emergence that both to date remain yet elusive. Design/methodology/approach: This paper adopted a multiple-case study strategy for the purpose of theory building. Seven players from the Fintech ecosystem in Quebec (Canada) were selected, representing financial institutions, Fintech start-ups and Quebec’s financial cluster. Primary data was collected via in-depth interviews with ten respondents at the level of vice presidents, Managers, directors, chief executive officers and founders, and unobtrusive data – in the form of running records, mass-media news reports, presentations and proceedings from Fintech events. Data analysis was informed by grounded theory methods and techniques. Findings: Grounded in data, this paper puts forward a typology of “comfort zoning” and its four types: nimbling, imperiling, cocooning and discomforting. Research limitations/implications: Following the tenets of the grounded theory, four criteria are used to evaluate the emergent theory: fit, relevance, workability and modifiability. It is expected the interpretation and adoption of comfort zoning typology will be challenged, modified and enhanced by Fintech researchers and practitioners. Practical implications: The comfort zoning typology would aid practitioners in their efforts to define and refine the domain of Fintech, problematize it and eventually enhance the relationship between Fintechs. Originality/value: This paper fulfills an identified need to explore the relationship between Fintechs and incumbents and advance the theoretical and practical understanding of this relationship.