Modularity and Network Integration: Emergent Business Models in Banking

This paper introduces the concept of modularity in financial services, discusses how new value chains are created and addresses emerging opportunities for innovative business models in the digital economy. We argue that innovation occurred in the banking sector despite the lagging adoption of new operational practices but due to technology drive for new ways to provide services. Banking innovation is commonly a matter of case facilitation vs. lock-in, in which the systemic effects of balancing delay vs. fast progress requires business model choices. In the banking sector, where there is little power stability among stakeholders, asymmetrical periods of dynamism are triggered by the modernization of the systems [13]. The main argument of this paper is that we can use models of modularity and network integration to improve our understanding of sustainable emerging banking practices. This is fundamental when establishing the potential contribution of this sector to digital economy models.