FinTech Innovation and Competitive Advantage: Examining the Role of Data Analytics Capabilities (Journal of Integrated Science Technology and Management)
Summary
- A research simulation of 400 FinTech firms examines how data analytics capability (DAC) and regulatory sandboxes drive competitive advantage.p.1
- Data analytics capability has a standardized effect of 0.79 on innovation.p.1
- Innovation exerts a standardized effect of 0.47 on competitive advantage, while DAC exerts a direct effect of 0.40.p.1
- The total effect of DAC on competitive advantage reaches 0.77, split almost evenly between mediated and direct routes.p.1
- Regulatory sandbox participation interacts with innovation at 0.26, increasing the competitive advantage derived from innovation.p.1
Key insights
- Data analytics capability serves as a critical antecedent to FinTech innovation with a standardized effect of 0.79.p.1
- Innovation partially mediates the relationship between DAC and competitive advantage with a path coefficient of 0.47.p.1
- DAC maintains a continuous direct effect of 0.40 on competitive advantage by enhancing day-to-day operational decisions such as risk, pricing, and fraud detection.p.1
- Participation in regulatory sandboxes moderates the return to innovation with an interaction effect of 0.26, enabling firms to capture more market advantage.p.1
- The total effect of DAC (0.77) demonstrates that analytical capability is both a driver of new product launches and an independent defense mechanism.p.1
- In simulated estimates, scale contributes 0.16 to competitive advantage, which is smaller than either the direct or indirect routes of DAC.p.3
- Open-banking regimes serve as capability-building complements to sandboxes by lowering data accumulation barriers for smaller firms.p.4
Topics and entities
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