1 Introduction
In the past two decades, digitalization has influenced many industries, offering new entrepreneurial opportunities and creating new systems of innovation (Barrett et al.
2015; Autio et al.
2018). Most recently, the banking industry, one of the most traditional and conservative sectors in the economy, has been confronted with potentially disruptive technology-driven innovations and Internet-based solutions (Navaretti et al.
2017). By developing new information technology–(IT-) enabled service models, startup firms and multinational technology companies have in many cases created more customer-oriented and user-friendly digital applications in the banking industry, leading to growing digital servitization of financial products.
1Many of these new banking solutions have also been developed by financial technology (fintech) companies. Some of the new digital innovations have the potential to reshape or even crowd out some of the business activities of more traditional banks. As a result, digitalization and platform-enabled fintechs have forced banks to reconsider their corporate boundaries and make them more permeable to market interactions (Kohtamäki et al.
2019). More permeable organizational forms such as strategic alliances allow banks to confront the threat of technology-driven firms and offer traditional banks new advantages to benefit from innovations developed by fintechs in ways different from the simple “make-or-buy” decision (Borah and Tellis
2014; Jacobides and Billinger
2006). For example, banks have established fintech incubators and accelerators to enable innovations while maintaining control through a minority share in the firms that are built or supervised.
A lack of legacy infrastructure and comparatively low level of organizational complexity often enable fintech firms to be more agile, innovate faster, and be more radical in their approach to innovation (Brandl and Hornuf
2020). By contrast, it is more difficult for traditional banks to adapt to some of the new technological developments because they need to comply with more extensive regulatory requirements. Often, a larger number of stakeholders need to be convinced when adopting far-reaching organizational changes in a traditional bank (Klus et al.
2019). Moreover, digital service innovations typically crowd out banks’ existing distribution channels (Vendrell-Herrero et al.
2017), thereby reducing banks’ incentives to introduce new distribution channels on their own. The sluggishness of traditional banks to adapt to digital challenges not only has implications at the individual bank but also affects the entire financial ecosystem. Given the legacy infrastructure and high level of organizational complexity inherent in many banks, they need to re-organize their ecosystem to improve the digital services offered to retail and business clients (for related work on multinational industries, see Sklyar et al. (
2019).
In this article, we analyze which characteristics of banks are associated with different forms of alliances with fintech companies. The Financial Stability Board of the Bank for International Settlements defines fintech as “technologically enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services” (European Banking Authority
2017, p. 4). We are particularly interested in the number of bank–fintech alliances that have been established in developed economies and the factors related to different forms of alliances such as investments or product-related collaborations. Finally, we investigate the impact of these alliances on banks’ market value.
2
The literature on financial innovation in general and bank–fintech alliances in particular is scarce. First, our analysis contributes to the empirical literature on financial innovation. Lerner (
2002) and Miller (
1986) provide empirical evidence that financial innovation, as measured by the filing of financial patents, has been increasing since the late 1970s. Moreover, Scott et al. (
2017) find that the financial industry had historically spent a large share of expenses on IT, which reached more than one-third of all expenses in 1992. One reason for the high share of IT expenses was that the financial industry employed computers early on as part of their business model. Historically, innovations (e.g., the automated teller machine) have led to changes in financial organizations and services (Merton
1995). The quality of financial patents and financial innovations was, nevertheless, often low (Lerner et al.
2015). Therefore, the financial industry was perceived as one of the least innovative. Still, scant empirical research has investigated whether fintech startups have pressured traditional banks to innovate or even forced banks to engage in strategic alliances with them. We fill this gap in the literature by analyzing bank characteristics that are associated with different forms of alliances with fintech companies.
Second, our analysis contributes to the emerging literature investigating not only individual business models but also the fintech market in its entirety. Haddad and Hornuf (
2019) analyze fintechs in 55 countries and provide evidence that markets witness more fintech formations when the economy is well-developed and venture capital is easily accessible. Other relevant factors for the formation of fintechs are access to loans, secure Internet servers, mobile telephone subscriptions, and a large labor force. Cumming and Schwienbacher (
2018) find that differences in the enforcement of financial regulations of startups and banks after the financial crisis contributed to venture capital investments in fintech startups. Puschmann (
2017) provides a model to categorize the industry. Navaretti et al. (
2017, p. 17) conduct a conceptual analysis on the relationship between fintechs and banks and find that the “game is still open” and “a lot of work lies ahead” for the industry.
A related article to ours is that of Brandl and Hornuf (
2020), who run a bank–fintech network analysis for Germany and find that most relationships are product-related collaborations. They argue that this is because most fintechs develop an algorithm or software solution, the value of which can only be determined over time, when the software has been adapted more thoroughly to customer needs. We add to their findings by investigating the particular bank characteristics associated with a bank–fintech alliance. These alliances occur against the backdrop that the arrival of fintechs modifies the supply chain interdependency of banks and thus also establishes new ecosystems (Kohtamäki et al.
2019; Vendrell-Herrero et al.
2017). More precisely, we consider different forms of alliances, such as product-related cooperation and minority and majority equity stakes, which tend to be classified in the transaction cost literature as “hybrid structures” (Jacobides and Billinger
2006; Williamson
1991), and investigate bank characteristics (e.g., profitability) associated with these alliances.
Finally, we also contribute to the “make, buy, or ally” literature (Borah and Tellis
2014; Jacobides and Billinger
2006), which evidences a broad range of interactions that firms can have with other firms in the market, particularly in the context of innovation management. In particular, our results on why certain types of alliances occur (e.g., investments vs. product-related collaborations) are consistent with incomplete contract theory (Aghion and Bolton
1992; Grossman and Hart
1986). In a broad sense, we also contribute to research on servitization, especially the service science stream of the literature that Rabetino et al. (
2018) identifies and that focuses on business-oriented approaches to servitization (e.g., Baines et al.
2009), the systematic development of new services (e.g., Bullinger et al.
2003), and the role of organizational, technological, and human factors in the configuration of new services (e.g., Spohrer et al.
2007; Vargo and Lusch
2011). The financial industry is a relevant sector to examine in this context, given the new service strategies banks and fintechs are currently developing, the additional services incumbents and new market participants add to existing financial products, and the novel service packages now being offered by platforms such as Bó, Mettle, and N26.
Digital servitization in the banking industry initiated an evolving ecosystem that results from the digitalization of financial products and new IT-enabled service models. Industries affected by digital servitization typically confront upstream and downstream competition (Barrett et al.
2015); the current changes in the financial industry also affect both upstream (through new services and service packages offered) and downstream (through enhanced customer services and novel distribution channels) competition. In the former case, dis-intermediated finance solutions such as crowdfunding give retail investors access to new investment products. In the latter case, the emergence of various platforms that allow customers to directly compare prices of different banks has modified how financial products are offered and distributed.
The structure of this article is as follows: In the “
Literature review and hypotheses” section, we outline our theory and hypotheses, and in the “
Data and methods” section, we describe our data and the methods applied. In the “
Empirical results” section, we present the results. The “
Discussion” section provides an analytical discussion, and the “
Conclusion” section concludes with implications for practice, and outlines avenues for future research.
2 Literature review and hypotheses
To increase their profitability, banks have historically developed financial innovations (Scott et al.
2017) and more recently embraced digital services as a new engine of growth (Barrett et al.
2015). Beck et al. (
2016) show that financial innovations are positively associated with bank growth. The recently emerging service science literature also suggests that the development of new service models can reduce costs to firms and add value to customers (e.g., Sakao and Shimomura
2007). Similar to the recent transformation of century-old business models in the computer equipment and software industry, new IT-enabled service models and digital servitization are likely to enhance the financial performance of incumbent firms in the banking industry (Kohtamäki et al.
2020; Spohrer and Maglio
2010). Moreover, novel digital infrastructures such as the blockchain technology can facilitate the combinatorial potential for enhanced service innovations (Yoo et al.
2010). In their study on 50 Swedish advanced service providers, Sjödin et al. (
2019) examine how relational governance for the provision of advanced services can enhance the financial performance of a firm. They identify a need to apply a set of diverse relational governance strategies to generate superior financial performance. In line with these findings, we derive testable hypotheses about what drives bank–fintech interactions under the premise that alliances are the result of mutually beneficial transactions between banks and fintechs (Coase
1960; Scott et al.
2017). These transactions are meant to enhance the bank’s value through the implementation of financial innovations. In other words, bank–fintech alliances aim to improve the market value of both fintechs and banks.
While early research on the boundary of firms primarily considered market transactions versus the acquisition of firms, and thus the internalization of externally developed products or services (starting with Coase
1937), recent research on organizations has evidenced various other forms of interactions that could lead to alliances for the joint development of products or services and the exploitation of innovation opportunities (Borah and Tellis
2014; Jacobides and Billinger
2006). Current innovations pose particular challenges to the optimal boundary of banks, for which market transactions could provide more flexible solutions to the increasing digitalization of organizations and the emergence of platform-based business models in the financial industry. If banks cannot develop new digital services themselves to reap the benefit of digitalization, they must adopt a more permeable structure that facilitates interactions with fintechs to better match financial service capabilities with the particular needs of the market.
Fintechs might collaborate with banks for several reasons. Through an alliance with an established player in the financial industry, fintechs can obtain access to a broader customer base, gain access to superior knowledge in how to deal with financial regulations, and improve their own digital services. Some fintechs engage in an alliance with a bank to obtain access to a banking license, which in many cases would be too cumbersome and too expensive for a fintech startup to obtain (Klus et al.
2019). By contrast, banks can secure a competitive advantage by collaborating with fintechs that are developing or have already developed a better way to provide financial services. In some cases, investing in a fintech firm can give a bank the exclusive rights to use a specific application or license, enabling it to exclude competitors at its discretion. Similar to industrial firms, banks can thus protect their core businesses (Hagedoorn and Duysters
2002). Moreover, such an investment allows the bank to exercise control and directly influence the product development process and service strategies of the fintech.
Given the opportunities and challenges associated with the digital transformation of the financial industry, the majority of banks have by now adopted a digital strategy that outlines how digital transformation should occur. One way to execute this transformation is to assign responsibility for this process to a designated manager, and some banks have thus created the position of a chief digital officer (CDO). While research has examined the role of the chief executive officer and chief financial officer in earnings management (Jiang et al.
2010) and explored whether hiring a chief financial officer changes fraudulent financial reporting (Geiger and North
2006), little is known about the role of the CDO. This lack of research is likely due to the recent creation of this new board position. Given the specific tasks assigned to the CDO and the context in which this position has been created, the CDO may predominantly develop in-house digitalization competencies as well as new service strategies and collaborate with fintechs only if doing so is the most cost-efficient solution. However, ceteris paribus, a bank with a CDO, may also interact more frequently with fintechs than banks without such a position because initiating alliances with fintechs could simply be part of the same corporate change strategy.
If CDOs implement strategies to develop new digital services within the bank, they might also be more likely to pursue organizational changes that make banks more permeable to the market to reap the full benefits of the new services, thus making interactions with fintechs more likely. These interactions may take the form of an investment or a product-related collaboration. Alliances enable banks to benefit from innovations without facing the burden of having to develop them in the presence of existing organizational structures and legacy IT systems. A clear mission of a CDO and the reduced burden to innovate in the absence of a legacy system thus lead banks with a CDO to launch more alliances. Similarly, some banks do not hire a CDO but nevertheless develop a clear digital strategy and delegate the development of this strategy to other managers of the bank. As this may lead to the same outcome, we conjecture that banks with a clear digital strategy are more likely to have alliances with fintechs than banks without such a strategy. We summarize these predictions as follows:
Banks have different motives when they engage in an alliance with a fintech. The development of digital services affects how financial products look and how they are distributed to customers. If banks cannot develop new digital services themselves because of their IT legacy and organizational structure, product-related collaborations enable them to broaden their portfolio and use alternative distribution channels to reach new customers. Offering fintech services or applications on their websites helps banks maintain their customer base without having to develop new services or applications themselves. Often, developing these services or applications alone is a cumbersome task because many banks operate software systems that are barely compatible with modern end-user applications and suffer from organizational legacy (Brandl and Hornuf
2020). Moreover, because many fintechs offer software solutions, which must be customized to end-user needs and updated at regular intervals, acquiring a fintech is risky for a bank. Whether a fintech can develop efficient digital services in a timely manner is uncertain, and having the option to choose the software of another provider can be a risk-minimizing strategy for a bank. Waiting until the digital service of a fintech has been customized and is running in the mass market that might therefore be a better strategy. By acquiring a fintech early on in the development or even commercialization phase, banks can easily bet on the wrong horse. In such a situation, taking the route of setting up alliances may allow the bank to reduce technological and market risk. As the make, buy, or ally literature indicates (Borah and Tellis
2014; Jacobides and Billinger
2006), alliances can therefore represent a more flexible solution particularly suitable for innovations.
The relative benefits of setting up an alliance with an existing fintech startup rather than acquiring it are factor specific, as not all banks will benefit equally from forming an alliance. Strategic alliances may also fail to generate superior financial performance, notably because banks and/or fintechs lack specialized knowledge or proper decision-making authority to operate successfully within a novel financial ecosystem (Das and Teng
2000; Li et al.
2019). If, however, banks wait too long, given the competitive environment in which they are evolving, they might lose a valuable innovation to a competitor, something banks may be able to shield themselves against by acquiring the startup early on. Large banks often have deeper pockets than small banks and can also bear the risk of acquiring the wrong fintech. An investment, through either a minority or majority acquisition, in a fintech allows banks to internalize the knowledge of the fintech better and obtain sole possession of its knowledge (Teece
1986). We, therefore, expect bank size to be associated with the form of alliances chosen and conjecture the following:
In the context of innovation, the theoretical literature on incomplete contracting has developed strong arguments on the choice between building corporate, collaborative relationships governed by contracts and acquiring the innovating firm (Grossman and Hart
1986). Innovation activities are typically difficult to contract because their ultimate outcome is hard to determine
ex ante and thus is non-verifiable
ex post (Aghion and Bolton
1992). This is especially true for early-stage firms, in which the ultimate outcome of an innovation is still largely unknown. In this case, contracting between the fintech and the bank is not an effective way of generating synergies because the fintech cannot be contractually constrained in creating synergies with the bank. When contract terms about future innovations cannot clearly be written down,
ex post enforcement becomes impossible. Consequently, investing in the fintech is superior to a product-related cooperation because it allows the bank to control the decisions made inside the fintech firm more directly.
After analyzing the characteristics of alliances, an important question is whether the alliances between banks and fintechs ultimately create economic value. Because many banks have only recently engaged in alliances with fintechs, it is still too early to investigate the effect of these alliances on long-term performance measures of banks or even their corporate structure. Nevertheless, event studies are an established method to evaluate the market expectations of future cash flows that might result from organizational changes, such as mergers, joint ventures, or strategic alliances (Amici et al.
2013; Gleason et al.
2003; Marciukaityte et al.
2009). Given the increasing importance of digitalization for the financial industry and its impact on the survival of incumbent banks, we expect markets to react to announcements of bank–fintech alliances. If stock prices reflect future earnings of banks and if strategic alliances with fintechs are value enhancing, for example, through superior digital servitization strategies, this should be reflected in the market valuation of the involved bank.
5 Discussion
In this article, we examined the impact of digitalization in the banking industry by analyzing the bank characteristics that play a role in the alliances between banks and fintech startups. Moreover, we investigated the factors that are relevant for a bank to invest in a fintech rather than entering into a product-related collaboration. Finally, we tested whether announcing a new alliance affects banks’ market value.
Using a hand-collected dataset covering the 100 largest banks in Canada, France, Germany, and the United Kingdom, we found that bank–fintech alliances have increased in the past decade and that the types of alliances are rather similar in all four countries. Thus, we provide empirical evidence that digitalization and new market players have indeed forced banks to make their corporate boundaries more open to market interactions (Kohtamäki et al.
2019). However, there is no apparent difference in the way banks interact with fintechs in market-based (Canada and the United Kingdom) and bank-based (France and Germany) financial systems. Alliances across the four countries examined are most often characterized by a product-related collaboration, which is a comparatively less institutionalized form of alliance that offers little or no control in the product and service development process of a fintech. This finding is consistent with the theoretical observation that financial innovations may by particularly difficult for a bank to contract and internalize through an acquisition (Brandl and Hornuf
2020; Scott et al.
2017; Teece
1986). From a managerial perspective, this raises the question whether banks should use this form of alliance to outsource their innovation activities and thereby become increasingly dependent on fintechs and other partners for ensuring digital transformation.
While prior research suggests that banks should benefit from voluntary cooperation and innovations developed by fintechs in ways different from the simple make-or-buy decision (Borah and Tellis
2014; Jacobides and Billinger
2006), the results from our event study indicate that at least for short-term event windows, financial markets find alliances with fintech value-reducing. A potential explanation for this is that in the future, banks might be reduced to innovation followers in the new financial ecosystem, with incumbent banks quickly losing their relevance. We also find that fintechs engaging in alliances operate in various segments across the four countries we investigate, with payment services being the most prevalent segment. Given that, overall, most fintechs operate in the financing segment (Haddad and Hornuf
2019), banks seem to benefit most from external technology in the realm of payment services.
Our findings confirm that the implementation of a digital strategy and the employment of a CDO by a bank are positively related to both the mere existence and the number of alliances with fintechs. We consider this indication that alliances with fintechs, the employment of a CDO, and the execution of a clear digital strategy are part of the same overall corporate change strategy. All these strategic approaches may enable banks to be more permeable to the outside market, which is necessary to foster different forms of alliances and remain competitive (Borah and Tellis
2014; Jacobides and Billinger
2006; Kohtamäki et al.
2019). We further find that large, listed, and universal banks are more likely to establish alliances with at least one fintech than smaller, unlisted, and specialized banks. The bank’s financial situation, as measured by the return on average assets, is a relevant predictor for explaining the number of alliances in which a bank becomes involved. That less profitable banks engage more frequently in alliances with fintechs indicate that these banks try to compensate for their own inefficiency and inability to innovate by engaging in alliances. Whether such a strategy will improve their performance, however, remains unclear.
Product-related collaborations can help banks broaden their service portfolio and use alternative distribution channels to reach new customers. Such a strategy appears particularly beneficial for banks that cannot develop new digital services themselves because of their IT legacy or organizational structure. As mentioned previously, regarding the market effect of publicly announced alliances, we find that announcements have a negative effect on a bank’s value for short-term windows. While this finding does not indicate much about the ultimate profitability of bank–fintech alliances, it suggests that markets believe that banks should develop new digital services themselves rather than engaging in alliances with fintechs.
Our results further suggest that neither a digital strategy nor the employment of a CDO is more strongly connected with an investment than with product-related collaborations. Although this finding contradicts our hypothesis and previous research on board positions (Geiger and North
2006; Jiang and Li
2009), we assume that CDOs do not simply focus on acquiring fintechs but also increasingly work to develop digitalization expertise in-house. We find, however, that large banks are more likely to become financially engaged in fintech firms. Through a minority investment or a full acquisition in a fintech, banks can often obtain representation on the fintech’s board of directors and thereby gain complete or partial control over it. Ensuring a strong and stable relationship in strategic alliances, which from the start are inherently instable, is often critical to their success, as otherwise internal organizational tensions may result in conflicts and ultimately lead to the dissolution of an alliance (Das and Teng
2000). Moreover, through an investment, banks cannot only orchestrate specific service developments that fit the overall corporate change strategy but also engineer services in a way that enables them to integrate these services best in their existing organizational structures and IT infrastructure. Large banks often set up incubator and accelerator programs to obtain financial stakes in fintech firms early on. We find that banks are also more likely to financially invest in smaller fintechs.
6 Conclusion
6.1 Practical and policy implications
Our empirical analysis has implications for the development of theories regarding strategic alliances and digital servitization in the domain of financial services. The new permeability in the financial industry might be the result of a top down-process, in which the corporate board initiated a general corporate change strategy that resulted in a digital strategy and the employment of a CDO. Alternatively, customers might demand more digital services (e.g., mobile payment solutions, robo-advise applications), and if these are implemented in a decentralized manner through, for example, different divisions of a bank, a CDO might be necessary if these services become more widespread over time.
Our work also has practical implications for fintech entrepreneurs, banks, and policy makers. Entrepreneurs seeking funds, regulatory advice, or access to customers may find it worthwhile to engage in an alliance with a bank. The form of collaboration, however, may depend on what is most beneficial for both. In particular, our findings show that entrepreneurs in need of capital may be more successful approaching large banks, because they are more likely to invest in fintechs; by contrast, fintech entrepreneurs who want to stay independent but need to reach new customers may favor smaller and specialized banks, which are more likely to engage in product-related collaborations. More generally, banks with a clearly defined digital strategy or a CDO are most likely to be receptive to entrepreneurs’ request to collaborate or for investment.
It is important for banks to acknowledge that there is an upward trend toward hiring a CDO, which may become increasingly important as digitalization spreads across the different segments of the financial industry. However, according to our analysis, most banks still have not recognized the need for a CDO. Hiring a CDO may become more urgent in the future as financial technologies become more mature and the need to engage in alliances becomes more pressing. Financial institutions and policy makers will need to define which competencies CDOs must have and how banks can successfully hire such professionals. Moreover, an increasing reliance on alliances also raises questions about the existing technological infrastructure of banks. To collaborate effectively with a fintech, banks may rely on traditional information networks such as SWIFT or need to develop new suitable application programming interfaces. This again raises the demand for professionals who have experience not only in financial products and services but also in the respective IT infrastructure.
Finally, our work offers practical implications for policy makers who want to foster an acceleration of the usage of digital technologies in the financial sector. Depending on how policy makers want to shape the financial ecosystem, adopting a restrictive granting practice for bank licenses limits growth opportunities of fintechs as independent entities, because many activities (e.g., taking deposits, extending loans) require such a license. The restrictive granting of bank licenses could thus lead to an ecosystem that is increasingly based on alliances. This, in turn, may affect the relative stability, profitability, and, thus, viability of incumbent banks, a development that should be closely monitored by supervisory authorities.
6.2 Limitations and future research avenues
Our analysis also has clear limitations and thus offers avenues for future research. First, we do not examine the duration of bank–fintech alliances. A preliminary analysis of 150 alliances in our sample indicates that 17% ended by 2020. A survey among banks and fintechs, as well as a systematic search on Factiva, showed that alliances were terminated mostly by banks because the banks developed their own technical solutions, the fintechs were sold to a competitor or went insolvent, or the contract or accelerator program came to an end. Future research could investigate what determines the success of bank–fintech alliances and whether the strategic engineering of digital services can be a successful strategy for incumbent players in the financial industry. Although Lerner et al. (
2015) find that the quality of financial patents and financial innovations is often low, bank–fintech alliances might be more successful in generating groundbreaking innovations. Moreover, research on the outcome of bank–fintech alliances would contribute to the recent strand of literature on servitization that investigates the stability and ultimate performance of alliances (Das and Teng
2000; Sjödin et al.
2019; Sklyar et al.
2019). The financial industry is particularly fitting to explore in this respect, because national and supranational regulations are likely to affect the scope, organizational form, and, thus, stability of these alliances.
Second, our study also provides an avenue for future research on servitization (Rabetino et al.
2018). While many banks are currently experimenting with new services, services packages, and alliances with startup firms from the financial ecosystem, whether and how they can systematically develop new services (Bullinger et al.
2003) and how they should combine organizational, technological, and human factors to develop profitable services (Spohrer et al.
2007; Vargo and Lusch
2011) are not clear. Answering these questions likely requires in-depth case studies on individual bank–fintech alliances. Our analysis provides first hints that organizations’ top-level management leads corporate change. However, research is still required to investigate whether top-level management can carry this change process successfully to intermediate- and lower-level managers, who are ultimately in charge of executing the implementation of new digital services and selling them to existing and new clients.
A third future research avenue pertains to the point raised previously that while we consider correlations in our analysis, we do not claim causality. Banks could establish a CDO position because they plan to form alliances in the near future, which would suggest that causality can also go in the opposite direction from what we suggest. Future research might uncover an exogenous shock that would help establish a clean identification strategy for empirical work on causality. Fourth, although we relied on various sources of information to identify alliances, we acknowledge that other sources of information remain invisible to the market, preventing us from identifying all of them. As such, our figures on the number of alliances are lower bounds. Finally, our analysis takes the perspective of banks. Complementary research could explore the perspective of fintech startups’ incentives to collaborate with banks. This perspective is likely to be quite different, as fintechs’ driving force for forming alliances is often to gain access to banks’ large customer base, rather than novel technologies that help foster digital services. This stream of research might uncover why certain digital services are more conducive to development by fintechs rather than by large incumbents.
Acknowledgments
The authors thank Luca Enriques, Alvaro Martin Enriquez, Gerard Hertig, Georg Ringe, Egle Vaznyte, Dirk Zetzsche, Kristin Van Zwieten, and the participants of the 5th Crowdinvesting Symposium (Humboldt University Berlin), the 4th International Conference on the Dynamics of Entrepreneurship (Mannheim University), the International Workshop on Financial System Architecture & Stability (Cass Business School), the 4th Luxembourg FinTech Conference (University of Luxembourg, Banque Internationale à Luxembourg (BIL) and the Luxembourg House of Financial Technology (LHoFT)), the EBI Global Annual Conference on Banking Regulation (Goethe University, European Stability Mechanism (ESM) and Institute for Monetary and Financial Stability (IMFS)), the 26th Annual Meeting of the German Finance Association (DGF) (University of Duisburg-Essen), the 4th Oxford Business Law Blog Annual Conference, and the 1st International FinTech, InsurTech & Blockchain Forum (University of Zurich), where the paper received the best paper award, for their valuable comments and suggestions. They also thank Mareike Staufenbiel and Robert Platow for their research assistance.
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