REDWOOD CITY, Calif. and NEW YORK,

June 21, 2017 /PRNewswire/ --

Retail banking has long been a tech-intensive industry. However, a new study from the Clayton Christensen Institute for Disruptive Innovation, in collaboration with Tata Consultancy Services (TCS), examines the competitive impact of recent digitized banking products and services, and how "FinTech" providers – which have few similarities to traditional banks – are attacking virtually every product category in banking. In a four part series titled, "Banking on Disruption,"

Subhajit Das

and

Aroop Gupta

, Visting Research Fellows at the Christensen Institute from Tata Consultancy Services, use the theory of Disruptive Innovation – the process by which new entrants use technology and innovative business models to provide less expensive, simpler and more accessible services – to assess the impact of FinTech on three retail banking segments: payments, wealth management and lending.

The study shows that in each product category, new entrants pose a competitive threat to banks, but the conditions are not always ripe for disruption. Instead, many FinTech innovations are being launched to sustain or improve existing products, making them attractive for both new entrants and existing banks. Therefore, as long as incumbent banks are incentivized to adopt these solutions, rather than ignore them, disruption could be less of a factor. But this does not mean disruption is impossible, particularly if FinTech entrants are able to scale up from a foothold in an underserved market.

"Whether FinTech entrants or incumbent banks, individual organizations must make a careful assessment of the disruptive and sustaining potential of innovations in their respective industry," said

Subhajit Das

, co-author of the reports. "Doing this will enable them to stay ahead of their immediate competition and thrive in this period of change." "The consumer lending space is where we see the most significant threat today, with the current wave of innovation and new entrant competition having the most impact on consumers," added

Aroop Gupta

. The full study can be found at www.christenseninstitute.org/publications/retail_banking.

The Clayton Christensen Institute for Disruptive Innovation

(www.christenseninstitute.org) is a nonprofit, nonpartisan research organization dedicated to improving the world through disruptive innovation. Founded on the theories of

Harvard

professor

Clayton M. Christensen

, the Institute offers a unique framework for addressing complex social issues like education, healthcare, and economic growth.