Finch Platforms: Integrating Trust, Analytics and Automation in Finance
We present three related frameworks for creating and defending FinTech-related businesses. The first, introduced in Dhar (2016), is useful for identifying which operations and businesses are (or are not) attractive targets for automation as well as for predicting the future trajectory of these targets. The second framework, introduced in Stein (2016), can be used to determine whether a target analytics application of interest is one for which a firm has a competitive edge. Conversely, the framework may be used to identify “killer apps” for specific proprietary data or analytics tools. The third framework, introduced in Dhar and Stein (2017, 2918) provides a roadmap for the development of defensible FinTech platforms by first defining the necessary conditions for such a platform to be sustainable, and then describing the vectors along which incumbent financial firms and/or new entrant technology firms may create such FinTech platforms. Complete FinTech platforms allow easy participation that often strengthens and extends network effects, while at the same time, the vast amounts of data captured through such participation can increase the value of the platform to participants, creating a virtuous cycle. While initially slow to penetrate the financial services sector, such platforms are now beginning to emerge. The framework provides a taxonomy of such complete and incomplete platforms in finance and FinTech, and identifies the feasible strategies available to incumbents in the industry, innovators, and the major Internet giants.