Financial Innovation in the Digital Age: Preparing Management Students for Fintech Disruptions

The Importance Of Digital Finance

Digital finance means the effect of technologies on financial services. It comprises various products, applications, and business models that have altered the conventional way of offering financial services. Investment in new technologies has increased. Machine Learning, Artificial Intelligence, and Mobile Applications are introducing new business models that financial institutions establish (Chen and Bellavitis, 2020).

Customer experience has become increasingly significant for financial institutions. Even the banks are lending various innovative services such as data analytics, peer-to-peer lending, robo advisors, blockchain-based solutions and artificial intelligence. As per the study by Accenture, almost 75 per cent of consumers prefer having a digital bank. In this regard, the competition is fierce as all the Fintech start-ups are jeopardising the traditional banks with innovative and agile financial products and services (Yu et al. 2019). This calls for the importance of digital finance that the financial banks shall introduce and stay competitive in the ever-evolving financial landscape. The future of finance, no doubt, is digital. Thus, digital finances improve efficiency and reduce costs.

The Importance Of Financial Innovation

All financial services and products have been accessible with the help of financial innovation. UPIs and ATMs have revolutionised how the banking facility is used. The entire investment and financing function has altered the way. Innovation in the area of finance has changed how market participants and institutions are effective in offering services to customers. In addition, the sustainability of financial institutions is increased by financial institutions (Yu et al. 2019). Financial products and services are promoted as economic activities are liberated by innovation. For instance, the use of UPI is easier compared to the use of credit and debit cards.

Types Of Financial Innovation

Financial innovation has three types: system, process, and product. In other words, financial system innovation helps build new financial practices, which comprises blockchain and cryptocurrency technology. However, process innovation comprises the improvement and adherence to the new age that leads to the effective functioning of financial operations. This is one of the common types of financial innovation (Yu et al. 2019). For instance, the online application., token systems, biometric verification, and authorisation are the various types of innovation related to the process. While innovation related to products includes the inception of products in the finance ecosystem. Advancement of the financial system depends on daily innovation and the market participant’s responses. The various types of product innovation are UPI, credit card, debit card, mobile banking, UPI and various application-based systems.

Is financial innovation beneficial for the economy?

Financial innovation is related to increased economic growth, which also controls the indicator of financial development. Financial innovation leads to economic growth through financial intermediation, capital mobilisation and formation. Initiating resources into the financial systems helps improve financial services and performance (Palmié et al. 2020). Besides this, it also helps to develop capital market developments, resulting in expedited economic growth. In other words, a sound financial structure helps encourage the country’s technological advancement. Every financial innovation requires a valuable capital market as it helps assign the limited resources that further reduce the financial costs. Financially innovative firms grow rapidly. This innovation assists the firms in enhancing their skills, expanding their markets and practising their leadership skills per the market’s demands (Palmié et al., 2020). Financial innovation not only brings development in the baking sector services but also helps improve the enterprises and institutions and the non-banking sector services. Also, financial developments help distribute credits between the enterprises, which develops the effectiveness and performance of the investments. It also brings about improvement in the factor productivity by reducing the discrepancies that are found in resource allocation.

An excellent financial innovation never supports risk-taking in abundance. It only allows the decentralisation of the risks. In addition, it is also noted that real credit affects the entire economy. If all the credit starts flowing into one sector, the entire sector will face a boom. On the other hand, the sector where the entire credit is not flowing will face a bust. Thus, the financial sector ensures that resources are distributed proportionately among all sectors of the economy. However, it has been found that financial innovation sometimes does just the opposite (Palmié et al., 2020). It can create the congestion of resources for some sectors of the economy. Another disadvantage of financial innovation is that it does allow excess debts. The expansion of credit cards can be taken as a case study. Before the initiation of credit cards, households were not that indebted. However, with the emergence of financial innovation, credit card companies are giving enticing offers to customers that give rise to irrational spending.

Preparing Management Students For Fintech Disruption

Fintech or financial technology helps in improving and automating financial services. Preparing the management students in the Fintech disruption effectively teaches them machine running, data-driven finance modelling, cloud computing, AI and blockchain. When students acquire these skills, they can effectively participate in problem-solving, programming, teamwork and spreading financial knowledge. All across the world, the fintech industry is booming, and over the years, this market has continued to grow. Thus, Fintech has been regarded as a popular choice for graduates (Palmié et al. 2020). After graduating with the FIntech degree, students can specialise in any of the cutting-edge areas of finance, such as machine learning, digital currencies and blockchain applications.

Financial services organisations and industries use technology to transform their business. This includes network security, chatbots, AML pattern detection, and fraud prevention.
One of the massive shifts in the banking service is fintech disruption. After getting their fintech degree, management students can pursue their careers in the baking sector. They can help users invest in stocks and crypto niches, creating a platform to help in stock trading. This has transformed the traditional financial institution. As a response, the fintech disruption has introduced various noteworthy trends such as cybersecurity and the black chains. Almost 60 per cent of banking executives believe that banking services have been made more significant due to fintech. In addition, 77 per cent of financial institutions plan to expand innovation to develop value.

With the help of Fintech disruptions, banks have become more customer-centred in their model. After their fintech graduation, management students can gain more insight into Artificial intelligence and Big data. In addition, they can focus on the specific financial process that refutes the traditional banking system of hooking the customers. Fintech disruption has enabled customers to keep faith in banks. After their Fintech management, students will believe that customers are their top priority. In addition to this, Fintech disruption also helps in more branding. This is why Fintech firms are implementing new and innovative approaches to promote branding. An instance of this is gamification, which uses game-like elements in the non-game context. Banks such as Revoult, ikaano Bank, Monoband, and Fortune City are disruptive fintech apps that shape their branding with the help of gamification.

It has also been noticed that financial services have blurred the boundaries of the industry. It has also provided a gateway to entrepreneurship, thereby helping promote financial inclusion. Fintech disruption has revolutionised the firms that deliver financial products. Also, consumers are increasingly adopting fintech services because of their reduced costs and convenience. Although the financial activities have encroached on the bank’s activities, the financial sector has remained small. This is because, in the lending market, the fintech’s reach is small.


  • Chen, Y. and Bellavitis, C., 2020. Blockchain disruption and decentralised finance: The rise of decentralised business models. Journal of Business Venturing Insights, 13, p.e00151.
  • Yu, W., Jacobs, M.A., Chavez, R. and Yang, J., 2019. Dynamism, disruption orientation, and resilience in the supply chain and the impacts on financial performance: A dynamic capabilities perspective. International journal of production economics, 218, pp.352-362.
  • Palmié, M., Wincent, J., Parida, V. and Caglar, U., 2020. The evolution of the financial technology ecosystem: An introduction and agenda for future research on disruptive innovations in ecosystems. Technological forecasting and social change, 151, p.119779.


1. State the significance of digital finance.

Ans: Digital finances help strengthen the competition and efficiently supply innovative services and products. It helps in giving access to real-time information about financial management systems. Furthermore, it helps in better decision-making by making all the financial information accessible.

2. What are the different types of digital innovation?

Ans: Financial innovation has three types: financial system, process and product innovation. All this helps create investment and financial products, processes and services. Financial innovation helps in equity and credit generation, risk management and updated technology.

3. What is the importance of digital innovation?

Ans: Digital innovation helps amplify efficiency and streamline processes, which helps increase productivity and helps businesses save a great deal of money. It helps in the development of new technology and the implementation of new software.

4. Do you think financial innovation is important for the economy?

Ans: Financial innovation is important for the advancement of the financial sector. It helps produce developed patent methods, innovative financial products, reduced investments, and an expedited rate of capital generation.

5. Are FinTech courses significant for the students?

Ans: Pursuing fintech courses can help students in numerous ways as it helps in opening a wide variety of career opportunities, increases their technical skills, and provides in-depth knowledge about financial innovation. Furthermore, it helps in fostering entrepreneurship and extending global opportunities for them.

Author Bio: Mark Edmonds has over 15 years of experience teaching finance and management courses at the university level. His research focuses on the impact of financial technology and innovation on the future of business education. Mark joined Academic Assignments and enjoys helping students understand the rapid changes taking place in the fintech sector by providing finance assignment help. He holds an MBA from London Business School and a PhD in Finance from the University of Oxford. When he’s not teaching or writing, Mark enjoys staying active by cycling and running.