Fintech Thesis Q&A: Kristian Taagaard Nielsen and Simon Staun

Kristian Taagaard Nielsen and Simon Staun sat down with Copenhagen Fintech to discuss their Fintech Thesis, which examines how incumbent banks can effectively implement FinTech innovations from start-ups by identifying challenges in the implementation process and proposing solutions to address these challenges. Obtained in June 2024 from 丹麦哥本哈根商学院 – study program: Organizational Innovation and Entrepreneurship

Fun facts about Kristian & Simon:

Kristian: ??? “I bought my own dog (a pug called Obelix) when I was 14 years old,” Simon: ??? “I am way too interested in College American Football for some odd reason.”?

What was your topic, and why did you choose it?

Kristian and Simon revealed that their research focuses on the role of innovation implementation in realizing the great potential that FinTech innovations provided by start-ups can have for incumbent banks.

"By exploring the challenges occurring in innovation implementation and the mitigating mechanisms that can be applied to address these challenges, our research provides an overview that can hopefully help future implementation processes of FinTech innovations within incumbent banks." ??? Kristian Taagaard Nielsen& Simon Staun.

Early in their process, they had conversations with and visited Copenhagen Fintech . "We were quickly intrigued by the collaboration between these seemingly contrasting entities of well-established traditional banks and younger FinTech start-ups."

A thorough review of academic and industry sources highlighted the need for a more detailed exploration of innovation implementation processes by identifying the internal and collaborative challenges that can hinder these efforts.

What are the key findings of your study?

• Through the extensive collection of data from 7 Danish banks, we found that innovation implementation activities are vulnerable to internal and collaborative challenges that can severely affect the implementation effectiveness of a given FinTech innovation. Internally, the data suggested that challenges mainly occur through two types of resistance: the employees and the structural setup. Dealing with employee resistance, the incumbents must raise overall employee safety and involvement by incorporating targeted users in decision-making processes and incentivizing innovation use through managerial support and patience.
• Secondly, we argue that Danish banks should ensure complete ownership through the implementation phase and align goals and expectations with those of different departments. From a collaborative perspective, we found that higher levels of risk & regulation and misaligned collaborations had a strong negative impact on the success of the implementation activities.

Overcoming such obstacles, we argue that incumbent banks must ensure a well-aligned collaborative set of expectations and goals, seek to develop collaborative engagement, and address regulatory impediments by conducting a continuous due diligence process and/or reallocating risk elements toward the startup.?

What are the recommendations from your study?

Our research humbly suggests incumbent banks can potentially optimize their innovation implementation processes by:

1.???? Adopt a more Decentralized Structure: Encourage decentralized decision-making to facilitate faster and more effective implementation of innovations.

2.???? Enhance Employee Involvement: Implement structured feedback mechanisms and promote a culture of open communication to engage employees and reduce resistance to change.?

3.???? Foster a Supportive Implementation Climate: Develop and maintain an organizational climate that rewards innovative practices and ensures that innovations align with the values of the employees and the company.?

4.???? Fully engage with the startup: Allocate more resources to the collaborative aspect of the implementation activities, as the somewhat large differences in culture, risk profiles, and decision-making processes can greatly impair the effectiveness of implementation if not accounted for.

5.???? Be supportive: Typically, startups need more resources to fully understand the legal aspect of operating within the financial industry. Thus, we encourage banks and startups to be more open about their capabilities and success criteria and fully support each other to ensure that objectives can be fulfilled.

Future ambitions career-wise?

Kristian: ??? "Currently, this is a question I ask myself and hear from others frequently! I find myself continuously curious about the Danish startup ecosystem. I hope to find a position within it that allows me to promote Danish innovation and its ideal influx into well-established organizations. Helping and working with people has always been the core focus of my professional motivation."

Simon: ??? "My main passion lies in optimizing internal processes and innovation within larger corporations. For some reason, I always try to optimize whatever I do, and I have taken this approach with me to work. If all goes well, I hope to find a position to work with the incorporation of innovations provided by startups and help find solutions to any problems that may arise in these processes."?