Competition between Fintech and Traditional Banks in the Era of Data

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This chapter explores how online lenders initially struggled to acquire customers due to expensive capital, and how traditional banks found a way to compete by creating innovative products and leveraging their existing customer base. It also discusses the emergence of new competitors such as Amazon and PayPal and predicts the rise of online small business banks specializing in different verticals.

As technology changes everything, how can existing businesses create innovation and change from within?

Harvard Business School fellow Karen Mills studied how one 200-year-old regional bank in the U.S. used intrapreneurship to develop a completely automated small business lending product to compete with online lenders.

Mills breaks down the case study of Eastern Bank’s strategy for innovation—from its early partnership with a fintech entrepreneur to its eventual spinoff of Numerated, the online lending platform it developed in-house.

Mills is the author of Fintech, Small Business and the American Dream.

Key episode topics include: strategy, business management, competitive strategy, operations and supply chain management, financial service sector, fintech, banking, disruptive innovation.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

· Listen to the original HBR Cold Call episode: Using Fintech to Disrupt Eastern Bank from Within (2018)

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