Strategic coupling between finance, technology and the state: Cultivating a Fintech ecosystem for incumbent finance

Reijer Hendrikse, Michiel van Meeteren and David Bassens
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Reijer Hendrikse: Vrije Universiteit Brussel, Cosmopolis: Centre for Urban Research, Department of Geography, Belgium
Michiel van Meeteren: Vrije Universiteit Brussel, Cosmopolis: Centre for Urban Research, Department of Geography, Belgium; Loughborough University, Geography and Environment, School of Social Sciences and Humanities, UK
David Bassens: Vrije Universiteit Brussel, Cosmopolis: Centre for Urban Research, Department of Geography, Belgium

Environment and Planning A, 2020, vol. 52, issue 8, 1516-1538

Abstract: The rise of Fintech challenges established financial centres and incumbent financial institutions to rethink their strategies to remain obligatory passage points in the age of digitizing finance. To appreciate these changes, it is important to maintain theoretical interchange between developments in financial geography and economic geography, its parent discipline. In this paper, we argue that the ways in which evolutionary economic geography impacts strategic coupling in global financial networks are crucial to grasp tomorrow’s geographies of Fintech. Through an in-depth examination of Brussels, we analyse the potential of Fintech opening a window of locational opportunity in financial services. Belgium has put together a strategy to seize this window by leveraging its politically neutral image and Brussels’ existing niche in financial collaboration and infrastructural plumbing. The latter status is exemplified by the presence of global players SWIFT and Euroclear. We analyse how Belgian entrepreneurs and politicians assess Brussels’ locational resources, and strategically couple big financial institutions with small tech startups in order to cultivate a Fintech ecosystem in the service of incumbent finance, constituting a Fin-Tech-State triangle. As such, we document and analyse how the coalescence of finance and technology offers new opportunities for second-tier financial centres, while highlighting the difficulties in reaping these in practice.

Keywords: Fintech; economic geography; strategic coupling; financial centres; digitization; innovation systems; Belgium; Brussels; financial geography; ecosystem (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:52:y:2020:i:8:p:1516-1538

DOI: 10.1177/0308518X19887967

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