Facilitating innovation in FinTech: a review and research agenda

The purpose of this paper is to carry out content analyses on the existing literature to investigate the knowledge state of innovation facilitators adopted to promote financial innovation. In total, 56 papers were analysed using the NVivo software package. Three categories of innovation facilitators emerged from the literature capturing the perspective of regulators, incumbents and new entrants. Each identified instrument is defined and its processes and implications described. Many initiatives were led by regulators, revealing a regulatory strategy change from risk-based to opportunity-based regulation, with regulatory sandboxes being the most commonly adopted instrument. Incumbent-led innovation facilitators were also identified and typically took the form of corporate incubation models, co-working spaces, venture funds and innovation platforms to support financial institutions with partnerships, acquisitions or self-development. Lastly, the literature review revealed innovator-led instruments to support start-ups with raising capital. Based on our results, we discuss several important observations and propose avenues for future research capturing each of the identified perspectives. This paper contributes to incubation research and the financial innovation and FinTech literature streams.