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The rise of financial technology (FinTech) engenders novel business models through integrating financial services and information and communication technologies (ICT). Digital currencies and payments, data mining, and other FinTech applications threaten to radically overhaul the financial sector. This article argues that, while we are becoming aware of how technology giants such as Apple Inc. are making inroads into financial services, we need to become more sensitive to how financial incumbents mimick ICT firms while aiming to neutralize the FinTech challenge. Practices from Silicon Valley are spilling over into ‘traditional’ finance through a process we dub Appleization. We illustrate how incumbents aim to remain indispensable amidst rapid digitization. Mimicking tech strategies, financial incumbents resort to transforming legacy ICT systems into integrated platforms, cultivating entrepreneurial ecosystems where startups are ‘free’ to compete whilst effectively being locked into the incumbent's orbit. We illustrate this by comparing Apple’s business features (locking-in developers, customers and state into a hybrid business model based on a synergy between hardware, software and data-driven platform components) with emerging practices in the financial industry. Our analogy suggests that the Appleization of finance might radically transform, yet not undercut the oligopolistic position of financial incumbents.
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The Appleization of finance:
Charting incumbent finance’s
embrace of FinTech
Corresponding author:
Reijer Hendrikse, Vrije Universiteit Brussel, Cosmopolis: Centre for Urban Research, Department of Geography,
Pleinlaan 2, 1050, Brussels, Belgium. Email:
Reijer Hendrikse, David Bassens, Michiel van Meeteren
Vrije Universiteit Brussel, Belgium
The rise of financial technology (FinTech) engenders novel business models through
integrating financial services and information and communication technologies (ICT). Digital
currencies and payments, data mining, and other FinTech applications threaten to radically
overhaul the financial sector. This article argues that, while we are becoming aware of how
technology giants such as Apple Inc. are making inroads into financial services, we need to
become more sensitive to how financial incumbents mimick ICT firms while aiming to
neutralize the FinTech challenge. Practices from Silicon Valley are spilling over into ‘traditional’
finance through a process we dub Appleization. We illustrate how incumbents aim to remain
indispensable amidst rapid digitization. Mimicking tech strategies, financial incumbents resort
to transforming legacy ICT systems into integrated platforms, cultivating entrepreneurial
ecosystems where startups are ‘free’ to compete whilst effectively being locked into the
incumbent's orbit. We illustrate this by comparing Apple’s business features (locking-in
developers, customers and state into a hybrid business model based on a synergy between
hardware, software and data-driven platform components) with emerging practices in the
financial industry. Our analogy suggests that the Appleization of finance might radically
transform, yet not undercut the oligopolistic position of financial incumbents.
FinTech, financial innovation, platform capitalism, entrepreneurial ecosystem
Any business in any era must be able to rapidly adjust to the ebb and flow of currents in its industry – or,
better still, to anticipate and stay ahead of them. This is doubly true in the digital age, since the pace of
transformation is such that any service provider standing still risks being swept away.
World Economic Forum, 2015
Finance and Society
2018, EarlyView: 1-22
© The Author(s)
doi: TBC
2Finance and Society
Introduction: A FinTech revolution?
At a time when low interest rates are putting conventional banking under stress, the financial
sector is also confronted with the disruptive challenges posed by Financial Technology
(FinTech), which has been gaining momentum since the North Atlantic financial crisis of 2008.
FinTech denotes the digital transformation of financial services, a process unfolding via the
diffusion of Information and Communication Technology (ICT) applications in the field of
finance, ranging from alternative funding platforms (crowdfunding), distributed ledger
technologies (blockchain), high-frequency trading, robo-advice, data mining in finance and
insurance (InsurTech), RegTech, CyberTech, to online payment systems. Typically, a FinTech
application digitizes a specific financial sector function, such as money creation, payment
(security), credit generation, risk management, or asset management. FinTech investments
have risen sharply since the 2008 crisis, with Venture Capital (VC) funding alone accounting
for $25 billion in 2015 (World FinTech Report, 2017: 25). Savvy to exploit FinTech's potential,
both the tech giants (known as the ‘GAFAs’, that is Google, Apple, Facebook, and Amazon) and
a mushrooming FinTech startup scene are determined to transform the financial world.
Meanwhile, FinTech is hyped by the world’s leading consultancies eager to guide their clients
through the announced ‘revolution’ (The Economist, 2015) or ‘paradigm-shift’ (World
Economic Forum, 2015). These developments have also garnered the attention of actors such
as the International Monetary Fund (IMF), which for instance has set up a high-level advisory
group to debate the regulatory implications of blockchain (IMF, 2017).
The epigraph from the World Economic Forum suggests that FinTech is more than just the
latest technology-driven fad in finance. The inroads of tech firms large and small has raised
concerns about the viability of banks’ technologically arcane business models. A quick Google
search reveals that policy discussions on high-level fora – including central banks and other
regulators (e.g. Carney, 2017; EBA, 2017; ECB, 2017) – are centered on the power play
between ‘disruptors’ and ‘incumbents’, such as big banks, insurers, and asset managers.
Disruptors include the GAFAs, but also a growing community of startups, hackers,
entrepreneurs, programmers, and VC firms. The GAFAs are particularly eyed with reverence, for
their grasp and ownership of digital platform infrastructures is deemed unparalleled, as much
as their pecuniary war chests are unrivalled. The GAFAs' digital payment systems (e.g. Apple
Pay, Google Wallet) risk disrupting established channels in which banks are the middlemen.
Moreover, the GAFAs are increasingly teaming up, for instance in lobby groups such as
Financial Innovation Now, to convince regulators to cut the ‘red tape’ hindering their inroads
into the financial sector. The GAFAs are also collaborating in areas like data mining, creating
the world’s leading artificial intelligence (AI) partnership (Mannes, 2016). As the GAFAs offer
their services online (a domain less supervised than traditional banking and finance), level
playing field issues emerge, as new entrants are neither bothered by strict data privacy rules
like incumbent banks are, nor by the costs of retail networks. At a time when incumbent
finance faces a profit-squeeze due to low interest rates and stricter capital requirements,
incumbents with their dated ICT infrastructures increasingly feel the competitive pressure from
tech firms with leaner, more profitable, business models centered on digital technology.
Hypothetically, incumbent finance could be disrupted in two ways. A first scenario projects
the GAFAs having diversified into finance replacing the incumbents, again resulting in a market
dominated by a few players. In the second scenario, technologies such as blockchain, which
help to process and store information in a decentralized way, cut out middlemen altogether,
instead producing an open market for (nearly) free, emancipatory, and more inclusive financial
futures. This latter scenario, in which FinTech startups act as drivers of economic change,
Hendrikse, Bassens and van Meeteren
washing away the incumbents, chimes with Silicon Valley-style technolibertarian ideology and
provides FinTech with a countercultural image in some activist quarters (Golumbia, 2016).
Crucially, as both scenarios have little appeal to financial incumbents, the unfolding FinTech
‘revolution’ places them at a crossroads: do they shield their markets from the inroads of
FinTech firms, or do they seek to collaborate with FinTech startups in order to protect their turf
vis-à-vis the GAFAs? Distributed ledger technologies, for instance, could indeed offer powerful
tools to execute, monitor and secure payment and credit transactions and increase the quality
of incumbent finance's offering. Furthermore, financial services generate troves of data, which
may be mined and exploited after adjustment of the regulatory environment. And lastly,
continuing a path that started in the 1970s, incumbents could intensify their embrace of ICT to
cut costs, raise efficiency, and boost return on equity with 2-3 percent (Financial Times, 2016).
Based on a reading of the swelling number of industry publications, consultancy reports,
regulatory perspectives and media coverage around FinTech, combined with primary insights
derived from our Brussels-based FinTech research, developments in the ‘traditional’ financial
industry suggest that financial incumbents are actively bringing the innovative energy of
FinTech startups into their organizations, in order to internalize and ultimately neutralize the
threat of disruption. Financial incumbents and tech firms small and large are part of two
different organizational fields (Fligstein, 2002; Van Meeteren and Bassens, 2018) – denoted
Fin and Tech – which are gradually merging, with processes of organizational mimicry
(DiMaggio and Powell, 1983) increasingly prevalent. The rapid digitization of economy and
society is spurring the adoption of organizational models and practices based on ‘open’ and
‘networked’ conceptions of the firm (Taylor and Oinas, 2006) in the image of the GAFAs, who
are spearheading the rise of data-driven ‘platform capitalism’ (Langley and Leyshon, 2017;
Srnicek, 2017). Such models and practices, we argue, are diffusing from tech firms to
incumbent finance. This results in financial firms adopting the conceptions of control, which
include the cognitive frame and entrepreneurial culture through which firms compete and
collaborate within an organizational field (Fligstein, 2002: 18), that we normally associate with
the ICT sector. Therefore, while it has become common practice to study the financialization of
corporations such as Apple (Fernandez and Hendrikse, 2015; Froud et al., 2012; Haslam et
al., 2013; Lazonick et al., 2013), and the GAFAs’ embrace of financial services (e.g. Chappuis
Halder, 2016), it seems pertinent to be sensitive to processes working in the other direction –
that is, a ‘GAFA approach’ to financial services (e.g. Accenture, 2016).
Our Appleization of finance thesis proposes that banks are adopting conceptions of
control typical for digital/online giants, such as the GAFAs. While parallels with Google,
Amazon, and Facebook could be made when tracing the adoption of a set of organizational
models and business practices from the tech world, we argue that processes of mimicry
become most tangible when drawing the analogy with Apple's idiosyncratic trajectory of
becoming and remaining an incumbent in the tech field. Apple has historically distinguished
itself from its tech rivals by locking-in a set of key stakeholders whilst creating competitive
advantage by combining legacy systems with new technologies and strategies. In doing so, it
has been able to survive and thrive upon the waves of technological change. Even though
Apple’s death has been announced a number of times already, particularly in the 1990s
(Linzmayer, 2004), the company eventually grew into the most profitable in the world. Apple
did so largely by holding on to business practices that most competitors regarded as old-
fashioned, such as coupling hard- and software (Van Meeteren, 2008), but which turned out to
be crucial in future rounds of innovation when integrated systems required superior
performance. The Appleization of finance thus entails seeking combinations of old and new
business models, rather than solely focusing on a cannibalizing the old.
4Finance and Society
We develop this argument first by placing the rise of FinTech within the merging fields of
finance and technology. In this realignment and power struggle between Fin and Tech,
incumbent finance seeks to roll-out digital ‘open’ platforms that combine ownership of
hardware, software and data, typical of a wider trend of ‘platform capitalism’ (Srnicek, 2017).
Accordingly, we highlight key characteristics of Apple’s evolutionary and hybrid business model
– with an emphasis on the incorporation of platform elements into an historically-grown and
lean-yet-controlled corporate ecology, which is defined by an unrivalled symphony between
hard- and software, ‘locking in’ customers, developers and the state – to illuminate the current
embrace of FinTech by incumbent finance. By drawing on evidence from a wide array of
financial services firms, consultancy reports, regulatory insights and media coverage around
FinTech, we subsequently illustrate how the Appleization of finance entails similar lock-in
practices into banks’ evolving business models. This occurs through integrating legacy hard-
and software systems into novel digital platforms, from which ‘disruptive’ FinTech developers
can subsequently harvest data, and upon which they can build all kinds of new applications.
The analogy allows us to detect incumbent strategies to defend their position as obligatory
passage points (Bassens and van Meeteren, 2015). We conclude by reflecting how these
observations feed back into theorizing the rise of platform finance.1
FinTech and the merging of organizational fields
What happens to the field of finance as it becomes susceptible to digitization? What kind of
intermediaries gain prominence? Who are the new entrants? How are incumbent institutions
responding? And which new forms of collaboration and competition emerge? In order to
broach these questions, we propose to conceptualize the power relations, practices and
embryonic market structures at the interface of Fin and Tech through the economic-
sociological notion of an organizational field. According to Fligstein (2002: 15), organizational
fields are cultivated social spaces that “contain collective actors who try to produce a system
of domination in that space”, necessitating “the production of a local culture that defines local
social relations between actors”. This notion envisages a nuanced structure-agency duality:
fields are imbued with cultures, which structure actor relations and positions within them, but
the approach stresses the importance of individual skills and institutional entrepreneurship in
enacting change (Fligstein, 2001). Fligstein (2002: 16) subsequently applies this theory of
organizational fields to markets, which illuminates how markets are stabilized by economic
actors beyond the price mechanism. This stabilization comes in the form of a shared
‘conception of control’ between participants. A conception of control is a cognitive frame by
which market participants interpret the actions of other organizations. “Markets produce local
cultures that define who is an incumbent and who is a challenger and why [...,] and also
prescribe how competition will work in a given market” (Fligstein, 2002: 18).
Fligstein’s market-as-field perspective counterposes incumbents with challengers, with
the former being able to mimick the latter to reproduce their own power during periods of
uncertainty. It is evident that the growing inroads of tech firms, propelled by the stellar rise of
digital technologies, into the hitherto relatively closed field of financial services generates new
forms of uncertainty. So how can we expect incumbents to respond? One prominent strategy is
copying the business models of disruptors – that is, adapting to the disruptors’ conception of
control. As we will illustrate below, the merging field(s) of finance and tech are marked by
organizational mimicry, resulting in a form of institutional isomorphism whereby incumbent Fin
increasingly mimicks disruptive Tech. As DiMaggio and Powell (1983: 151) note: “When
Hendrikse, Bassens and van Meeteren
organizational technologies are poorly understood, when goals are ambiguous, or when the
environment creates symbolic uncertainty, organizations may model themselves on other
organizations”. This is the process we observe in finance amidst digital transformation: as the
fields of finance and technology evolve in a collated FinTech field, financial incumbents seek
to maintain their positions by copying the key organizational technologies of their challengers.
Finance’s embrace of FinTech in a search for technological rents – or ‘superprofits’
(Mandel, 1975/1972) – is in itself nothing new. FinTech’s rise can be read as a culmination of
the use of ICTs in finance since the ‘the fifth technological revolution’ that started in the 1970s
(Castells, 2000/1996; Perez, 2002).2Initially, ICT allowed cost cutting and productivity gains
through hardware developments, while developments in the 1990s laid emphasis on software
interoperability (Buzzachi et al., 1995). However, it is only since the crisis of 2008 that
financial institutions have sought to build integrated platforms, allowing for the generation,
collection and analysis of- and capitalization upon data. Novel organizational models centered
around ‘open’ digital platforms that are relatively alien to the traditionally closed world of
finance are hereby introduced, allowing incumbents to streamline their (networked)
infrastructures in order to gain or defend market share. Recent thinking on platform capitalism
(Srnicek, 2017) proposes that a (new) mode of accumulation, centered on platform-based
business models geared toward data extraction and valorization, is emerging. Mackenzie
(2017: 2) summarizes several definitions of platforms as “digital infrastructures or
environments that have a zero marginal cost of access”. He subsequently argues that
platforms need to be made through the ‘platformizing’ of practices. In other words, businesses
have to be reshaped according to the logic of the platform, and existing practices have to
reconfigured into these new infrastructures. Platform-operating companies like Google,
Facebook, Uber and Airbnb essentially offer digital infrastructures that mediate between
different groups of users and in return harvest data from those interactions (Gillespie, 201
Srnicek, 2017: 44). These companies capitalize upon data generated on their exclusive
platforms, resulting in monopoly rents as the platform becomes an indispensible intermediary
in economic activity (Langley and Leyshon, 2017). The indispensability of these data-driven
companies results from network effects, as the utility, marketability or value of their platforms
expands with each additional contributor or user (Katz and Shapiro, 1994; Rigi, 2013). The
result in the field of finance is ‘platform finance’, most directly emblemized by the emergence
of new intermediaries such as crowdfunding platforms or peer-to-peer lending networks which
sometimes generate new business activity, but just as easily cannibalize markets dominated
by incumbent finance (see Langley and Leyshon, 2017). Yet, whilst generating concern with
incumbent financial institutions, the power of integrated platform strategies also explains why
FinTech might be interpreted as an incentive for financial incumbents to start mining and
commodifying customer data, which have long remained well protected under privacy and
data-protection laws.
Besides the embrace of platform strategies and technologies, organizational mimicry is
also evident in the way financial incumbents are drawn into ‘open innovation systems’. The
concept of ‘open innovation’ was pioneered in the tech sector to circumvent the cognitive
limits of closed and secretive research and development labs (Dahlander and Gann, 2010). A
whole set of organizational practices was devised in the ICT and BioTech sectors to outsource
and collectivize risks to startups while retaining the capacity to collect superprofits if
innovations were successful. For instance, the notion of VC’s nurturing startups in ‘incubators’
to optimize innovation through interfirm learning and ‘accelerators’ to take those firms quickly
to market to realize superprofits emerged in this sector (Cooke, 2001: 271). Recently, these
practices have been described as ‘entrepreneurial ecosystems’ (Isenberg, 2010; Stam and
6Finance and Society
Spigel, 2018), whereby innovation is conducted by startups, whose risktaking might eventually
be rewarded through a takeover firm or an initial public offering (IPO). This allows for a division
of labor where inventions are done through high-risk, high-yield startups, while incumbents
take care of the valorization (Birch, 2017; Cooke, 2001; Corea, 2015). However, in the long
run, the roles are sometimes reversed. Some innovative small firms that initially specialized in
niches – such as Microsoft, in the case of operating systems – became giant corporations of
their own, controlling large parts of the activity within their respective entrepreneurial
From the perspective of incumbent finance, the prospect of being a horse-and-cart
business in an era of the automobile is not particularly attractive, and the platform model
appears to be a useful tool to help resolve the contradictions between innovation and the
search for stability. As incumbent financial firms, having to cope with their archaic ICT
infrastructures, lack the knowledge to compete with the GAFAs, innovation needs to be
insourced, yet preferably in a controlled way. Studying entrepreneurial ecosystems hence
draws attention to how new forms of collaboration emerge amongst incumbents and startups
to benefit from tech innovations, while neutralizing potential disruptors and stabilizing the
FinTech field in favor of the incumbents. Mimicry involves copying the tech field's conception of
control, wherein ‘open’ innovation systems utilizing incubators and accelerators are the
dominant form. Summarizing, the notion ‘platform’ refers to the infrastructural backbone –
that is, an integrated hard- and software infrastructure geared toward data generation and
extraction – that enables platform finance. The notion (entrepreneurial) ‘ecosystem’, in turn,
refers to a set of actors – entrepreneurs, developers, customers, governments, etcetera – that
are (in)directly involved in the valorization of the platform.
Following our hypothesis, visions of the disruptive annihilation of incumbent finance
might be premature. Instead, integrated platforms operated by financial incumbents
themselves can become the infrastructural backbones of a digitized financial system upon
which novel applications can be built and thrive, not least through interacting via Application
Programming Interfaces (APIs) provided by the platform.3If FinTech startups can be seduced
into improving and utilizing incumbent ICT infrastructures, transforming those into integrated
digital platforms instead of creating new ones, incumbent finance might survive the FinTech
revolution, or even come out as the dominant player in a transformed field. Thus the present
challenge for incumbents is to cultivate a thriving ecosystem of FinTech startups around their
ICT legacy systems-cum-integrated platforms, which are willing to contribute their disruptive
energy to the digital transformation of the incumbent organization, rather than the task of
overthrowing them. FinTech startups, instead of pioneering their own little patch of capitalist
space, must be seduced into working upon and within the established systems of the existing
financial sector, a process reminiscent of how Apple has navigated the same challenge.
Apple’s conception of control
In this section, we provide a short history of Apple Inc., highlighting those characteristics and
features of Apple’s conception of control that, we argue, are increasingly being mimicked in
the organizational field of finance. We stylize Apple’s specific conception of control within the
tech field by foregrounding two interconnected developments. First, we discuss how Apple has
gradually integrated platform elements in its business model. This follows an older notion
about how competition between hardware systems (Apple vs. IBM) and operating/software
systems (Mac vs. Windows) defined platformization before data valorization became the
Hendrikse, Bassens and van Meeteren
driving force behind platform capitalism (see Gillespie, 2010). Second, we discuss the ways in
which Apple has cultivated an ecosystem orbiting around the company’s platform, ‘locking in’ a
wider set of stakeholders (customers, developers and the state) into its corporate orbit.
Integrating a platform
Some forty years ago, during the pioneering years of the nascent ICT sector, Apple started its
rise to global prominence from a garage box in California. What made Apple originally stand
out among tech firms was its democratic appeal, by making computer hardware and software
programming accessible (Linzmayer, 2004). Apple branded itself as a countercultural force,
merging Californian hippie culture with Silicon Valley’s techno-libertarian entrepreneurial spirit
(Saxenian, 1994), aiming to disrupt IBM’s hardware dominance by casting it as a Big Brother
that needed overthrowing. Crucially, however, programming on Apple’s early devices required
specialized skills, limiting mass consumption to a dedicated subculture. From Apple’s
Macintosh (1984) onward, empowering users by making interactions simpler and more
intuitive was prioritized. After leaving Apple in 1985, Apple founder Steve Jobs started NeXT
Computer where the Mac’s design philosophies were also applied in the programming
environment (Van Meeteren, 2008; Hsu, 2015). This was Jobs’ version of techno-
libertarianism: freedom under controlled circumstance, offering a simple set of tools enabling
creativity without deep knowledge of the underlying infrastructure. When Jobs returned to
Apple in the late 1990s, this philosophy was rolled-out through Apple’s product portfolio, with
OS X (for computers) and later iOS (for mobile devices).
What traditionally differentiates Apple from its competitors is the company’s sway over,
and unrivalled symphony between, hard- and software components, realized through
exercising a specific conception of control over its platform. Although Apple outsources
production and assembly to third parties worldwide to focus on its core competencies (R&D,
marketing and sales) like any other global corporation (Froud et al., 2012), Apple also offers a
peculiar reflection of the postwar conglomerate firm:
Apple, as we say, is vertically integrated. It controls all the major critical parts of the chain used to make
and sell products. Apple builds great hardware, owns the core software experience, optimizes its software
for that hardware, equips it with web services … and controls the selling experience. (Bajarin, 2011: n.p.)
The resultant high level of control over the hard- and software package (see Eisenmann et al.,
2008) allowed Apple to integrate data-driven ‘platform elements’ into its pre-existing product
offering.4In this regard, the launch in 2007 of what essentially is a mobile computer
(Greenfield, 2017), the iPhone, proved revolutionary. Besides offering a handheld harmonious
hard- and software interplay operated by a touchscreen, “[t]he iPhone Software Roadmap
included a set of entirely new boundary resources including SDK [software development kit],
APIs, and a distribution channel [the App Store]” (Ghazawneh and Henfridsson, 2012: 182).
Where the OS X operating system had augmented Apple’s success as a software-based
platform, enabling third parties to write applications with relatively simple and affordable SDKs
(Van Meeteren, 2008), iOS (introduced in 2008) took Apple’s platformization a step further.
“We are excited about creating a vibrant third-party developer community around the iPhone
and enabling hundreds of new applications for our users”, said Jobs when the iPhone SDK was
released (quoted in Ghazawneh and Henfridsson, 2012: 182). With the introduction of the App
Store, the exclusive market place for software applications, or apps, modelled after the iTunes
music store for the iPod, “our developers are going to be able to reach every iPhone user”.
8Finance and Society
Cultivating an ecosystem
As Srnicek (2017: 47) argues, fixed architectures like iOS with their accompanying SDKs are
“generative, enabling others to build upon them”. Consequently, this fixed architecture allows
Apple to rely extensively on external developers, thereby capitalizing on the disruptive energy
of third-party startups working on its platform, reaping network effects and externalizing risk-
taking whilst maintaining control. To stimulate the growth of a wider developer ecosystem,
Apple’s operating systems, SDKs, and APIs have been subject to ongoing change, creating
ever more opportunities to build innovative applications, luring in ever more developers. For
example, the iPhone 3GS offered a “radically updated SDK including a multitude of APIs […]
stimulating the increasing diversity of its third-party developers” (Ghazawneh and Henfridsson,
2012: 183). Likewise, the introduction of iOS10 allowed third-party developers more
programming leeway than ever before. In other words, Apple’s operating systems and software
toolkits that define the level of access to the platform are highly dynamic, and with iOS 10,
“Apple is going all in on third-party extensions, and many core parts of the operating system
are now expandable” (Dillet, 2016: n.p.). Yet despite ‘opening up’ its operating system,
platform control firmly remains with Apple, as all publicly available applications must be
Whereas Apple’s policing of its platform and wider ecosystem ran against its erstwhile
rebellious image, to developers this transformation has been acceptable because it resolved a
tragedy of the commons, maintaining a coherent platform that optimized user experience.
Despite some serious criticism – ‘Who is Big Brother now?’ – eventually most developers
found Apple’s behavior legitimate as long as it performed the role of ‘benevolent dictator’ (Van
Meeteren, 2008; Hsu, 2015). It is here that a paradox of freedom and control emerges: Apple
controls all parameters relevant to the platform, with third-party developers ‘freely’ developing
applications within that controlled setting. The notion of a ‘walled garden’ is useful to grasp
this aspect of Apple’s cultivation of a developer ecosystem. The walled garden effectively is a
barrier or checkpoint through which Apple exclusively decides the extent to which developers
can access the operating system, as well as which developers can market their apps via
Apple’s platform. Inside this shielded garden, ‘good’ markets are ‘cultivated’ that are deemed
beneficial to consumers and the platform. In the case of Apple, the walled garden is policed by
determining the specific levels of access by developers into the platform via SDK and API
toolboxes, and Apple’s policing of the App Store. The garden intends to block ‘bad capitalism’
at the gate whilst letting ‘good capitalism’ flourish on the inside.
Taken together, Apple's historically-grown conception of control is one that ‘locks in’
developers and customers, while being supported in a more infrastructural sense by the state.
Concerning developers, Apple controls which applications run on the platform. This allows
Apple not only to capitalize upon innovative outside developers, “to milk the masses for
inspiration” (Bergvall-Kareborn and Howcroft, 2013; 282), but also externalize development
costs and risks of failure, and censor the market via the App Store, the obligatory passage
point for developers that wish to mass-market their applications. This uneven relationship
places developers in a precarious position, whilst Apple controls the platform, taking a 30%
cut of the revenues, which added up to revenues of $20 billion and profits of $6 billion in
2015 (Keizer, 2016).
Second, Apple lures its customers into the App Store by what Montgomerie and Roscoe
(2013) call an ‘own the consumer’ strategy. The business model is designed to drive
consumers in and then hold them there. Network effects assure that the more Apple is able to
convince developers to build applications on the ‘back-end’ of the platform, the more
Hendrikse, Bassens and van Meeteren
attractive the platform becomes to customers interacting at the ‘front-end’, due to a growing
variety of applications. The lock-in is reinforced by the fact that Apple content can only be
played on Apple hardware devices, requiring customers to buy expensive hardware to access
relatively inexpensive Apps. This expensive hardware also implies that iPhone users
experience high switching costs. Furthermore, legal-technological fine-tuning assures that
customers do not own the content they have purchased, but acquire the right to lease it on a
number of devices, rights that are not transferrable outside the platform. By developing
products like the iPod, iPhone and iPad, and by policing the downloadable content through the
exclusive App Store, Apple has been able to lock-in a large customer base, transforming itself
into a true tech incumbent.
Lastly, also in tension with Apple’s traditional image, platform control and its spoils are
enabled by what Mazzucato (2013) has termed ‘the entrepreneurial state’, using its sway to
boost, license and reward ‘private sector’ innovation. Much of the hard- and software
innovation utilized by Apple can be traced back to developments financed by the US
government. It is the state that allowed entrepreneurs to overcome uncertainty associated
with venturing into new areas by taking on the burden of high fixed-cost investments, while the
gains have been privatized. Far from beginning with a tabula rasa, Apple relied on publicly
funded inventions, including the integrated circuit, the graphical interface, and the Internet.
Moreover, Silicon Valley engineers were typically trained at public universities. In addition,
Apple has been savvy in designing tax avoidance strategies (Fernandez and Hendrikse, 2015),
limiting its own contribution to public funds, which could enable future investments in
technologies, and instead pumping up Apple’s share price and dividend payments to its
shareholders (Lazonick et al., 2013). The ways in which Apple has managed to platformize its
hard- and software infrastructure – turning ever more into a data-generating platform, thriving
upon external inputs reaped from a carefully cultivated and controlled ecosystem – is useful
guide to understanding changes currently unfolding in the organizational field of finance, as
the following section will illustrate.
Countering by copying: The Appleization of finance
The trend for fintech upstarts to collaborate with the big banks they once sought to challenge is now so well
established that the boundaries of their business models are no longer clear. (Lee, 2017: n.p.)
As FinTech innovations such as blockchain, digital payments and automated portfolio
management are to remain part of the financial landscape, a key strategy for financial
incumbents is to reverse engineer and mimick the strategies and technologies of their tech
competitors. We argue that the previously outlined features of Apple’s platformization and
conception of control resonates with the emerging practices and strategies of financial
incumbents, and that our analogy provides a framework to understand the strategic moves of
incumbent finance.
Like Apple, many financial incumbents effectively operate hybrid business models. In the
second half of the twentieth century, the most profitable business for financial incumbents
has differed per conjuncture. Whereas in the 1960s and 1970s retail banking was regarded
as the basis of a sound financial institution, from the 1980s into the 2000s diversification into
insurance, merchant, investment and private banking, amidst offshoring and outsourcing
back-office functions, was viewed as the way to go (Van Meeteren and Bassens, 2018). This
resulted in globally operating conglomerate or ‘universal’ banks, combining diverse products
10 Finance and Society
and services with varying costs structures, risks, and rewards, whereby cross-selling and
financing between market segments are important to maintain profitability. FinTech firms
nibble at these portfolios in uneven ways, ideally competing on high-reward/low-cost
submarkets, destabilizing the balance in incumbent portfolios. This provides a clear rationale
why incumbent finance needs to collaborate with FinTech firms. Like Apple, this collaboration
involves a strategy where old and new business practices are combined. Specifically, by
bringing integrated digital platforms into their organizations, incumbents want the best of both
worlds: an open-yet-controlled environment wherein you let loose the disruptive energy of
outside developers. This requires updating and integrating ICT legacy systems, optimizing
synergies between hard- and software at the back-end, culminating in an integrated digital
platform from/upon which a wider ecosystem of developers can harvest data and build, plug-
in, and play ever more FinTech applications to improve customer service at the front-end.
Instead of simply cannibalizing the old, this strategy of transforming legacy systems and
recombining them with platform elements in a quest to lock-in customers, developers, and the
state is what we call ‘the Appleization of finance’. In what follows, we identify three interrelated
instances of Appleization. First, we identify processes of platformization, where incumbents
are collating their systems and businesses to supply new services to clients based on the
interoperability of these services on their platform, a strategy ultimately aimed at locking-in
customers. Second, we show how incumbent finance cultivates a wider ecosystem to draw in
the necessary disruptive innovations and innovators to build, run and expand their platforms, a
strategy primarily aimed at locking-in developers. This form of Appleization takes place at the
level of individual firms, but also in incumbent collectives and regional clusters. In both cases,
conceptions of control historically associated with tech firms are becoming commonplace in
finance. Finally, Appleization at the level of the organizational field refers to wider individual
and collective incumbent strategies to internalize and neutralize the outside threat of FinTech,
particularly the GAFAs, thereby seeking ways to lock-in the state. Appleization here ranges from
local efforts unfolding in specific financial clusters, to jurisdictional initiatives employed by
financial actors/sectors at national or European scales, up to global initiatives.
Platformizing finance, cultivating ecosystems
Why shouldn’t banks also transform themselves into digital ecosystems in order to strengthen the ties with
their customers by offering a wide range of financial services from a single source? Established financial
institutions are transforming themselves into a digital platform-based banking ecosystem. (Dapp, 2015: 5)
Ever since the beginning of the ICT revolution, financial incumbents have adopted a range of
hard- and software systems. Programmed hardware systems initially stood alone, then
gradually became interoperable within the firm, powered by software developments. Under the
logics of platform capitalism, these legacy systems, having accumulated troves of data, are
today being transformed into integrated digital platforms, which accordingly can be ‘opened
up’ to outside developers to ‘plug and play’ their applications. As noted in a study on the
digitization of finance by PricewaterhouseCoopers, incumbents are increasingly becoming
‘self-disruptors’, as the majority of financial-sector respondents put disruption at the heart of
their strategy (PwC 2017a: 6). In particular, large banks are devoting big amounts of capital to
tech innovation, with JP Morgan spending $9.5 billion, or 16 percent of its 2017 budget: “[t]he
company has more than 40,000 technologists, and roughly 18,000 of them are developers
creating intellectual property” (Macheel, 2017: n.p.). Incumbents across the globe have set up
Hendrikse, Bassens and van Meeteren
FinTech incubators and accelerators, more or less ‘open’ labs bringing outside developers into
their organizations. Under the guise of the incumbents, these start- and scale-ups either
develop stand-alone applications to better connect with customers at the front-end, or build
solutions to streamline the existing hard- and software infrastructure at the back-end, which
typically represents “a curious mixture of the old and rickety and the sleek and modern” (The
Economist, 2017: n.p.).
As a Deutsche Bank report argues, a general aim is to generate a “harmonious interplay
between implemented hardware and software” within the bank, and between the bank and its
customers by developing novel “monetarization strategies” (Dapp, 2015: 1). Reminiscent of
Apple’s App Store, which is accessible through Apple’s hardware devices, banks aim to build
integrated digital platforms to lock-in customers. This is done by offering customers new
services, optimized through customer data, and by expanding their fee-based business. The
Deutsche Bank example captures a wider trend in (retail) banking, where issues of cost
reduction through automation and digitization are appealing, as well as the use of FinTech to
avoid disintermediation and even open up new digital markets. To realize the harmonization of
hardware and software, “financial institutions are concentrating on updating their legacy
systems with a strong focus on data analytics and mobile technology” (PwC, 2017a: 9) – i.e.,
the key drivers of platform capitalism. Building proofs-of-concept is a key focus, and executives
from the sponsoring incumbent are typically closely involved in the process. Take JP Morgan’s
‘in-residence’ incubator/accelerator program, where startups ‘co-create’ solutions with
incumbent employees and executives:
True innovation in wholesale banking and capital markets requires deep access, open collaboration, and
iterative proofing. Combining innovators who are exploring the edges of what is possible with the unique
resources of a global bank can accomplish this innovation. This is what In-Residence does. (JP Morgan,
2018: n.p.)
Hence incumbents ‘open up’ their organization to outsiders, but only after having been
carefully brought in, with startups typically having to sign confidentiality agreements to adhere
to the codes of conduct or ‘operating system’ of the sponsoring incumbent. Crucially, however,
the aim of bringing in disruptive outsiders is to update the incumbent’s cultural and
organizational setup. As the head of innovation and FinTech at BNP Paribas argues:
“Intrapreneurship, the act of behaving like an entrepreneur while working within a large
organisation, is a golden nugget for every large financial institution” (Nunes, quoted in Swift,
2017). Resultantly, change is being realized by bringing the innovative energy of FinTech
startups into incumbent organizations (PwC, 2017b).
The exact process varies from firm to firm, reflective of respective legacy cultures and ICT
systems, resulting in tailor-made FinTech accelerators and incubators. Moreover, financial
incumbents operate multiple ‘in house’ accelerators and incubators throughout the various
financial centers in which they are active, each unique in setup and specialties. For instance,
the ING incubators in Amsterdam and Brussels are respectively specialized in business-to-
customer (B2C) and business-to-business (B2B) solutions. Such incubators are often backed
by a web of dedicated business services intermediaries including accountancy, consultancy,
and law firms. Typically incumbent incubators take a slice of equity in or give seed financing to
their startups. Angel investors and VCs (operating independently, yet often with incumbent
funding) lubricate linkages within the accelerators or incubators, i.e. between financial
incumbents and disruptors. In so doing, in similar fashion to Apple, developments costs and
financial exposure/risk are externalized.
12 Finance and Society
FinTech firms typically plug into incumbent systems via dedicated APIs, enabling a
controlled interaction between the two systems. In contrast to Apple, the hard- and software
legacy systems operated by financial incumbents are of different ages, brands, capacities,
programming languages, and so forth. Crucially, however, the aim is to turn this “spaghetti of
systems” into one platform (Claerhout and Lijense, 2015: n.p.), as if commanded by a single
operating system. Typically, this is done by creating an integrated middle layer, bringing
together back-end systems via a set of internal APIs onto a single platform, which
subsequently can be accessed by third parties via a set of external APIs (Ingels and De Waele,
2017). The more a bank has upgraded its legacy systems for data harvesting, the easier it
becomes for third-party developers to plug into the bank’s platform via a simple SDK-like
toolbox (comprised of external APIs) and build applications, making the platform more
attractive for customers on the digital front-end, and less attractive for customers to switch to
other financial services providers.
In opening up their digital infrastructures, financial incumbents need to decide on the
extent to which outside developers can get into the incumbents’ core digital platforms, where
issues like cybersecurity and profitability are major issues. Put differently, incumbents need to
think about the ways in which they will lock-in a larger ecosystem of developers and customers
around their integrated platforms. Similar to Apple, degrees of ‘closed- and openness’ of the
incumbent’s platform are variable and dynamic. For example, Barclays offers “two broad
classifications” for the API gateways to its platform: “open versus restricted”, denoting “the
nature of the API function”, as well as “self-registration and invitation required”. These levels
of access allow Barclays “to carefully control access to APIs and their different aspects, which
is prudent given the nature of the work we do here as a regulated financial institution”.5
Nevertheless, managing levels of access resembles a walled garden-like mechanism, allowing
trusted entrepreneurial ventures to experiment with new innovative ways to do finance.
PricewaterhouseCoopers (2017b) recently identified a set of strategies which incumbent
banks might pursue, ranging from ‘closed’ to ‘open’ strategies when it comes to the degree in
which FinTech outsiders are allowed on their platforms. Besides reasons of efficiency,
customer service, and data security, banks also need to think carefully about the ways in
which they can (in)directly capitalize upon their Appleization strategies. A Deutsche Bank
research team, for example, argues that capitalizing upon digital transformations is easier
realized in closed rather than ‘open corporate structures' (Dapp, 2015: 8). Yet other
incumbents view open structures as the way to go, allowing the mushrooming of a wider
ecosystem of third parties to develop applications on their platforms, in the expectation that
this will improve customer service, hence locking in the customer:
BBVA is kickstarting the launch of its open banking program by making eight of its APIs commercially
available ... The launch of BBVA API Market comes after the Spanish bank spent more than a year working
with developers and businesses to optimize the way the Open API service would be delivered. In opening up
with APIs like this, BBVA has become one of the first major banks in the world to deliver open banking – a
move which is intended to lead to significantly increased products and services for customers and clients.
(Semple and Fernandez, 2017: n.p.)
At present, most banks are still at a beta or sandboxing stage, testing the extent to which,
ways by which, and to whom, they will ‘open up’ their platforms. Yet however closed or open
the respective strategies of the incumbents will eventually become, the general aim is, like
Apple, to maintain optimal control over the process. This being the case, financial incumbents
are also collaborating to maintain control of the FinTech ‘revolution’.
Hendrikse, Bassens and van Meeteren
Appleizing the organizational field
In London, Berlin and San Francisco, many FinTech innovators are betting against the big banks. Singapore,
typically, is trying to play both sides of that bet. It wants a thriving FinTech industry that supports, rather
than undermines, incumbent big banks … The idea is to combine the cost-effective nimbleness of FinTech
with the trust, solidity and customer base of mainstream banks. (The Economist, 2017: n.p.)
To navigate the rapidly changing organizational field of finance, financial incumbents not only
compete with one another, they also collaborate to deter the threat posed by FinTech.
Incumbent finance collectively tries to recompose the rules of the game and conditions for
being an ‘insider’ in the organizational field. The result is that incumbent finance's way of
engaging with FinTech opportunities is legitimate, while actors that flaunt these collectively
defined rules of the game are held at bay (Fligstein, 2002: 18). Resultantly, a walled garden of
sorts is also erected at a sectoral level, something which historically defines finance due to its
reliance on state regulators, as well as the role of central banks in defining exclusive
membership. Here too, we observe that incumbents seek to collectively ‘enclose’ or lock-in
FinTech firms and developments by bringing them into their orbits. Incumbent finance is
collectively searching for new digital standards – a set of shared codes, innovations and tools
to optimize network effects. It is not the first time banks have come together to collectively
develop new technologies; the emergence of Swift as an interbank joint venture is a case in
point (Scott and Zachariadis, 2012). Concerning our research, we observe that certain FinTech
incubators operated by individual banks like ING are, in turn, located, clustered, and nested in
larger joint ventures setup by multiple financial institutions, with the aim to formalize
connections between startups and incumbents, and bring emerging FinTech ecosystems into
incumbent orbits.6Joint ventures set up by incumbent financial institutions are typically setup
to explore, cultivate, and pursue common interests. The collaborative FinTech company B-Hive
adjacent to Brussels Airport, for example, rents out office spaces to FinTech startups, offers a
space within which financial incumbents like ING can setup their incubators, and organizes
FinTech events and meetups – all in anticipation of network effects.
Crucially, some of these collective efforts, in and of themselves, do not function as
incubators or accelerators, but are better viewed as ‘industry initiatives’ through which
incumbent financial actors create spaces within which they maintain contact with one another,
with FinTech firms, and with different entrepreneurial ecosystems. Through collective efforts
incumbent finance seeks to gain insight from- and control over the growing field of FinTech
startups, aiming to lock-in developers and other stakeholders like state representatives
around their digitizing business models. Financial infrastructure firms such as Swift,
‘lubricating’ VCs, and business services firms are also involved in cultivating collective efforts,
creating a larger networked corporate community. Mirroring the setup and anticipating the
premises of platform capitalism, these collective office spaces breath an air of ‘openness’,
which is crucial for cross-fertilization and network effects, tying together a mushrooming
FinTech field that is ultimately cultivated and controlled by incumbent finance itself.
The ways in which such industry initiatives are set up differ considerably. There exist both
top-down and bottom-up initiatives, yet financial incumbents tend to join both (Ginsel, 2016).
We might also tentatively include project-based initiatives, both nationally (e.g., the creation of
the IDEAL payments system, built by Dutch banking incumbents) and globally (e.g., the R3
project centered on distributed ledger technologies [blockchain], involving a growing list of
globally operating incumbents).7Furthermore, where certain initiatives are defined by a more
strategic nature of aligning interests of the organizational field as a whole, there also exist
14 Finance and Society
more operational hands-on collective co-working spaces, of which Level39 in the London
Docklands – the “largest technology accelerator for finance, retail, cyber-security and future
cities technology companies” – is a well-known example.
Owned wholly by the Canary Wharf Group, Level39 launched in March 2013 … Located in the heart of
Canary Wharf, Level39 is uniquely positioned just minutes away from the decision makers of key financial
institutions. The world’s leading banks and consultancies tackling billion-dollar problems. Our
entrepreneurs are in the heart of the action, developing the technologies to solve these issues. (Level39,
2013: n.p.)
Canary Wharf is comprised of large office towers, leased by incumbents such as Barclays,
Citi, HSBC and JPMorgan. Likewise, the real-estate firm Canary Wharf Group is owned by
incumbent financial players. Similar initiatives exist or are being rolled out throughout the
world’s leading financial centers. While some collective initiatives were initially setup for
strategic reasons – to cultivate relations, articulate common goals, and represent the industry
as a whole – some of these are evolving into operational hubs not unlike Level39 (see Ginsel,
2016, on the case of Amsterdam). These location-bound joint ventures, seeking to cultivate
FinTech developer ecosystems servicing incumbents instead of challenging them, are set up to
revamp existing financial centers as FinTech hubs – i.e., as key nodes in global networks of
financial innovative practices (Amin and Thrift, 1992; Van Meeteren and Bassens, 2016). As
there is competition among financial centers, so there is competition among clustered joint
ventures that seek to represent the organizational field or sector as a whole – all seeking to
capitalize upon anticipated network effects – and often incumbents sponsor a multitude of
these initiatives.
Lastly, FinTech collectives also reach out to one other across borders, some of which
having signed bilateral memorandums to enhance cooperation, augmenting their respective
reach whilst effectively creating a giant ‘network of networks’ through which financial
incumbents aim to bring FinTech ecosystems into their orbits.8In fact, there now exists a
Global FinTech Hubs Federation, bringing together FinTech hubs and networks worldwide.
Interestingly, the aforementioned Swift is the main driver behind this global initiative which,
amongst other things, aims to ‘standardize knowledge (Global FinTech Hubs Federation,
2016). Having brought interbank communication and payments from the telex onto computers
in 1973, and having developed hard- and software to streamline its services ever since, Swift
now monitors data-driven developments, not least the rise of distributed ledger technologies
like blockchain, which theoretically could make ‘the old Swift' redundant. Again, the goal here
is to maximize control over innovation, and ultimately set new global standards which
reconfirm rather than undercut the sway of incumbent finance. Like Apple, incumbent finance
does not want to be absorbed by a Silicon Valley-based meta-platform. Ideally, incumbent
finance wants to become the world’s leading financial meta-platform itself.
To this end, some field cultivation occurs beyond cluster or hub level, instead taking place
at a jurisdictional level. For there are financial interests which are best defended together vis-
à-vis the state at different scales. The Appleization of finance, therefore, also signifies the
grooming of- and capitalization upon a broad regulatory environment conducive to the
financial industry’s incumbent-yet-evolving business models. As we recall, besides locking-in
customers and developers, Apple has also proven very capable of locking the state into its
orbit. We see a similar trend unfolding regarding incumbent finance’s embrace of FinTech, for
they too are enjoying/seeking public support to advance the enclosure of FinTech firms to
maintain incumbent positions, whilst in parallel seeking to minimize their fiscal duties.
Hendrikse, Bassens and van Meeteren
The MAS [Monetary Authority Singapore, added] has vowed to invest S$225m ($158m) in FinTech by the
end of 2020. Sopnendu Mohanty, its FinTech guru, says he wants to attract fewer ‘disrupters’ than
‘enablers’. He hopes FinTech can help banks by cutting expenses and opening up new sources of revenue,
through products that can slot into banks’ front- or back-office systems. (The Economist, 2017: n.p.)
Around the globe, financial incumbents are pushing politicians and regulators to make
way for FinTech through fiscal policy and regulatory changes, aiming to create a level playing
field with the lightly-regulated GAFA’s. In practice, this includes calls to allow the set-up of
‘regulatory sandboxes’ to create a state-approved ‘beta setting’ to test one’s applications.9
Some regulators prove more willing to create and experiment with sandboxes than others (see
Deloitte, 2017), thereby playing a key role in “forging innovation hubs to increase accessibility
to start-ups, clarity around the authorization process, and to help inform reform” (Cockerton,
2016: 42). At the same time, financial incumbents are pushing state actors to maintain
regulations as barriers of entry to keep the GAFAs and larger FinTech threat at bay. Banks are
particularly obsessed with maintaining barriers to obtain banking licenses, which prevents
GAFAs from taking on deposits, enjoying deposit insurance and accessing central bank
liquidity. In short, financial incumbents ideally want regulators to create the freedoms that tech
firms enjoy in areas like data privacy and product testing, whilst at the same time protecting
their turf by pushing regulators to maintain strict regulations. While FinTech firms will be
allowed to offer their services based on banking data, provided that these firms are licensed
by regulators and customers give their consent – see Second Payment Services Directive
(PSD2) (European Commission, 2015) – they are not allowed to offer basic bank accounts,
which remain highly regulated domains. The implication is that, as of writing, FinTech has
made significant inroads into the realm of payments (43% of business, see McKinsey and
Company, 2015: 2), but much less so the deposit, credit or asset management functions.
Nevertheless, the introduction of regulations like PSD2 will accelerate if not force incumbent
finance’s evolution towards ‘open’ digital platforms: to keep the outside threat of FinTech at
bay, incumbent’s better self-disrupt and transform, cultivate developer ecosystems and
nurture their preferred FinTech applications themselves, sooner rather than later.
Like Apple, financial institutions have geographically organized their activities to minimize
tax (Fernandez and Hendrikse, forthcoming). Where jurisdictions like Ireland and Jersey
effectively function as Apple’s tax shelter (Fernandez and Hendrikse, 2015; Drucker and
Bowers, 2017), financial incumbents are similarly pushing governments to setup tax shelters
to bring FinTech startups into their jurisdictional orbits. For example, the ‘Digital Belgium’ plan
involves a tax shelter for FinTech start-ups, novel conditions for crowdfunding, employment
subsidies, and fiscal benefits for FinTech investors (Fintech Belgium, 2015). Likewise, France
has created a beneficial fiscal and regulatory environment for FinTech firms, offering grants,
tax credits, subsidies, tax shelters, and so forth, whilst having a pro-active financial regulator
who has “responded positively to innovation in financial services with lighter regulation of non-
banking entities” (Clot and Pailhon, 2016: 46). Meanwhile, EU regulations like PSD2 stimulate
(self-) disruption (Brunsdon, 2016) as part of building a single market for digital services
(Milne, 2015). The debate on this scale also relates to the wider geo-economic positioning of
the EU vis-à-vis the inroads of US tech giants, coinciding with an explosive political collision
over the fiscal responsibilities of Apple (Barker and Beesley, 2016). Ultimately, the battle for
state support entails a discursive struggle over which types of institutions are to be trusted
with the responsibilities associated with financial intermediation. In that context, many
regulators deem it irresponsible to go all-in with tech newcomers who typically speak a
different ‘language’ than is common in gentlemanly banking circles. Ironically, European
16 Finance and Society
financial incumbents are managing to take the higher moral ground even though they were
deeply embroiled in the questionable activities that led to the 2008 crisis.
Conclusions: Towards platform finance?
This article has offered a conceptual take on the proclaimed revolutionary character of the
impact FinTech is having on incumbent finance. We argue that conceiving the rise of FinTech
as the gradual merging of two organizational fields, whilst paying attention to processes of
organizational mimicry, allows for an appreciation of the diffusion of conceptions of control,
business practices, and models from Tech to Fin. Resultantly, platform-based conceptions of
control, pioneered in the Tech world, make inroads into finance. However, while the ‘platform
capitalism’ literature offers insights into the way leading digital platforms realize superprofits
from data harvesting and valorization, this literature remains economical in debating their
impact on sectors beyond the realm of tech firms proper. Put differently, the debate on
platform capitalism primarily focuses on avant garde platform companies like Google and
Uber, and with good reason, but has had little to say about the ways in which other
organizational fields are playing catch up. This article has sought to fill this lacuna.
Since the 1970s, the global economy has been incrementally interlaced with ICTs, and
few tech firms have integrated hard-, software and data-driven platform elements into a
coherent business proposition more seamlessly than Apple. It is this evolutionary, hybrid and
superprofitable business formula that is now being mimicked elsewhere. Reading
contemporary ICT-related changes in the financial industry through the analogy with Apple
allows us to start projecting the anticipated impact of the FinTech revolution for financial
incumbents. It is important to recall here that Apple started as tech disruptor, yet has
managed to become an incumbent as the ICT revolution unfolded. We observe similar
chameleonic behavior in finance: at a time when tech giants are entering finance, financial
incumbents are embracing the technological-organizational practices of their disruptive
challengers. Financial firms, individually and collectively, are extending their sway over FinTech
developments, aiming to enclose disruptive FinTech developers and customers around their
emerging digital platforms and accompanying ecosystems, whilst pushing the state to guard
their privileged positions.
The Appleization analogy raises many empirical questions about strategies at play when
the organizational fields of Fin and Tech merge, which we deem productive in formulating
future research questions. Without doubt, our heuristic has its limits. For one, financial
incumbents are behaving like VC firms, adhering to- and investing in a range of digitization
strategies, in the hope that one or two of these will prove successful. Yet despite such
disclaimers, the ways in which unfolding developments across the financial sector resonate
with some of the key practices and strategies pioneered and perfected by Apple are hard to
ignore. Having said this, our Appleization thesis also speaks to a particular moment in time, in
which legacy systems and strategies are updated to the platformed logics of today. In other
words, although reverberating with ‘timeless’ capitalist dynamics like enclosure and exclusion,
the notion of Appleization is perishable, as it captures the historical point at which incumbent
finance is transmuting into incumbent platform finance, trying to catch up with developments
spearheaded by Silicon Valley.
To conclude, although we do not neglect or reject the revolutionary potential of FinTech as
such, for the time being our findings suggest that the latest technological wave, as before, is
being enclosed by incumbent financial capital, by encircling outside threats and internalizing
their logics. Despite the promise of techno-libertarian disruption prevalent in FinTech
Hendrikse, Bassens and van Meeteren
communities, the reality is that the prime playground of the Tech field proper, i.e., the Internet
itself, is marked by rampant digital enclosure, with the GAFA’s monopolizing their respective
fields of business. If the analogy holds, the implication would be that, instead of heralding the
last days for incumbent finance, Appleization may in fact be a strategy to even further reinforce
its lucrative position as an obligatory passage point, whilst realizing cost reductions at a time
when regulations are viewed as burdensome. For financial centers, in turn, this is a strategy to
remain relevant under digital modes of intermediation. Somewhat ironically, outside
challenges by platform capitalists have laid bare the intrinsic platform-based nature of finance,
which can now be completed by drawing in financial technologies. The consequence would be
that digitization will not lead to a radical process of disintermediation, resulting in a more
decentralized and democratic form of finance, as techno-libertarian prophets would preach.
Instead, it would produce an ever-more concentrated organizational field of tech-savvy
financial institutions locking-in customers, developers, and the state. Not discounting the GAFA
threat, it appears that incumbent finance, countering-whilst-embracing the disruptive forces of
FinTech, might maintain pole position in the field of tech-driven finance. The question of
whether this will lead to more just and stable financial futures should concern us all.
This paper was presented at the first Intersections of Finance and Society conference in
November 2016. We thank the editors of Finance and Society, their reviewers, and our
Financial Geography Network peers for their encouragement and support. We also thank Chris
Muellerleile and Callum Ward for their valuable comments on an earlier version of this article.
Research for this article was supported through Innoviris Grant BRGEOZ289 and FWO
Research Grant G019116N.
1. The value of conceptualizing current ICT-related developments in finance through this notion was
also debated in a number of eponymous sessions organized by Desiree Fields and Chris
Muellerleille at the annual RGS-IBG geography conference in London, August 2017.
2. We follow Perez (2002) in her sequential naming of technological revolutions. Others call the
current moment ‘the fourth industrial revolution’ (e.g. Srnicek, 2017).
3. An Application Program Interface (API) offers a set of routines, protocols and tools to build software
applications which access the features or data of an operating system, application, or other
service. In essence, an API specifies how different software components interact. Most operating
environments provide APIs, for example bundled in a Software Development Kit (SDK), allowing
programmers to write applications consistent with the operating environment.
4. Interestingly, Srnicek (2017: 134) explicitly excludes Apple from his exposé on platform capitalism.
He argues that although Apple “has some platform elements to its business”, the “consumer
electronics producer” generates the vast majority of its revenues through iPhone sales, realized
through production outsourcing. Consequently, “Apple is more akin to the 1990s Nike business
model than the 2010s Google business model”. Nevertheless, for us the very introduction of
platform elements into existing hard- and software environments is crucial to what we are calling
the Appleization of finance.
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6. This research takes places in Brussels, investigating the (spatial) makeup and organization of
business services, including finance, in the metropolitan area. The joint venture set up by
18 Finance and Society
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wider functionality of the computer system if that is not necessary for the application to function.
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... Indeed, the dichotomy between 'fintech' and 'mainstream finance' (Langley and Leyshon, 2017a) might be a false one that offers little analytical utility, as we observe the growing convergence between fintech firms and traditional financial institutions. Responding to the fintech threat, incumbent finance has sought to mimic fintech strategies by leveraging on platforms to deliver products and reach new market Tan segments (Hendrikse et al., 2018). For example, Singapore's DBS Bank has introduced its Paylah! ...
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Fintech is celebrated for its disruptive and democratizing qualities that dis/reintermediates the finance value chain. Claims of a ‘fintech revolution’ assume that fintech is ‘disruptive’ because of its innovative capabilities, but the extent to which these disruptive forces have reconfigured consumer financial knowledge and practices is not well understood. Using a questionnaire to survey retail consumers in Singapore on their use of fintech in performing different financial tasks, this article critically examines these claims of disruption and democratization by grounding them in the financial behaviors of consumers as informed by a financial ecologies approach. The results show a limited impact of fintech in shaping consumer financial behaviors. Respondents use fintech mainly for basic transactional purposes like making mobile payments and account management, but not so much for more complex matters like savings, investing and credit. The findings also reveal a ‘stickiness’ in financial behaviors that emphasizes the high touch points of human interaction. This study illustrates fintech’s variegated material outcomes by highlighting the unevenness in consumption of digital financial services and the enduring importance of human relationality in financial decision making.
... According to the opinion of the representative of start-ups (R1), "banks ensure the reliability of the start-up and thereby attract new consumers to its services." The position of banks can be described as the Appleisation of finance (Hendrikse, 2018), whereby incumbents aim to transform legacy systems into integrated platforms, cultivating ecosystems where start-ups are "free" to compete whilst effectively being locked into the bank's orbit. The configuration contrasts with the empirical findings of Hornuf, Klus, Lohwasser, and Schwienbacher (2021), indicating that banks in Canada, France, the UK, and Germany tend to cooperate with FinTechs through alliances rather than acquisitions. ...
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PURPOSE: The purpose of this study is to investigate the role of actors and ecosystem conditions in the development of the FinTech ecosystems in Tallinn and Moscow. METHODOLOGY: The study develops a framework for investigating entrepreneurial ecosystems, combining ecosystem actors with ecosystem conditions. The framework is implemented through a comparative case study of FinTech ecosystems in Tallinn and Moscow, with data drawn from 35 semi-structured interviews and processed by means of thematic analysis. The primary data is supplemented with data from secondary sources. FINDINGS: The findings show how the ecosystem conditions and actors are interdependent in the FinTech ecosystems. Tallinn is an example of a strong entrepreneurial culture with its small market, advanced technological infrastructure, and talent, which leads to the dominance of the FinTech start-ups and the emergence of an active FinTech cluster organization. In Moscow, the institutional context, concentration of financial capital, and its large home market with a loyal customer base limit start-ups' ability to grow and form the ecosystem. IMPLICATIONS: The study contributes to the literature on entrepreneurial ecosystems and emerging technologies by integrating the streams of research on entrepreneurial ecosystems and FinTech ecosystems, combining FinTech actors with entrepreneurial ecosystem conditions. It also highlights the implications of variations of entrepreneurial culture, characteristics of the domestic demand and formal institutions in the development of ecosystems. It demonstrates that ecosystem conditions are likely to contribute to the emergence of the dominant actor in a particular ecosystem. Our results also suggest that when aiming to develop the FinTech ecosystem in a city, the support given to FinTech cluster organizations is essential. Facilitating university-industry cooperation through the cluster organizations or direct partnerships can contribute to the development of FinTech ecosystems. ORIGINALITY AND VALUE: To our knowledge, this is the first study to illustrate how specific entrepreneurial ecosystem conditions lead to configurations with different types of ecosystem actors, and to illustrate how specific ecosystem conditions impact the way in which actors develop and operate and how the ecosystem configuration is structured. These have been notable omissions in extant entrepreneurial ecosystem research until now. The present study also illustrates sectoral variations in entrepreneurial ecosystems while highlighting the distinct features of emerging ecosystems. It also contributes to the emerging literature on FinTech ecosystems through a comparative empirical perspective, thereby enhancing understanding of local conditions necessary for developing and maintaining FinTech ecosystems in different contexts.
... But dissemination of this financial intelligence, in which transactions form the basis of citizens' digital risk profiles, is not generally associated with privacy and proportionality (exceptions are works by Dehouck and de Goede, 2021;Mitsilegas and Vavoula, 2016;Riemslag Baas, 2021). Financial information is increasingly used by commercial companies (Westermeier, 2020), such as by so-called FinTechs: companies that primarily develop and apply financial technologies (Hendrikse et al., 2018). But, the use of these data by public actors such as the FIU remains obscure. ...
Purpose In 2019, FIU-the Netherlands celebrated its 25th anniversary. This study takes the occasion to reflect on the role of the FIU in financial surveillance and to describe its core practices of collecting, analysing and disseminating financial intelligence. Design/methodology/approach Because FIU practices are often secret and its transaction data classified as state secrets, the FIU’s daily operational activities remain obscure. Drawing on interviews, public reports and an online training course, this study encircles secrecy and offers a fine-grained analysis of the FIU's core activities. Findings The article finds that the FIU plays a pivotal role in financial surveillance because it can operate at various intersections. An FIU operates at the intersection of finance and security, in between the public and private sector and at the national and international domain. This pivotal role makes the FIU indispensable in the surveillance of payment systems and spending behavior. Social implications The article poses that the desirability and effectiveness of financial surveillance has to date not received sufficient consideration, while it affects (the privacy of) anyone with a bank account. The article asks: is it ethically justifiable that transaction information is declared suspect, investigated, and shared nationally and internationally, without the individual or entity concerned officially being notified and legally named a suspect? Originality/value This case-study is not only relevant for the study of finance/security, AML/CFT and financial surveillance, but also to policy makers and the broader public who merit an understanding of how their financial behaviour is being surveilled.
... 1-completely wrong; 2-wrong; 3-rather yes than no; 4-true; 5-absolutely true Hendrikse et al. (2018) Equal terms of competition The actors of an FE compete on equal terms in the region. 1-completely wrong; 2-wrong; 3-rather yes than no; 4-true; 5-absolutely true Brush et al. (2019) Initiative of entrepreneurs The social values in the region encourage FinTech founders' self-sufficiency and personal initiatives. ...
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This paper aims to examine the interplay between the attributes of the FinTech ecosystem (input) and productive entrepreneurship (output) in Russian regions. A survey was used to gather data from FinTech representatives in ten selected regions located in Russia. The acquired responses allowed measuring the FinTech ecosystem attributes by calculating the FinTech ecosystem index. Correlation analysis was used to analyse the association between the FinTech ecosystem index and productive entrepreneurship, as measured by the number of FinTechs. Data envelopment analysis was used to determine regions with more productive entrepreneurship given the ecosystem attributes. The FinTech ecosystem index defines a similar environment in the analysed regions for financial sector entrepreneurship. The regions have high values of physical infrastructure, demand, and talent, while new knowledge and networks appear as weaknesses. Still, Moscow has the highest and Chelyabinsk the lowest FinTech ecosystem index. There appears a positive link between FinTech ecosystem attributes and productive entrepreneurship. The Moscow and Chelyabinsk regions are also revealed as the regions that effectively create an environment for productive entrepreneurship from the position of the Fintech ecosystem index. This study contributed to the existing literature by measuring FinTech ecosystem attributes and productive entrepreneurship, investigating the relationship between them and determining the territories with productive entrepreneurship. It also contributed to Russian FinTech literature by being the first to measure the environment for financial sector entrepreneurship.
This paper examines Sino-UK financial relations in the fintech sector. Through an empirical focus on fintech payments systems, the analysis locates fintech within broader research on the internationalisation of Chinese finance. Conceptually, the paper responds to calls for more attention to be paid to state actors in fintech development. By examining the relationship between the UK and China in fintech, as part of the UK's wider role in Chinese financial internationalisation, I argue that such a focus on the state needs to be expanded beyond the current focus on domestic policy to include wider questions regarding how fintech sits alongside overseas and international policy concerns. I suggest that one productive way of doing this is to understand fintech as a monetary infrastructure. In so doing, the paper argues that fintech needs to be understood as much as a monetary geography as it is a financial geography.
The COVID-19 pandemic has led to a sudden jump in the digitization of financial services. Today, the financial sector is the target of disruptive action by a number of FinTech companies that are innovating and changing financial services. Since 1995, the term disruptive innovation has become widely used to describe the way of operating and market conquest of many, primarily technological, start-up companies that have achieved global success. This chapter goal is to give a clearer view of the way FinTech companies are changing the financial industry and how FinTech innovations are disrupting financial markets and tend to eliminate existing established financial companies. FinTech companies offer services that reach neglected market segments and were initially perceived as a small threat to established companies. A significant market share is taken by fully digitalized financial institutions that offer products and services that provide high level of satisfaction and low costs. Although traditional financial companies try to keep pace with technological changes by introducing new digital services, the entry of global technology brands into the financial services market further complicates their position. Traditional financial companies tend to develop a collaboration strategy with FinTech companies to bridge the technology gap and survive in the market.KeywordsFinTechDisruptive innovationDigital disruptionFinancial industryStart-ups
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After the boom: Finance and society studies in the 2020s and beyond
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Platforms are important actors in contemporary cultural economic processes. They include social network sites, online content management systems, streaming media platforms, mobile communication infrastructures, supply chain logistics solutions, and cryptocurrencies. Analysis of platforms and their capitalization should take into account the ways they structure social practice as assets and the constitutive opacity of platforms as configured realities. It explores capitalization by focusing on the problems of counting people and things on platforms. Via a case study of the software repository platform [] (, it analyzes how 'platform numbers’ participate in capitalization. It describes attempts to enumerate the elements of the platform by counting, mapping or listing them. The paper shows how attempts to enumerate people and things encounter forms of association, duplication, combination, imitation and configuration that are crucial to the ensemble but remain refractory to capitalization. It proposes configurative enumeration of the platform numbers as a way of conceptualizing these un-enacted excesses. In a configurative enumeration, the composition, the rhythms of imitation, variation and commutation, and constant relating, repairing and adjusting of configurations crucial to the ongoing formation of platforms come into view. Configurative enumerations engage the inventive realities of platformization, realities that precede and sometimes overflow their capitalization.