PURPOSE: The traditional sources of financing (bank loans) cannot be treated as an essential source of financing for SMEs in developing countries. For this reason, this group of entities uses many alternative sources, from bootstrapping to microfinance and crowdfunding. During the last decade, a significant contribution in this area has been financial technology. The purpose of this study is threefold: 1) to present the role of financial technologies in financing SMEs, 2) to examine the role of entities based on financial technology in financing SMEs in developing countries, and 3) to consider other non-bank aspects of financing SMEs, leading to the improvement of the financial situation of these entities. The in-depth analysis of these entrepreneurial finance practices will be developed in the following papers presented in this Issue. METHODOLOGY: This study employs a theoretical approach based on a narrative literature review. The primary attention is focused on applying financial technology as a stimulant for the finance of SMEs in developing countries. FINDINGS: As a consequence of the financing gap for SMEs within the traditional financial system, these entities use non-bank financing based on financial technology. The research confirms that financial technology plays a crucial role in fostering the financial situation of SMEs in developing countries and providing greater financial inclusion for these entities. Both, financial technology and enterprises based on this technology contribute significantly to the improvement of efficiency of financing SMEs in emerging markets. They also provide a broader range of services, than were offered by the traditional financial sector. Regarding the other aspects of SME finance, it is essential to implement such ways of financing like microfinance services and crowdfunding. Such funding mechanisms, together with the budget process and the compliance under the conditions of e-tax systems, are important determinants of current entrepreneurial finance. IMPLICATIONS: The paper describes the financing of SMEs in developing countries. The in-depth picture of the SME’s financial situation, focusing on the technological development in this area, provides essential insight into this still poorly explored area. It also offers important premises for shaping the post-pandemic policy to support their further growth. ORIGINALITY/VALUE: Despite growing theoretical and empirical literature about entrepreneurship finance, this study aims to contribute to the role of financial technology in this area. The impact of financial technologies and the role of fintech-based entities on SME activity in developing countries are still poorly researched. Moreover, the research provides a brief overview of other SME funding sources and their determinants in this group of countries.

Purpose: The aim of this paper is to develop a theoretical framework of the transformation of the bank's scope driven by fintechs.Design/methodology/approach: The conceptual foundations for a comprehensive transformation of the bank governance through financial technologies (fintechs) are underexplored. In order to develop such foundations, the authors adopt transaction cost economics (TCE), the concepts of external enablers and a modular organizational design, as well as a systematic literature review.Findings: The results point to three scenarios of the banks' scope, depending on the adopted technological mechanisms and related effects that change the characteristics of organizational activities, justifying new bank boundaries. The most advanced application of fintechs results in a modularized network scenario leading to the emergence of financial ecosystems.Research limitations/implications: The proposed micro-perspective of decisional rules in an individual organization is unique in the current literature that predominantly focuses on the banking sector at large. The identified scenarios are valuable for solid theoretical and empirical grounding and can be further exploited in decision simulations and empirical studies.Practical implications: The proposed theoretical framework points to the rationales and consequences of adopted technologies for the boundaries of a bank organization.Originality/value: This paper provides three contributions to the literature on technology-driven transformations of organizations with a focus on banks. First, the authors elaborate a theoretical framework for establishing the bank's boundaries in response to the expansion of financial technologies. Second, the authors add to the knowledge accumulation in the area of organizational transformations based on the ICT adoption, in particular, to the literature on the modular organizational design. Third, the authors contribute to the decision-maker practice by proposing the alternative options of banks' scope transformed through fintechs.

PURPOSE: The paper aims to identify the characteristics of the entities involved, the motivations and the processes of forming strategic alliances between a small cooperative bank and a fintech start-up. The paper bridges the research gap in the literature and explains the success factors of strategic alliance between considered entities. METHODOLOGY: We applied a typical qualitative research approach that consists of two steps. The first step was to develop an analytical framework to understand the critical success factors for the strategic alliance formation between banks and fintech start-ups. In the second step, we applied the analytical framework for a case study analysis, considering the strategic alliance between the Banca Popolare di Cortona and the NetFintech start-up. FINDINGS: Our research shows that there are different motives for strategic alliance formation for banks and fintech start-ups. From a theoretical point of view, banks’ motivations are based on outsourcing, innovation, the evolution of the business model, competitive advantage, saving costs, improving service quality, and learning. The main motives for fintechs include access to customers, loans, banking license, economies of scale, trust, and credibility. In the empirical part, we found that the crucial success factors are strategic alignment and hybridization, competence and experience, cultural value and territorial closeness, and professionalism. IMPLICATIONS: The results develop the knowledge about the best conditions for cooperative banks and fintech start-ups strategic alliances. The main limitation is that the paper is based only on one case study and it is related to cooperative banks and does not embrace other groups of banks. For this reason, it can be a basis for further research in this area. The described case study can be a good example to compare other cases of such alliances. Cooperative banks and fintech start-ups involved in a strategic alliance should share the commitment at the governance level. Critical are also the procedures of the alliance formation. ORIGINALITY AND VALUE: This article provides two main contributions to the literature on the technology-driven transformations of the banking sector. First, we elaborated a theoretical framework of the critical success factors for the bank and fintech start-up strategic alliance formation. Second, we applied the framework with the bank–fintech start-up cooperation in the local market in Italy. Contrary to previous research, which focuses mainly on commercial banks, this article presents the relationship between cooperative banks and fintech start-ups.

PURPOSE: The banking sector is under intense pressure from digitalization. One of the accompanying processes is the development of digital platforms and platform ecosystems in banking services. The paper aims to present the dynamic pattern of behavior among partners stemming from the tensions between governance costs and co-created value within platforms in banking services. METHODOLOGY: The study employs an approach based on a systematic literature review of 54 publications selected from Scopus and WoS databases. We applied an approach that consists of two steps. The first step of the research was a literature review and critical analysis of the sources related to our research questions. In the second step, we propose a causal loop diagram research procedure, which is a research system dynamic tool used in modeling system dynamics. FINDINGS: There are different types of platforms, and among the most important are blockchain-based and cloud-based platforms. In both types, the relations between owners, complementors, and customers are important. The tension between governance costs and co-created value informs behavior patterns among platform partners. The degree of interconnectedness between platform participants and the level of centralization of banking services depends on the platform type. The study highlights that blockchain-based and cloud-based platforms play a significant role in the transformation of the current banking services. The choice of platform type has important implications for the platformization of banking services. IMPLICATIONS: The pattern of behavior among platform partners identifies the self-reinforcing dynamics that suggest how managers can navigate the tension over time amidst the asymmetry of benefits and risks. The research findings can be informative for financial regulators and they help work out a policy that reduces the asymmetry of benefits and contributes to the more sustainable development of digital platforms. ORIGINALITY AND VALUE: This paper addresses the paradox perspective on the banking sector changes during the intensive processes of digitalization and the creation of new ‘platform ecosystems.’ This topic has not been studied in this context so far.