Factors attracting banking investment into fintech start ups: Russian context
One of the main problems for any start up is to find funds for the idea development, product/service creation and promoting it in the market (Binks Ennew, 1996) In Russia banks form the main demand for fintech products and services. However, there is a belief that Russian fintech ecosystem is not well developed. This research aims at exploring which barriers for fintech start up ecosystem development are present in Russia as well as necessary and sufficient conditions for a fintech start up to attract bank as an investor in the context of Russian experience. Qualitative interviews with experts of Russian financial industry, including representatives from banks, a regulatory institute, IT corporations (n=32) as well as quantitative survey of fintech start ups (n=37) provide data for this research. This study uses crisp set Qualitative Comparative Analysis (csQCA) to examine the presence of complex causality relationships between factors describing fintech start up and receiving investment from banks. Major findings of this research corroborate the belief that Russian fintech start up ecosystem is weakly developed. The one reason for that is the gap between what fintech start ups offer and what market actually needs. Necessary condition for receiving bank?s investments according to crisp set QCA is having a business plan. Other conditions this research explores are sufficient and include: having a core competence in market and consumer understanding, income source as a commission per transaction, payments related start up?s products or services, not aiming at owning the business while doing start up project and also readiness of the product or service. The sufficient conditions might be absent or present in certain configurations. Finally, in Russia banks finding start up offerings unsatisfactory choose not to invest in them or to create incubators but rather develop fintech internally. This research contributes to the literature on QCA (Ragin et al. 2006; Skaaning, 2007) as well as financial technologies (Shim Shin, 2016) and develops knowledge on fintech start ups in particular.