Using big data for finance is a trend at the centre of the UK financial sector. The emerging financial services sector is commonly termed ‘fintech’ and while it includes firms in retail financial services, risk analytics and aspects of extensive payment systems, a major element of it focuses on the use of big data and the algorithms appropriate to transform datasets into marketable tools.

There are growing expectations about the potential economic value and innovation that may emerge from big data. The financial services sector has been traditionally a data-intensive industry, as described in an earlier book of Jonathan Liebenau. Even so, the age of big data has opened a new landscape for emerging businesses based on cutting-edge technologies: equity platforms based on crowd funding, new platforms that match lenders with borrowers in innovative ways, data visualisations tools to follow companies, suppliers and clients, and a whole range of new payment systems based on mobile and cloud technologies. These transformative players include early innovators as well as established financial firms who provide big data-related services that are shaking up the traditional financial markets.

Our research project pilot in 2013-2014 compiled and assessed a series of case studies of UK companies in fintech. The study included the following areas; crowd funding (CrowdBank), peer-to-peer lending (RateSetter), innovative payment platforms (The Currency Cloud) and novel open banking applications (The Open Bank Project), among others.

The aim of the pilot research project was to focus on the issues raised by the expectations associated with the management of big data in the finance sector. Our starting point was in June 2013, when we held an LSE workshop on big data and new business models with a special session on the financial services. With the presence of key players in industry and academia, participants discussed potentially disruptive innovations in financial businesses and examined how new business models find access to the incumbent players in the sector.

Our pilot research provided insights into new and innovative data-driven business models in the sector. Using a systemic approach, we aimed to answer a simple yet very powerful question: how is big data transforming the financial services sector? Our aim was to understand the main components, evolutionary patterns and emerging dynamics of fintech businesses as well as how big data access, transformation and consumption are enabling this process.

Although for this pilot research we focus exclusively on the financial services, we also seek to explore what patterns and business models may be common to other sectors, such as media, health, advertising and utilities that are trying to create and exploit value from big data.

The study found that the companies we looked at share the following common characteristics:

  • They occupy less straightforward positions within the banking IT legacy system and carve new niches that span products and services. Some take advantage of cluster and modular systems integration, others use intensive exploitation of current services under performance to provide novel IT solutions (i.e. white box systems that can be purchased as a whole or by components to setup stock trading or money exchange online companies).
  • They usually emphasise the relationship, fostering customer flexibly. Firms build flexibility into their business models. Also there is a stress in fast adaptability to changes in current procedures or methods to asses value and/or credit (i.e. using in parallel to traditional credit rankings for traders, reports from and, on traders sales).
  • Firms enter the market using data handling technologies that lower entry barriers and exploit novel business intelligence (i.e. big data analytics).

We see the development of modular emerging business as the natural step on the provision of banking services. The emergence of these new businesses is significant because they bring innovation to the sector generally. Thus, the modular character of the new digital landscape forms close links between fintech and the use of the open internet. Finally, this convergence is anchored in the emerging hybrid internet of mobile data, private data transport, peering and other new internet architectural forms and business models.



  • This article was originally published in the LSE Department of Management’s blog and is based on the paper Modularity and network integration: emergent sustainable services in mobile payment systems, co-authored by Silvia Elaluf-Calderwood, Jonathan Liebenau and Carla Bonina, in: Sprague Jr., Ralph H. , (ed.) Proceedings of the 2014 47th Hawaii International Conference on System Sciences (HICSS). CPS Conference Publishing Services & IEEE Computer Society, Los Alamitos, California.  
  • Silvia Elaluf-Calderwood presented the work at the FT banking meeting in New York in 2015. Jonathan Liebenau contributed to the Bloomberg study ‘London: digital city on the rise’ and also is an active member in the discussions with the FCA and other regulators in regard to fintech companies. Carla Bonina (now at University of Sussex) is currently following up a research proposal with the EPSRC to further study modularity in the emergent sector.
  • This post gives the views of its authors, not the position of LSE Business Review or the London School of Economics.
  • Featured image credit: LSE Department of Management

Silvia Elaluf-CalderwoodSilvia Elaluf-Calderwood is an Associated Research Fellow at Oxford Brookes University. She worked for 9 years at the LSE (Departments of Media and Communications and of Management) in various research roles. She holds wide experience in the telecommunications industry in the UK, USA and the Netherlands and has a technical and managerial background in internet and telecoms businesses.


Jonathan LiebenauJonathan Liebenau is a Reader in Technology Management in the LSE Management Department. He specialises in fundamental concepts of information, and the problems and prospects of ICT in economic development. He has provided consultancy services to leading companies and strategic government agencies, including Dell, BT, IBM, Microsoft, TCS, Nortel, EDS, Lloyd Thompson, and in the UK Government, the Office of Science and Innovation, the Department of Trade and Industry and the Home Office.