Boundary conditions moderating the FinTech-profitability relationship
| Boundary condition | Protective effect (Europe) | Vulnerability effect (Asia) |
|---|---|---|
| Regulatory Stringency | High compliance costs function as entry barriers protecting incumbents (ECA, 2025) | Light-touch “sandbox” regulation accelerates competitive entry and market contestability |
| Customer Entrenchment | High switching costs and multi-decade deposit relationships create relationship inertia | Leapfrogging populations lack legacy banking relationships, enabling direct Super-App adoption |
| Capital Depth | G-SIBs possess liquidity to acquire threats before scaling (co-optation pathway) | Capital-constrained incumbents cannot outspend disruptors, forcing defensive competition |
| Boundary condition | Protective effect (Europe) | Vulnerability effect (Asia) |
|---|---|---|
| Regulatory Stringency | High compliance costs function as entry barriers protecting incumbents ( | Light-touch “sandbox” regulation accelerates competitive entry and market contestability |
| Customer Entrenchment | High switching costs and multi-decade deposit relationships create relationship inertia | Leapfrogging populations lack legacy banking relationships, enabling direct Super-App adoption |
| Capital Depth | Capital-constrained incumbents cannot outspend disruptors, forcing defensive competition |