Drivers, processes and consequences of financial innovation: a research agenda

Abstract

It is self-evident that financial innovation is a key player in the contemporary economy. However, its significant importance has largely been overlooked in innovation studies. To fill up this gap, and through an interdisciplinary approach, this article details a research agenda for innovation in financial services. It reviews the 'what', 'why' and 'how' of financial innovation in order to clarify all the ambiguities surrounding its nature, creation, purpose and impact. Specifically, the article investigates its definition and distinguishing features, its key determinants, its supporting processes, and finally its effects, mainly at firm-level. Therefore, the article opens the black box of financial innovation and uncovers its peculiarities in order to understand how it occurs when innovation is considered both as an 'outcome' of financial innovation and a 'process' supporting its creation.