The Impact of Digital Transformation on Sourcing Strategies in the Financial Services Sector: Evolution or Revolution?

Digital transformation (DT) is a popular contemporary buzzword in the financial services industry. In order to remain competitive, banks constantly evaluate and adapt their digital strategies. One approach involves leveraging innovative digital technologies such as artificial intelligence, cloud technologies and blockchain. Simultaneously, banks have increased their outsourcing activities over the last decades. This study investigates the intersection of sourcing strategies and DT-induced change, presenting a literature-based sourcing strategy framework as the basis for a qualitative empirical study analyzing the impact of DT on the sourcing strategies in the FS sector in Germany. Our results show that DT has significantly impacted sourcing strategies among FS providers. Specifically, the strategic motivation to outsource has shifted from cost reduction to innovation while offshoring activities have declined in importance. However, contractionary to our expectations, the research also shows that DT’s effect on sourcing strategies has been more evolutionary than revolutionary.