Innovation through coopetition: How platforms and regulations shape financial networks in times of digital transformation

Digital transformation is fundamentally reshaping financial markets, intensifying competition while simultaneously increasing firms' dependence on shared technologies, infrastructures, and regulatory resources. In this context, coopetition, i.e., simultaneous cooperation and competition, has emerged as a central mechanism through which firms pursue innovation. Yet, little is known about the formation of coopetition networks. This study investigates how digital technologies and regulation influence coopetition among financial firms in the context of digital transformation. Drawing on resource-based theory, we examine multiple drivers of coopetition, including external factors (platforms, artificial intelligence (AI), blockchain technology, and banking licenses), relation-specific drivers (company type and network position), different forms of coopetition, and endogenous network effects. Using an exponential random graph model (ERGM), we analyze the coopetition network of 371 firms in the German financial sector. Our results show that platforms play a pivotal role in fostering coopetition by facilitating connectivity and value co-creation across competitors. Regulatory requirements, particularly access to banking licenses, further stimulate coopetitive ties by creating resource dependencies between incumbents and fintech firms. In contrast, highly complex technologies such as AI and blockchain do not uniformly promote coopetition. Moreover, partner and relationship characteristics significantly affect network formation. Overall, the findings highlight how various factors jointly structure financial networks and enable innovation through coopetition in times of digital transformation.