@ARTICLE{10.21494/ISTE.OP.2021.0673, TITLE={Recapturing Innovation: A case study of Neobanking with a social mission and the challenges of its business model for developing countries}, AUTHOR={Arvind Ashta, Djamchid Assadi, Nathalie Duran, }, JOURNAL={Science, Technology, Development}, VOLUME={1}, NUMBER={Issue 1}, YEAR={2021}, URL={https://www.openscience.fr/Recapturing-Innovation-A-case-study-of-Neobanking-with-a-social-mission-and-the}, DOI={10.21494/ISTE.OP.2021.0673}, ISSN={2752-6879}, ABSTRACT={The concept of “recapturing innovations” explains why incumbents allow challengers to use radical innovations to potentially disrupt the market. Challengers are small and nimble operators who seek high powered incentives to show that their innovations are viable, and the realizations of these objectives come from selling to an incumbent. Incumbents can then recapture their lost markets and use their efficient operating systems and regulatory knowledge to scale up the recaptured innovations, thus sustaining their competitive advantage. This concept is illustrated through a case study on a neobank, which is an innovation in the financial landscape, usually offering a limited range of products through mobile telephones. This case study shows that the challengers used a new organizational form, new technology and distribution channels in order to satisfy a large niche of unserved or underserved clients. This case is similar to the payment banks in India which have not fared well, perhaps because of too much regulatory interference. Therefore, regulatory agencies in developing countries should have appropriate regulations in order to reduce the institutional barriers hindering the success of social enterprises. However, they should not block initiatives in their product pricing, promoting and distributing policies.}}