Open Banking: Emergent Roles, Risks & Opportunities

Daniel Gozman, Jonas Hedman, Kasper Sylvest

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

Abstract

The phenomenon of financialization has received increasing attention, especially following the global financial crisis. We broaden the scope of research on financialization by investigating Open Banking initiatives. Such initiatives aim to enhance the banks’ ability to personalise customer experiences. Consumers and businesses can now easily share their data with banks and third parties to manage personal accounts and compare banking services. Such initiatives raise important questions regarding the future role of banks as well challenges and opportunities inherent in the new Open Banking landscape. We empirically investigate five Open Banking initiatives through twenty-five interviews conducted with users of Open Banking APIs as well as those managing the various initiatives. From these interviews, we develop a taxonomy and identify four open banking roles: integrator, producer, distributor, and platform. A further contribution is made by identifying related challenges and opportunities faced by fintechs and incumbents in the shifting landscape of retail banking. The challenges identified include risk of disintermediation, loss of reputation and transformational failure while the opportunities identified include enhanced service innovation and risk mitigation. Overall, the study provides first insights into how the retail banking industry will adapt to new service innovations and increased collaboration with third party fintechs.
The phenomenon of financialization has received increasing attention, especially following the global financial crisis. We broaden the scope of research on financialization by investigating Open Banking initiatives. Such initiatives aim to enhance the banks’ ability to personalise customer experiences. Consumers and businesses can now easily share their data with banks and third parties to manage personal accounts and compare banking services. Such initiatives raise important questions regarding the future role of banks as well challenges and opportunities inherent in the new Open Banking landscape. We empirically investigate five Open Banking initiatives through twenty-five interviews conducted with users of Open Banking APIs as well as those managing the various initiatives. From these interviews, we develop a taxonomy and identify four open banking roles: integrator, producer, distributor, and platform. A further contribution is made by identifying related challenges and opportunities faced by fintechs and incumbents in the shifting landscape of retail banking. The challenges identified include risk of disintermediation, loss of reputation and transformational failure while the opportunities identified include enhanced service innovation and risk mitigation. Overall, the study provides first insights into how the retail banking industry will adapt to new service innovations and increased collaboration with third party fintechs.

Conference

ConferenceThe 26th European Conference on Information Systems (ECIS) 2018
Number26
LocationUniversity of Portsmouth
CountryUnited Kingdom
CityPortsmouth
Period23/06/201828/06/2018
Internet address
SeriesProceedings of the European Conference on Information Systems
ISSN0000-0034

Keywords

  • Open Banking
  • Open API
  • Financialization
  • FinTech

Cite this

Gozman, D., Hedman, J., & Sylvest, K. (2018). Open Banking: Emergent Roles, Risks & Opportunities. In ECIS 2018 Proceedings Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL). Proceedings of the European Conference on Information Systems
Gozman, Daniel ; Hedman, Jonas ; Sylvest, Kasper. / Open Banking : Emergent Roles, Risks & Opportunities. ECIS 2018 Proceedings. Atlanta, GA : Association for Information Systems. AIS Electronic Library (AISeL), 2018. (Proceedings of the European Conference on Information Systems).
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Gozman, D, Hedman, J & Sylvest, K 2018, Open Banking: Emergent Roles, Risks & Opportunities. in ECIS 2018 Proceedings. Association for Information Systems. AIS Electronic Library (AISeL), Atlanta, GA, Proceedings of the European Conference on Information Systems, Portsmouth, United Kingdom, 23/06/2018.

Open Banking : Emergent Roles, Risks & Opportunities. / Gozman, Daniel; Hedman, Jonas; Sylvest, Kasper.

ECIS 2018 Proceedings. Atlanta, GA : Association for Information Systems. AIS Electronic Library (AISeL), 2018.

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

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Gozman D, Hedman J, Sylvest K. Open Banking: Emergent Roles, Risks & Opportunities. In ECIS 2018 Proceedings. Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL). 2018. (Proceedings of the European Conference on Information Systems).