Towards the Open Bank? An Institutional Perspective on Open Banking in the Nordics

Olav Vedeld

Student thesis: Master thesis


The process of digitalization is expanding in scope and increasing its societal impact as it continues to transform the core industries underpinning our economy. This is particularly the case for the field of
financial services, where the applications of new technologies are fundamentally changing the way people interact with money. At the forefront of these developments, lies the Open Banking movement in
the EU. Despite significant attention from regulators and market actors, Open Banking has not received much focus in academic research. The limited academic research on Open Banking is especially apparent when looking for studies with an institutional approach or with a Nordic perspective. Given this gap in existing literature, this thesis investigates how Open Banking is institutionalizing organizational changes in Nordic incumbent banks. The thesis is rooted in a constructivist philosophy of social science and employs an iterative research process with a longitudinal design given that institutionalization is a process occurring over time. The overarching theoretical framework of the thesis is new institutionalism.
The primary method of the thesis is document analysis using qualitative coding over two rounds: one inductive and one deductive. The inductive coding analyzes key organizational changes of the six largest
banks in the Nordics: Nordea, Svenska Handelsbanken, Swedbank, Skandinaviska Enskilda Banken, DNB and Danske Bank. It finds that the incumbent banks in the Nordics are homogeneously undergoing
three organizational changes: 1) an adoption of platform-based models; 2) a shift towards FinTech symbiosis, and; 3) an implementation of Agile Co-creation methodologies. These organizational changes
are conceptualized as the Open Bank model. The deductive coding is done by applying DiMaggio and Powell’s (1983) theory on institutional isomorphism and Suchman’s (1983) theory on legitimacy on the
document data. It finds that the institutionalization of the Open Bank model is occurring as a result of institutional changes driven by Open Banking. Specifically, changing regulatory frameworks and public
expectations, an increasing influx of FinTech and High-Tech firms to the organizational field and a transformation professionalization of the field are found to be the most significant institutional changes
occurring. These institutional changes are found to pressure the banks studied towards homogenous organizational change through coercive, mimetic and normative isomorphism as the banks strive for
pragmatic and cognitive legitimacy. Furthermore, the complex and interrelated process of institutionalization of the Open Bank is modeled and presented as one of the key findings of the thesis.
The findings of the thesis suggest that Open Banking, and the broader process of digitalization, can with great benefit be analyzed through a new institutionalist lens. On this basis, the author recommends that researchers continue investigating the topic of Open Banking to better understand how it is affecting the financial services field.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
Publication date2019
Number of pages85
SupervisorsSara Dahlman