Digital financial service and open banking innovation: are banks becoming invisible?

Abstract

Several economic sectors' digitalization forced the financial system to adjust to new paradigms of technological change. Furthermore, the current regulatory environment compelled the financial sector to revaluate its business strategies and interactions with the market. These factors also led to the creation of a brand-new ecosystem-wide competitive model in the banking industry, which has never been seen before. There is a lack of a common framework for the planning of strategic decisions and organizational structure within the new ecosystems of banks and financial institutions, in addition to synthesizing the development lines of open innovation in the banking sector. This study examines how European banks are strategically positioned in relation to their digital transformation goals by examining the decision-making processes that took place between In 2015 and 2019. Partnerships and the uptake of Application Programming Interface (API) development in support of new service models were the subject of a qualitative analysis. The findings have managerial ramifications for those who follow, particularly with regard to the strategy of service integration to diversify and enhance their operations in the area of customer relationship management and care, thereby improving the user experience, as well as pertinent policy implications for regulators connected to the evolution of business and the risks of outsourcing.