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Open banking has recently been advanced as a measure to foster competition and innovation in the retail banking sector. Since its introduction in the UK, a number of banks have created new digital business models (BMs) that offer individuals and businesses access to more personalized financial services. Yet, it is still unclear what new entrants (smaller and newer banks) have done to potentially disrupt incumbents (larger and well-established banks). To shed light on the innovations in BMs that have been initiated by digital banks to move away from traditional retail banking BM, seven digital BMs operating in the UK financial sector were examined using the BM innovation analysis framework. Our findings suggest that innovation in the new digital BMs has been achieved by building on the existing retail banking activities, developing new digitally enabled activities, and leveraging open innovation activities. Implications of our findings for researchers, managers and policy makers will be outlined.

The emergence of the most recent FinTech phase resulted in multidimensional challenges, putting pressure on the traditional modus operandi within the financial services industry. Whilst incumbents initially responded to this FinTech phase by waiting out or attacking the new market entrants, the environment more recently shifted toward a more collaborative approach built on open innovation. The transition is further encouraged through regulatory initiatives (e.g. open banking), paving way for the development of FinTech-enabled ecosystems. Based on a review of publicly available information, this research is founded on academic and industry literature and aims at illuminating how banking organizations utilize open innovation as a vehicle for strategic intervention in order to respond to the changing market environment. Several cases that correspond to the attributes and characteristics of the three main types of open innovation (inside out, outside in, and coupled open innovation) are investigated, and common determinants contributing to the success of those initiatives derived in order to provide an outlook on future developments within the industry.

Open banking regulatory regimes represent an attempt by regulators to take advantage of a wave of digitalization and its associated sea of data to encourage more dynamic and efficient financial services sectors. This chapter explores Australia’s Consumer Data Right regime and how its planned expansion beyond financial services could propel fundamental changes to large sectors of Australia’s economy and society. We explore why these regimes are being put into place now and what these changes could look like, including potential consequences. Lastly, we provide recommendations on how regulators should build data sharing regulatory regimes. In order to best achieve the goals of encouraging data leveraged social economic development, financial inclusion, and furthering innovation through data sharing requirements, we make three recommendations. First, regulators must ensure the burdens and benefits of these regimes are consistent and fair, as it is very easy to replace one asymmetry with another. Second, consumers must be at the center: their benefits and safety are paramount to adoption and success of an economy that properly leverages consumer data. Third, open banking regimes must consider other technological developments, regulations, and trends to be incorporated as part of a larger national data strategy if they are to be effectively adopted.