The carrot and the stick: Open banking platform governance in the shadow of PSD2
Abstract: This paper employs a qualitative analytical approach to address the question of how incumbents
incorporate risk into their platform strategy, and how this in turn influences their approach to platform
governance. Through an analysis of legislative and policy documents on the formulation and
implementation of PSD2 in Sweden and the EU, 24 semi-structured interviews with experts and
organisational representatives in the Swedish banking sector, and literature from the fields of strategic
innovation and financial sector governance, we conduct the grounded analytical development of a model
linking risk assessment to platform governance among incumbent banks. Our model suggests an
iterative three-stage process, involving translation, mobilisation, and incorporation as platform owners
at banks try to balance openness and perceived platform risks.
We identify a conflation of access openness and resource openness: platform owners decide resource
openness ex ante, as part of their overarching strategy around what kind of platform to have, and then
once they have the platform in place make decisions about platform access on a case-by-case basis,
based on their risk assessments.
Citation: Ingram Bogusz, C. and S. Kashyap. 2022. The carrot and the stick: Open banking platform governance in the shadow of PSD2. ECIS 2022 Research Papers 113.
Keywords: platform governance, risk, open banking, PSD2