The benefits of open banking to consumers, banks and FinTech companies

ZANDAMELA, Danete Higgins (2021). The benefits of open banking to consumers, banks and FinTech companies. Doctoral, Sheffield Hallam University.

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Link to published version:: https://doi.org/10.7190/shu-thesis-00441
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    Abstract

    This thesis presents a qualitative grounded theory investigation into the possible benefits of open banking for consumers, traditional banks and FinTech companies, with the study exploring the impact of open banking regulation on the banking industry as regulatory actions occur globally, underpinning rapid innovation in banking, and effectively supporting the rise of the FinTech phenomenon. The general views held by traditional bankers on open banking are explored together with the paths available to them, as they seek compliance with recently issued data sharing regulation, and what this may mean for consumers and FinTech companies. The role played by FinTech companies is also explored, including the possible benefits they derive and contribute to banks and consumers. The benefits to consumers are presented based on the findings and the literature, along with the benefits to banks and FinTech companies, based on the research. Purposive sampling was employed, arriving at a representative sample of top banking and FinTech leaders against which a subjectivist approach application of semi-structured interviews was administered. Data analysis and coding generated 4 themes from which emergent theory arose, forming part of the contribution to knowledge. This emergent theory argues that the current structure of bank business models appears unsustainable under consumer-led pressure for innovative and convenient, independent mobile based products; to respond, bank and FinTech collaboration is key. The theory provides a basis for recommendations that form contributions to practice, designed to support banks as they navigate the transformative nature of the open banking regulation before them. These contributions take the form of a two-part model integrated strategic review process by which banks can make better informed decisions, ensuring improved sustainability and systemic stability. Practice recommendations were also provided for the consideration of FinTech companies. Consumers benefit from the posited contribution to practice as the industry reshapes to specifically meet their needs based on collaboration, reduced systemic costs, increased innovation and just sufficient regulation. Whilst regulators were not a focus of this research, significant findings emerged from the data which have been presented, along with a contribution to practice by way of a set of recommendations for the consideration of regulators seeking to develop an appropriate response to the rapid innovation coming from the FinTech companies.

    Item Type: Thesis (Doctoral)
    Additional Information: Director of studies: Dr. Richard Breese and Dr. Hinrich Slobbe
    Research Institute, Centre or Group - Does NOT include content added after October 2018: Sheffield Hallam Doctoral Theses
    Identification Number: https://doi.org/10.7190/shu-thesis-00441
    Depositing User: Colin Knott
    Date Deposited: 16 May 2022 14:58
    Last Modified: 16 May 2022 14:58
    URI: http://shura.shu.ac.uk/id/eprint/30227

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