Paper Number

1653

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.

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