The carrot and the stick: Open banking platform governance in the shadow of PSD2

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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