Open Banking as a double-edged sword for banks and fintechs: implications and useful insights through the lens of social network

Oday Abu-Smair and Nicholas Rich

Chapter 7 in Research Handbook on FinTech, 2026, pp 121-141 from Edward Elgar Publishing

Abstract: Open Banking initiatives are widely expanding across the globe, disrupting the financial landscape, and shaping new financial paradigms. As a significant disruptor, Open Banking has come up with challenges and promising opportunities for all actors involved in its ecosystem, especially fintechs and banks. When fintechs grant access to financial data, they can drive innovation in the financial industry and develop data-driven financial services, like peer-to-peer payment, cross-border payment services, and robo-advisers, and this, in turn, will make them more empowered and competitive in the market. Through Open Banking, both fintechs and banks can access new market segments that were overlooked or underserved, resulting in enhanced customers’ experience and expanding their base. Notwithstanding, Open Banking also comes with challenges that can affect the actors involved, especially in terms of data sharing and privacy, regulations, and technical aspects. Such challenges can be addressed through working collectively among actors participating in the Open Banking ecosystem, such as banks and fintechs. When fintechs and banks work collectively with each other and with other actors, they will all experience new innovative business models, technologies, and other capabilities. However, this collective work, on the other hand, may also bring some other challenges that can relate to the business relationships that are set between actors, especially in terms of exchanges, intensity, reciprocity, and clarity of expectations. The more exchanges there are between actors are there and the more intense they are, the more benefits they gain, and vice versa. Also, the more they are reciprocal in contributing to the business network and have clearly identified roles, the more advantages they perceive, and vice versa. Drawing on the social network theoretical concepts, this book chapter offers useful insights to practitioners by discussing the challenges and opportunities associated with banks–fintechs relationship in the Open Banking ecosystem, and how such concepts can affect the innovation landscape of banks and fintechs.

Keywords: Open banking; Fintechs; Banks; Open banking ecosystem; Social network (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035321414
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