Opening doors for underdogs? The impact of open banking on competition between banks and spillover effects on the mobile financial industry

Abstract

Recent years have seen open banking boost financial innovation. This study investigates the impact of open banking implementation on the mobile bank app industry, the competition between incumbent banks and internet banks, and the mobile financial industry by analyzing 3,500 users. It uncovers how open banking fuels app market growth and intensifies traditional versus internet bank rivalry. Moreover, the implementation of open banking is shown to be more advantageous for internet banks. The results also demonstrate that open banking has spillover effects on other mobile financial industries. The research provides academic and practical insights for financial industry stakeholders and policymakers on understanding what open banking means in terms of competition, cooperation, and the financial ecosystem.