Dynamic Model of Orchestration Capabilities of Large Companies in the Transition to Open Banking

Document Type : Research Paper

Authors

1 Ph.D., Department of Technology Management, Faculty of Industrial Management and Technology, College of Management, University of Tehran, Tehran, Iran.

2 Associate Prof., Department of Technology Management, Faculty of Industrial Management and Technology, College of Management, University of Tehran, Tehran, Iran.

3 Prof., Department of Industrial Management, Faculty of Industrial Management and Technology, College of Management, University of Tehran, Tehran, Iran.

10.22059/imj.2025.389109.1008225

Abstract

Objective
To effectively manage and guide inter-organizational innovation networks, the role of the orchestrator is crucial. Typically assumed by the focal firm, this position necessitates continuous assessment and enhancement of orchestration capabilities. For a strategic, long-term approach, these capabilities should be evaluated at two levels: static (during the network's launch and daily operations) and dynamic (during fundamental changes in the network's primary variables). This research aims to present a model that elucidates the dynamics of orchestration capabilities within large financial companies and banks transitioning to open banking. The study focuses on the shifts in orchestration capabilities in response to the open banking paradigm, introduces emerging capabilities within this new framework, and examines various dimensions of orchestration roles throughout this evolution.
 
Methods
This research employs a case study method focused on the banking industry, specifically targeting successful banks at the core of innovation networks utilizing open banking. The level of analysis is centered on the adoption of open banking, while the unit of analysis is the orchestration capabilities within these innovation networks. Recognizing the open banking paradigm as a disruptive factor, 19 semi-structured interviews were conducted to analyze five selected banks, chosen based on four criteria, acting as orchestrators of banking innovation networks. The orchestration capabilities were coded and identified through content analysis across three distinct time periods: closed banking, migration period, and open banking.
 
Results
In this study, middleware capabilities were identified and explained through a dynamic model across three time periods: closed banking, the migration phase, and open banking. Four main themes of capabilities were identified for closed banking, while a single theme titled "network transformation management" emerged for the migration phase. For open banking, 22 new categories were identified under four main themes: network design and launch, platform network value induction, platform legitimacy, and platform network participation. By comparing and analyzing the results across these periods, emerging capabilities were introduced, certain traditional banking capabilities were eliminated, some capabilities remained unchanged, and others were enhanced by adding new and unique concepts and codes.
 
Conclusion
From a theoretical perspective, this research provides a comprehensive set of roles and capabilities essential for orchestrating innovation networks. It examines the darker aspects of orchestration with a dynamic perspective, considering technological paradigm shifts and improving previous theories. The study categorizes all the roles and capabilities required by orchestrator banks in both traditional/closed banking and open banking paradigms. Consequently, it identifies and presents the various dimensions of platform-based innovation network orchestration, relying on the orchestration capabilities of open banking platforms. According to the findings, it is crucial for the focal company to adapt its orchestration capabilities in response to technological paradigm shifts to maintain a competitive advantage.

Keywords

Main Subjects

References

 
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Industrial Management Journal
Volume 17, Issue 1
2025
Pages 131-162

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