Organizational impact of digital open innovation in retail banks : Managing external and internal pressure

This article aims to investigate how banks build their dynamic capabilities and deal with corollary rigidities in the era of digital open innovation. Our analysis of two in-depth case studies stresses the challenges that banks face in the era of digitalization. It indicates that banks are transforming themselves deeply in terms of organizational structure, internal processes and interactions, and individual competences; human resistance to change and core rigidities being the most challenging issues to solve. Our results show that people-centered managerial practices -rather than purely technology-centered ones- seem to be highly promising to develop dynamic capabilities within banks. To succeed in developing their innovative capabilities banks have to find the right balance between the external constraints due to the specificity of their activities and the desire and need to innovate in order to satisfy their interconnected clients. To achieve this delicate equilibrium and proceed to the appropriate structural and organizational changes, awareness and collective mindset from banks' executive management appear certainly as one if not the first determining factor to succeed.