Mr. McCahery Review of Presentation by Prof. Ozcan Presented by: Prof. McCahery (Tilburg University) Date: 27 March 2020 Objective Of The Paper - Assesses firm level strategies and challenges of new and incumbents at inter-firm and market levels. • Focus: platform formation, organizational transformation, and challenges (cultural, technical). - Key contributions: • Regulated industries: specific factors' effect on platforms. • Impact of platforms on industry disruption. • Open Banking Regulation: Europe. Contribution Of The Paper - Paper focuses on impact of trade-offs facing incumbent and new firms during transitions to platform business model. - Unique approach: looks to context-specific challenges by comparing and contrasting the efforts of both types of firms in highly regulated, data intensive banking industry in UK. - Paper uses semi-structured interviews with both types of firms, regulators, etc for the period between 2016-2018. - Paper relates to the literature on how shift to platform-based business (Altman and Tripsas, 2015) and the environmental context in which platforms operate (Gawer, 2014). • Offers insights by showing effect of technical and cultural factors. The Paper's Approach - Theoretical: • Theoretical account of transitioning to platform business model (in light of trade-offs). - Empirical/Semi-structured interviews: • Details on 79 interviews (from 9/2016-12/2018). • Investigation of platform formation or participation. • Consistence with theory. Comments - - Potential Bias in Semi-structured Interview questioning: • Cross-examination-accuracy of assumptions & effectiveness. • Event tracking-organizational and behavioral factors. • Non-direct questioning-tailored response concerns. One issue worth exploring: Cybersecurity threats and liabilities when operating multiple digital platforms. • Produces defensive mentality from incumbent banks as well as deters endusers from signing up. • Banks are devoting more resources to increasing cybersecurity defenses, and this one of the biggest legal and reputational risks that banks face. Where Can I add Value? - What other data might supplement the theory Suggestion - Quantitative Method: - Event study • PSD2 with range of windows (ie, announcement, enactment and implementation). • Measure announcement effects on 9 incumbent banks involved in European payment chain. - Survey • Use of survey devoted to determining the effect of CEO's characteristics, business characteristics and service characteristics on platform decisions of both types of firms. • Focus: cost of service, ease of usage, access and size of transaction services portfolio. Take Away - Very interesting paper • I especially like the approach of studying technical and cultural tradeoffs, and the consequences, for both types of firms transitioning to platform model. • From a corporate finance and strategy perspective this seems a very interesting avenue for research. - Derive more data from quantitative technique.