Digital Transformation in the Swedish Banking Sector

Abstract: The face of banking has changed dramatically over the last few decades, and in no area does this statement hold more true than in the domain of digitalization. One term that has been relentlessly repeated when discussing the past, present and future of this development is ”Digital Transformation”. Digital Transformation can be tersely defined to mean change driven by digital technologies, with the potential to increase efficiency in existing processes, as well as to allow for new and novel technology-driven problem solutions and business models. Despite the fact that Swedish major banks have come a long way in their digital transformation efforts, there is a lot of evidence that points towards this process not proceeding fast enough. This study is an effort to get a general overview of the main barriers and mechanisms that are causing this development to proceed at a slower rate than might otherwise be desired, and to investigate how actors within the Swedish banking sector are seeking to overcome said barriers. This is done primarily through the interviewing of key personnel within major Swedish universal banks. The majority of the interviews are conducted with employees from a single major Swedish universal bank, taking the form of a case study, while a smaller number of interviews are conducted with individuals associated with other banks, in an effort to provide increased generalizability. The results of the study show that barriers standing in the way of continued digital transformation in the Swedish banking sector can generally be categorized into one of the following categories: Legacy Infrastructure, Organizational Structure, Organizational Culture, Incentive Structure, Resource Insufficiency, Regulation, and Failure in Management. The solutions and models discussed to address these issues included API First approaches, change driven through Cross-Functional Teams, and Collaborative Strategy Formulation.