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sustainability
Article
Digital Transformation in Banking: A Managerial Perspective
on Barriers to Change
Florian Diener * and Miroslav Špaček
Department of Entrepreneurship, Faculty of Business Administration, Prague University of Economics and

Business, 137 00 Prague, Czech Republic; [email protected]
* Correspondence: [email protected]; Tel.: +49-(0)151-4053-2978
Abstract: The digitalisation of banks is seen as the omnipresent challenge which the banking industry
is currently facing. In this digital change process, banks are facing disruptive innovation that requires
adaptation of almost all cooperative processes. Digital transformation in the financial industry is
associated with obstacles that seem to hinder smooth implementation of digital approaches. This
issue has not been adequately addressed in the current academic literature. The main purpose of this
qualitative exploratory study is to identify the main perceived obstacles to digital transformation in
both the private and commercial banking sectors from a managerial point of view and to analyse
them accordingly. The methodology is based on a methodological approach using a combination
of contextual interviews with German board members of banks, inductive content analysis, and
the exploration of best-practice approaches. The findings revealed that elements of strategy and
management, technology and regulation, customers, and employees receive a high level of attention
within the digital transformation. The other main barriers can be found in the areas of market
knowledge and products, employee and customer participation, and public benefit. Each main
barrier is characterised by several sub-barriers of varying importance for the digital transformation
of banks and is described in detail.

Keywords: bank; barriers; digitalisation; management; perception; transformation
Citation: Diener, F.; Špaček, M.
Digital Transformation in Banking: A
Managerial Perspective on Barriers to
Change. Sustainability 2021, 13, 2032.
https://doi.org/10.3390/su13042032
1. Introduction
Over the past several years, digital transformation has received considerable attention
Academic Editor: Andrea Pérez in the areas of management, business, information systems, information technology, and
Received: 28 December 2020 marketing. The developments in information and communication technologies in the
Accepted: 4 February 2021 digital age have significant and varying effects on organisations. Changes in traditional
Published: 13 February 2021 business ecosystems have created new business environments called “digital business
ecosystems”. Changes in the business ecosystems affect the strategic decisions of the
Publisher’s Note: MDPI stays neutral organisations related to the internal and external environment. The size and frequency of
with regard to jurisdictional claims in these changes are the parameters that make the concept of change more meaningful [1].
published maps and institutional affil- The rapid development of technology, as well as a great variety of changes in today’s
iations. global marketplace, have led to the intensification of a new cooperative adaptation process.
This digital transformation and the adoption of new technologies raise a growing number
of questions about the changes that traditional companies, strategies, and management
practices need to implement in order to respond to them [2]. This response involves the
Copyright: © 2021 by the authors. creation of new, innovative business models and/or changes and improvements to the
Licensee MDPI, Basel, Switzerland. existing business models with the help of digital technologies [3]. The application of these
This article is an open access article new technologies and their appropriate implementations to improve business performance
distributed under the terms and is an important issue for companies [4,5]. Today, complex transformations affect many di-
conditions of the Creative Commons mensions, including strategic direction, competitiveness, business model, decision-making,
Attribution (CC BY) license (https://
innovation itself, entrepreneurship, productivity, and customers [6–8]. Based on further
creativecommons.org/licenses/by/
continuous development and ever-increasing digitalisation of lifestyles and changes in
4.0/).
Sustainability 2021, 13, 2032. https://doi.org/10.3390/su13042032 https://www.mdpi.com/journal/sustainability

Sustainability 2021, 13, 2032 2 of 26
customer behaviour [9–12], the world has become more and more informed, transparent,
and efficient. Thus, new sales and service markets are coming into being, with continuous
changes in technology and customer behaviour [9–12]. As a result, traditional business
models in multiple industries are not just competing with each other, but also with new
models that are external to their business fields [13]. To satisfy these market-based changes,
enterprises have to adjust by reconsidering and reforming their traditional base [14,15].
Industrial companies, various administrations, educational institutions, the financial
sector, etc., are all undergoing digital changes, which have a noticeable impact on them.
One of the main drivers of digital economy development is the financial sector, which
takes the second position, just behind telecommunication [16]. The key underlying process
is the digital transformation of financial service systems through financial technology
(FinTech)—disruptive innovations by new market entrants that challenge the position of
mainstream financial institutions [17]. In particular, retail banks have been at the forefront
of technological revolution, characterised by rapid deployment and innovation of digital
services, exponential pace of change, and innovative breakthroughs that alter conventional
banking practice [18].
The main problem in banking seems to be that traditional financial service providers
have not yet implemented comprehensive digitalisation [19–22]. As a result, they often
offer an incomplete range of services and are confronted with both strategic and opera-
tional barriers within the digital transformation process. In contrast to established service
providers, there are new, innovative competitors with new concepts, products, and ser-
vices [23]—and, above all, with a modern multi-channel approach in terms of distribution,
communication and marketing, which approaches customers in a variety of ways. As a re-
sult, multi-channel business models have gained substantial market shares, as, for example,
in the case of the German company N26 [24]. Recent research confirms the growing and
prospective influence of these business models on the finance industry [25]. As traditional
companies and their industries adapt slowly and ineffectively to the modern changing
markets, there is a high risk of disruption caused by new technologies and business mod-
els [26,27]. “If such changes are missed by system-relevant financial institutions, such as
large banks or groups of smaller ones, then financial services and the whole economic
system will be endangered” [28]. Many existing financial service providers have already
recognised the need for basic changes in their business model, and have started to rethink,
or rather reform, their approaches [29,30].
This aspect of market-driven technological change, in particular, raises the overall
question of how new entrepreneurial approaches, management behaviour, and technology
changes in the world of banking, a long-established financial system, as well as how they
influence and change banking adjustment, thus leading to the following two research
questions (RQ):
RQ1: What are the main barriers to smooth implementation of digitalisation in banking?
RQ2: What are the “best practices” that are applicable in the implementation of the
digitalisation process?
Due to a complex adjustment process within the financial system and its all-encompassing
entrepreneurial influence, the identification and analysis of obstacles that hinder digital
adaptation in the context of an all-encompassing digitalisation is of great institutional im-
portance. For this reason, this paper contributes to the issue of digital bank transformation
and identifies obstacles to digital transformation in the sector from the perspective of the
management, as the management is ultimately responsible for appropriate bank develop-
ment and long-term business success. In line with this research objective, the present study
identifies and analyses implementation barriers to digitalisation using a methodological
approach based on a combination of contextual interviews with bank executives, inductive
content analysis, and exploration of multiple best-practice approaches.
2. Literature Review
Digital transformation is a holistic concept that includes technologies, as well as organ-
isational and strategic changes [31]. Moreover, it is the process that an organisation goes
through when it changes from an outdated approach to new ways of working and thinking
by using digital, social, mobile, and new technologies [32]. It is driven by the advancement
in technology, the appearance of new business models, and changes in expectations of the
customer [33]. Several additional definitions of the term “digitalisation” are now commonly
accepted. According to Gartner [34], digitalisation represents improvement of existing
business models, creation of new revenues, and value-adding opportunities with the help
of digital technologies. It can be understood as a complex issue that encompasses several
areas like (i) shifts in thinking, (ii) changes in leadership, (iii) technology adoption, (iv)
digitalisation of resources, and (v) acceptance of innovation [35]. As became apparent from
the preceding classification, the term “digitalisation” should be distinguished from the
similar term, “digitisation”; the former rather addresses the impact of digital technologies
on the organization, while the latter represents the shift from an analogous solution to a
digital one. Digitalisation is organizational renewal through new information and com-
munication technologies [36]. According to Matt et al., digital transformation is a complex
issue that proceeds within a framework that includes (i) changes in value creation, (ii)
structural changes, and (iii) use of technologies and financial aspects [31]. It is no surprise
that digital transformation seems to be blocked by a set of barriers that may hamper or
even collapse the whole process of transformation. Digital transformation is considered a
driving factor that offers a solution to the challenges currently faced by the banks. The core
digital transformation practices, such as leadership, digital trends, digital transformation
skills, digital strategies, implementation of digital technologies, and a customer-centric
approach, are seen as influences brought to bear on digital maturity levels [37].
The term digital transformation (sometimes nicknamed digital entrepreneurship)
is often misunderstood as a straightforward deployment of the latest information and
communication technologies. In practice, technological investments entail not only risk, but
also require an understanding of the relationship between technological and organisational
culture and institutional change within certain boundaries of regulatory frameworks.
Digital transformation is far from simple, certain, or predictable. Moreover, it is likely to
be disruptive or transformative, with immutable impacts upon associated organisational
outcomes related to technical capabilities and behaviours [18].
In the face of the established regulatory standards known as Basel III, banks aim to
embark upon new technology standards, like Regulatory Technology (RegTech), which may
facilitate digital transition. RegTech is an emerging technological trend that leverages infor-
mation technology and digital innovations that can greatly assist with a bank’s regulatory
management process. It is advisable to incorporate RegTech into the digital transformation
strategy of a management function, such as a treasury. Integrated adoption would mean
that the digital platform can be deployed to support both strategic management activities
and enhanced regulatory processes within the treasury. With this arrangement, commercial
and prudential objectives are put in alignment [38].
Digitalisation plays a major role in contributing towards the United Nations Sustain-
able Development Goals. Without transformation of existing businesses, both economic
and environmental challenges of the future cannot be solved sustainably [39]. Digital
transformations will produce new social groups—partly human, semi-human, or non-
human—some of which already exist, and some which can be foreseen by extrapolating
from recent developments in the field of brain wearables, robotics, and software engi-
neering. Growing dependency on digital services and tools may pose problems for both
individuals and organisations [40]. Forcadell et al. [41] argue that digitalisation entails
challenges that can hinder the potential benefits and compromise their survival. That is
why corporate sustainability plays a significant role in enforcing digitalisation. It may
compensate for drawbacks of digitalisation. In particular, the combination of corporate
sustainability and digitalisation helps transform the organisational nature of banks by
simultaneously narrowing their boundaries and expanding their scope. El Hilali et al. [42]
drew attention to possible ways of reaching sustainability during digital transformation
processes. They found that the companies achieved sustainability when effectively master-
ing customers, data processing, and innovation. On the other hand, they did not prove
that the competition played a significant role in enhancing the companies’ commitment
to sustainability. This opinion was partly endorsed by Ordieres-Meré et al. [43], who con-
firmed the positive effects of knowledge creation facilitated by direct or indirect application
of digitalisation. Technology is reported to disrupt the financial industry, solve friction
points for consumers and businesses, and make the overall business more resilient and
sustainable. Sustainable financial technology may contribute to the overall stability of the
financial system as well [44]. Established technology-based business models can act as a
sustainability catalyst to trigger collaborative innovations between traditional financial
and banking institutions [45].
Effective risk management, including its diversification, is also ranked among the
contributors to sustainable bank development in the global economy [46]. Examination
of risk-mitigation strategies in Southeast Asia proved that the banks had become more
sustainable when implementing viable risk-mitigation strategies [47].
Nevertheless, when it comes to the barriers to change in the implementation of
digitalisation in the banking sector, few resources can be found in the literature. It is evident
that the banking sector is changing and institutions have to adapt to new technological
developments and customer behaviour. This trend is particularly evident in the increasingly
digital user behaviour, as mentioned in Table 1, to which bank executives have to respond.
Table 1. Share of payment instruments in Germany.
Revenue 2008 Revenue 2011 Revenue 2014 Revenue 2017

CAGR 3
€ % € % € % € %
cash 405,486 57.89% 317,137 53.10% 267,249 53.18% 297,901 47.58% −2.16%
debit card 178,829 25.53% 169,093 28.31% 147,592 29.37% 212,576 33.95% 3.22%
credit card 25,538 3.65% 44,369 7.43% 19,582 3.90% 27,578 4.40% 2.12%
contactless payment - - 318 0.05% 386 0.08% 7103 1.13% 66.50% 1
other cards 5127 0.73% 815 0.14% 486 0.10% 676 0.11% −19.16%
bank transfer 62,199 8.88% 49,181 8.23% 26,405 5.25% 34,749 5.55% −5.09%
direct debit 13,024 1.86% 4268 0.71% 14,881 2.96% 15,181 2.42% 2.99%
online payment 1939 0.28% 10,115 1.69% 13,986 2.78% 23,258 3.71% 33.45%
mobile payment - - - - 77 0.02% 124 0.02% 8.63% 2
other techniques 8297 1.18% 1984 0.33% 11,900 2.37% 6955 1.11% −0.71%
∑ 700,439 100% 597,280 100% 502,544 100% 626,102 100%
Note: 1 CAGR (Compound Annual Growth Rate) calculated for 2011–2017. 2 CAGR calculated for 2014–2017. 3 Possibility of bias due to
different sample sizes (n) and individual transaction levels. Source: Authors’ own representation based on Deutsche Bundesbank [9–12].
Financial technology (companies called FinTech(s)) plays an essential role here. It is

an industry composed of diversified firms that combine financial services with innovation
technologies offered to financial service providers [44]. Shin and Choi [48] define FinTechs
as platforms for the development of sustainable economic growth as well as a prompter
of the fourth industrial revolution. These types of companies have several advantages
over traditional banks. Typically, FinTechs may also provide a solution for sustainable
finance through microfinance or crowdfunding, among others. Moreover, some FinTechs
distribute insurance and other financial instruments or provide third-party services. Fin-
Techs promise to disrupt and reshape the financial industry by cutting costs, improving
the quality of financial services, and creating a more diverse and stabler financial land-
scape. Their existence is driven by sharing and the circular economy, as well as favourable
regulation, and information technology [44]. FinTechs have the potential to unbundle
core activities of the banking sector: clearing and settling payments, performing maturity
transformations, sharing risks, validating trust, and allocating capital. They have also
created a new paradigm in which information technology represents a meaningful driving

force that gives rise to innovation [44].
Hereby, banks are under massive pressure to transform their approaches and business
models to a more customer-centric approach in order to remain competitive. The traditional
institution has felt the disruption and is working towards changing its business model from
product-centric to customer-centric [37]. Similarly Mărăcine et al. [49] suggest that five main
areas exist where FinTechs can provide improvements in business models for the banks:
introducing specialized platforms, covering neglected customer segments, improving
customer selection, reduction of the operating costs of the banks, and optimisation of
the business processes of the banks. As digital banking offerings have matured and
cost pressures have increased, it has become inevitable to make changes to the operating
models of banks. Driven by the sub-optimum performance of the existing business model,
the “digital” concept has evolved into more than a channel for accessing services. One
of the outcomes was a full-fledged branchless digital bank [50] or challenger bank. A
challenger bank stands for a financial institution that can be presented in the plain form of
an information–communication system [16].
Sadigov et al. [51] have proved that FinTech development contributes to economic
growth by increasing the GDP generated in the financial sector, and indirectly does so by
increasing e-commerce turnover and real sector financing, particularly by creating more
favourable lending conditions for small and medium-sized businesses.
As has become evident, business models adopted by FinTechs differ from those ap-
plied by traditional banks. Nevertheless, these differences do not mean that both types
of banks may eventually converge towards a common market by exploiting co-operation
strategies. Their business model is intangibly driven, combining e-finance, internet tech-
nologies, social networking, artificial intelligence, blockchains, and big data analytics.
Moreover, their revenue model is much more scalable than that of a typical bank [44].
Given the lack of literature on banking and existing research that followed a similar ap-
proach to identifying implementation barriers, those by Chan [52], Chan [53], Vikneswaran
and Anantharajah [54], Kamalulariffin et al. [55], and Yusof and Jamaludin [56] have to
be considered; barriers arise in connection with the implementation of new strategies and
management approaches. Given that these authors have already properly elaborated and
investigated the barriers to the implementation of new strategies, it is important to take
their research approaches into account.
In addition, the questionnaires they used have already been partially validated and
can, therefore, be a sound basis for this study. For some barriers, however, their question-
naires need to be reformulated or reworded, as they only allow a theoretical approach and
do not fully correspond to the specific terminology needed for this work. For example,
the study by Kamalulariffin et al. [55] focussed on environmental management in the
hotel sector; a closer look at the research findings revealed that this industry is facing a
situation similar to that which financial institutes are facing today, with new strategies and
business models being pursued internally and by competitors. In particular, new business
models are being developed that have never been established in their market before, thus
satisfying customer needs in the latest way and, at the same time, endangering traditional
business models.
Chan [52,53] already considered internal and external barriers, which he repeatedly
validated through his work. These findings can be summarised as (a) implementation
and maintenance costs, (b) lack of knowledge and skills, (c) lack of a sense of urgency,
(d) the ambiguity of modern banking, (e) lack of qualified consultants, (f) lack of moti-
vation and professional advice, (g) conflicting guidance, (h) outcome uncertainty, and (i)
inconsistent support.
Kamalulariffin et al. [55] mentioned the barriers of (a) regulation and government,
(b) customer demand, (c) level of competition, (d) cost of greenness at the organisational
level, and (e) attitude toward change. Vikneswaran and Anantharajah [54] referred to
(a) high maintenance and implementation costs, (b) lack of sufficient knowledge, (c) lack
of resources (time, manpower, equipment, and money), (d) lack of momentum from the
company owners, (e) lack of a sense of urgency and ambiguity of guidelines, (f) lack of
qualified verifiers or consultants, (g) conflicting guidance, and (h) lack of government
regulations and enforcement, as well as (i) difficulty in operating an entity (difficult to
balance the quality of service performance). From the content analysis of all the related
literature, in summary, 12 pertinent barriers were identified by Yusof and Jamaludin [56].
Chan et al. [57,58] confirmed and extended these results again, which can also be inter-
preted in relation to banking, the associated digitalisation, and FinTech. Due to the more
appropriate and transparent approach of Yusof and Jamaludin [56], their analysis is not
considered holistically in this elaboration.
Due to the holistic nature of these works, these results served as a textual foundation
for the preparation of the interview questions; consequently, they were derived mainly
from the proven works of Chan [52], Chan [53], Vikneswaran and Anantharajah [54],
Kamalulariffin et al. [55], and Yusof and Jamaludin [56], which are considered reliable
and valid.
3. Methodology
3.1. Data
Due to their strong market positioning, the German savings banks and cooperative
banks were the focus of this study and, thus, the focus of the data collection process.
Both types of banks are equally ranked among the good service providers. They provide
the majority of regional and supra-regional branches in retail banking and are the most
strongly represented group in banking from a personnel point of view [59–63]. In addition,
they offer an almost identical product range to their customers. Although they differ only
marginally in their products and services, they differ on an organisational and structural
level with regard to their business model [64].
3.1.1. Interview Process

In total, for this study, 34 interviews were conducted with German bank managers—
more precisely, bank executives. Two of them had to be disregarded, as they did not fit
into the relevant target group; thus, 32 interviews, with an average interview duration
of 34 min, were considered for further evaluation. The valid interviews lasted between
22 min in the shortest case and 1 h and 7 min in the longest case; the total length of the
interviews was 17 h and 53 min. Two of the 32 valid interviews were interrupted, either
due to technical problems or due to interruptions in the person’s environment, so in these
cases, several recording files were created for each interview; however, this does not affect
the validity and substance of the discussions.
These were determined as Table 2.
Table 2. Numerical interview data description.
Duration Bank Experience

Interview Gender Validity
(mm:ss) (In Years)
1. 27:57 20 M 3
2. 31:25 5 M 3
3. 24:15 42 M 3
4. 38:57 9 M 3
5. 23:02 17 M 3
6. 23:48 33 M 3
7. 13:12 25 M 7
8. 39:39 32 M 3
9. 29:04 7 M 3
10. 25:24 20 M 3
11. 28:05 17 M 3
12. 34:19 8 M 3
13. 27:03 27 M 3
14. 34:46 34 M 3
15. 27:13 11 M 3
16. 66:58 22 M 3
17. 46:48 19 M 3
18. 25:57 28 M 3
19. 34:48 12 M 3
20. 31:49 26 M 3
21. 35:18 30 M 3
22. 38:02 17 M 3
23. 35:59 28 M 3
24. 22:54 23 M 3
25. 52:55 20 M 3
26. 46:59 10 M 3
27./28. * 54:05 44/11 M 3
29. 37:31 25 M 7
30. 28:43 30 M 3
31. 33:31 20 M 3
32. 35:14 27 M 3 Duration (hh:mm:ss)
33. 37:02 20 M 3 ∑ (total) 18:43:56
34. 31:14 25 M 3 ∑ (valid) 17:53:13
Source: Authors’ own representation.
3.1.2. Data Preparation

The data were prepared by transcription according to “simple rules”, whereby the
audio recordings were transcribed word by word, but not repetitions, word deletions,
or non-verbal utterances. Signals of understanding or confirmation, such as “mhm, aha,
yes, exactly”, etc., were not transcribed. The form of the transcription was based on
Kuckartz [65] and Dresing and Pehl [66]. The interviews were transcribed verbatim, but
dialectal variants were not transcribed, and slight dialectal utterances were translated in
the standard language. Colloquial language was retained. The sentence form, definite and
indefinite articles, etc. were retained, even if they contained errors.
3.2. Analysis Procedure

By means of an explorative interview framework [67], the main goal of this study
was to generate impulses for an individual narrative of implementation barriers in digital
transformation. In guided interviews, pre-defined questions were asked, but these could be
answered very openly by interviewees; the procedure was less strict than in other interview
methods. In a semi-structured interview, also called a guided interview, the interviewees
are not given specific answers; they can report, comment, and explain freely. The advantage
of this method is that, although the interviewer asks concrete questions by means of his or
her questionnaire, the interviewee can answer openly and possibly focus the interview on
new aspects and expand the entire interview.
Following Mayring [68], a theory-based analysis model was set up for the analysis,
which was carried out by summarising and through inductive category formation. The
selection of interviewees, as well as the number and scope of the answers given, is of
crucial importance in the interview method [69]. As is the case in similar work on expert
knowledge, the quality depends crucially on the selection of so-called experts—in this
case, the interview participants [69]. Experts are understood to be individuals to whom
knowledge of the surveyed topic area is attributed due to their activity and resulting
practical expertise, as well as their specific educational qualifications [70]. This usually
exceeds the knowledge of people who are unfamiliar with the topic being surveyed [71].
According to Chan [52], these are the managers and executives of an industry. For this
study, interviewees are bank experts who are the actual decision-makers (the executive
management) of a bank, with budget and personnel responsibility, as well as bank experts
with specific knowledge and professional experience in the fields of banking, digitalisation,
entrepreneurship, finance, financial technology and innovation, and many more.
A larger sample often leads to more confident and more reliable statements on what
to look for [69]. The size of the samples for qualitative analyses is usually smaller than
for quantitative analyses. Frequently, more accurate and more representative inferences
about the population can be made in the case of large sample proportions; however,
interviews will only be carried out as long as new information is perceived. In principle,
the sample sizes should be large enough to obtain sufficient data to adequately describe
a phenomenon of interest and to enable the research questions to be answered. The aim
of this and all other qualitative studies is to obtain saturation of the sample; saturation
occurs when the inclusion of additional participants does not lead to new perspectives or
information. Glaser and Strauss [72] suggested the concept of saturation in order to achieve
an appropriate sample size in qualitative studies. A number of guidelines have been
developed for this purpose. Morse [73] suggested about 30–50 interviewees in ethnography
for grounded theory. Creswell [74], in contrast, suggested only 20–30, and possibly as few
as 5–25 for phenomenological studies, and Morse [73] suggested at least six.
The population is understood to mean the total regional savings and cooperative, and
private banks. It can be assumed that at least one decision-maker/expert can be assigned
to a bank. However, it may also be assumed that the actual population is much greater, as
banks are not authoritarian institutions and their decisions are not made by one person
alone; the prevailing ownership and organisation structures have an additional impact on
a bank’s business orientation.
In the context of explorative inductive content analysis with category formation,
one can rely on work that has already been done. According to Mayring [75], the basic
principle of inductive content analysis is that categories are derived directly from the
respective research material in a generalisation process, without referring to previously
formed theoretical concepts. When the terms “categories” and “barriers” are used in the
following, they are synonymous and refer to the hurdles of digitalisation. Within the
qualitative approaches, the inductive approach has great importance [76]. Its objective is
to capture a naturalistic, object-like representation of the investigation material without
distortion through presuppositions. This approach is a central process within “Grounded
Theory” and is called “open coding” [75]. Within the analysis, this category-building
process can be described as systematic, using a step-by-step and line-by-line approach. In
this logic, the topic of category formation must first be determined on the basis of theory;
i.e., a selection criterion is introduced that determines which material is intended to be
the basis for further category definition. Insignificant contents are thus excluded from the
analysis. The thematic question of the study is of great importance and in accordance with
the main question of this study; it defines the focus of the content. Likewise, within this
approach, the category dimensions and the level of detail have to be defined in advance, as
well as the analysis units [68].
Sustainability 2021, 13, x FOR PEER REVIEW 9 of 29
These were determined as Table 3.

Table 3. Category dimensions.
Table 3. Category dimensions.
What obstacles do banks face when implementing digital
Evaluation question
Whatbanking
obstaclesapproaches according
do banks face to the respondents?
when implementing digital banking
Evaluation question
approaches according to the
Subjective as well as objective assessments respondents?
and perceptions of
decision-makers andasexperts
Subjective as well objectiveonassessments
the topic of digitalisation
and perceptions ofand
Category definition decision-makers and experts on thebarriers.
the associated implementation topic of digitalisation and the
All related issues
Category definition associated implementation barriers. All related issues affecting
affecting the industry and the specific situations of individual the
industry and the specific situations of individual institutions in the
institutionsbanking
in the sector.
banking sector.
Concrete content on the subject of digitalisation for people,
Abstraction level Concrete content on the subject of digitalisation for people,
Abstraction level departments, companies,
departments, companies, customers,
customers, andandthethemarket.
market.
Clear and meaningful elements in the context of digitalisation
Coding Clear and meaningful elements in the context of digitalisation in
Codingunit
unit in banking
banking and generalfinancial
and general financial services.
services.
Context unit
Context unit
TheThe
whole interview with a person—verbatim transcription.
whole interview with a person—verbatim transcription.
Analysis unit All valid research material from the 32 interviews.
Analysis unit All valid research material from the 32 interviews.
Source: Authors’ own representation based on Mayring [68].
Source: Authors’ own representation based on Mayring [68].
The
Theanalysis
analysisapproach
approach to
toinductive
inductive content
content analysis
analysis with
with category
category formation
formation follows
follows
aapredefined process model, which is outlined in Figure
predefined process model, which is outlined in Figure 1.1.
Figure 1. Sequences of inductive content analysis with category formation to illustrate the method of
Figure 1. Sequences of inductive content analysis with category formation to illustrate the method
qualitative analysis according to Mayring [68,75].
of qualitative analysis according to Mayring [68,75].
In the analysis, taking into account the level of abstraction and the category definition,
a suitable text passage is identified in the test material during the analysis, and a category
is constructed. A term or phrase that comes as close as possible to the material is then
used as the category name. Whenever a new passage is found in the further course of
the text analysis that matches the selection criterion and category, it is also assigned to
the same category. This is also referred to as “subsumption”. However, if it turns out
that no assignment to already existing categories is possible, a new category is inductively
formulated from the specific material [75].
After a certain percentage of the material (often at 10 percent to 50 percent), when
almost no new categories can be created, this is the moment for revision of the category
system [68]. It is then necessary to check whether or not the logic is clear and the degree of
abstraction fits the object and the question posed.
In the course of this qualitative analysis, the coded text passages are first paraphrased,
then generalized, and finally form the actual category. The result of this process is a series
of categories assigned to a specific topic and corresponding text passages in the research
material. In the further course of the process, the interpretation is then made with regard
to the overarching research question, taking into account the present approach and its
findings. Due to the complexity of the interview topic, the respondents preferred to conduct
the interviews in their first language. Given the availability of information, the generalised
statements of the interviews were first formulated in German and later translated into
English for this work. Thus, the internationality of the results is taken into account. In
order to ensure the overall consistency of the generalisation, as well as the equivalence of
the translations, a re-translation procedure was applied [77], carried out by a professional
bilingual translator.
3.3. Structure of the Interview Guideline

The semi-structured interview guide was divided into a German and an English ap-
proach, depending on the interviewee. Both were based on previously extracted theoretical
findings, which were used accordingly to interview decision-makers at banks. The barriers
mentioned in Section 2 were fully taken into account. Furthermore, due to the different
perspectives of the individual respondents, the guidelines were also adapted to each in-
dividual situation. They therefore differed slightly and were divided into two categories:
banks and financial service providers. However, the basic structure of the interview guide
was not changed. First, the interview topic was introduced and introductory questions
about the person were asked. In the first section of the interview, the interviewees placed
themselves in their respective positions in the company and described their level of knowl-
edge on the topic of digitalisation in banking. This was to determine the suitability of each
interview partner in advance. In the further course of the interview, questions regarding
the banking sector and digitalisation were asked in detail, taking into account the findings
of Chan [52], Chan [53], Vikneswaran and Anantharajah [54], Kamalulariffin et al. [55], and
Yusof and Jamaludin [56].
3.4. Conducting the Survey

The guideline survey focused on interviews with decision-makers at banks. These
were identified through personal contacts in the financial and banking industry and active
approaches toward banking associations and local banks, as this is where access prob-
lems appear to be the lowest [70]. Furthermore, recommendations played an important
role in the acquisition of interview partners. Consequently, further contacts with experts
were established. Due to the geographical distance from the respective interview part-
ners, the interviews were not exclusively conducted in person, but also via telephone or
video conferencing [70].
In order to ensure the clarity of the individual questions, a pre-test with three test
subjects was carried out in advance. As a result, the interview framework was confirmed,
and no further adjustments had to be made. In order to comply with the applicable
provisions of the General Data Protection Regulation (GDPR), respondents were required
to sign a consent form. The interviews conducted were recorded using the memo function
of a smartphone. Here, it is important to mention that all respondents were interviewed
regardless of ethnic and social origin, age, gender, sexual identity, religion, ideology,
or other ethically questionable aspects [78]. Furthermore, all of these interviews were
voluntary and the participants consented to the GDPR.
4. Qualitative Evaluation
4.1. Consistency of Coding
In quantitative content analysis, the term “inter-rater reliability” is generally under-
stood to refer explicitly to the quantitative quality criterion of reliability. The term is
connected to measurement theory and claims to be replicable. Here, a distinction has to be
made between a possible agreement in the formation or direct application of an existing cat-
egory system. Since the formation of inductive categories according to Mayring [68,75,76]
is the result of a construction process, the formation of a category system cannot be claimed
to be consistent [65]. A coefficient that measures the agreement between two category
systems created by two or more different coders using the same data material says lit-
tle about the quality of the category system. Rather, it could measure something that
was not intended to be measured [65]—for example, the logic by which people create
category systems. Accordingly, Kuckartz [65] concludes that the demand for agreement
among coders thus refers primarily to the application of categories, i.e., the coding of data.
However, the classical quality criteria for determining reliability in quantitative content
analysis cannot be transferred to qualitative content analysis. Kuckartz [65] justifies this
with the fact that, in quantitative content analysis, the coding units are defined before
coding. In this quantitative case, relative matches and coefficients, such as Cohen’s Kappa,
Krippendorff’s Alpha, or Scott’s Pi would then be calculated [65]. In qualitative content
analysis, the material is usually not segmented in advance, which is why Kuckartz sees
two ways of identifying the concordance between coders, according to which the present
study is oriented:
1. A qualitative path by means of the joint checking of codings, called consensual
coding, and
2. a quantitative path by calculating percentage agreement and, under certain circum-
stances, a suitable coefficient [65].
4.2. Consensus Coding

Subjective assessment is understood by Kuckartz [65], referring to Guest, MacQueen,
and Namey [79], as a situation in which two coders encode a text independently and then
compare it subsequently. This process is also called consensual coding [65,80]. Here, the
second coder notes questions and problems that arise in the process and discusses them
at the end of the individual coding session. Using the formulated category definitions of
disputed codes, a coding is agreed in the best case and, if necessary, the category definition
is revised. If no consensus can be reached, another person is consulted, who then decides
on the controversial case [65].
Since the qualitative data collection resulted in a total of 32 valid interviews, the
second coder was provided with a selection of interviews. Due to the large amount of
interview material, a complete second coding seemed unreasonable for an external coder.
It was agreed that at least 10 to 30 percent of the interviews should be independently
coded a second time, as this seemed to be feasible in terms of the time and motivation
required. In order to ensure an independent selection of interviews, the principle of
drawing random numbers (1 to 34) was applied with the help of a random number
generator from Random.org. Interviews 7 and 29 were omitted; the respondents did
not fit the target group because their business model was different from that of banks.
Thus, a total of six interviews (4, 13, 20, 24, 27/28, 31) were coded by the second coder,
which means that about 19 percent of the entire data material was used to verify the
results. Furthermore, based on the sum of valid interviews, one is at least within the
methodological revision range of 10 to 50 percent of the categories, which is consistent
with Mayring’s approach [68,75,76].
Within the coding process, the second coder was first introduced to the developed
coding system and the category set, including all sub-categories. For better interview
analysis, MAXQDA Analytics Pro 2020 (Release 20.0.8), a qualitative analysis software,
was used for the actual coding process.
In a personal meeting, classifications were discussed and definitional assignments
were reconsidered. During this process, all six interviews were discussed step by step, or
coding by coding. It is worth mentioning that the already provided coding set did not
require any improvements and could be used by the second coder without additional
modifications, or interpretation difficulties. In addition, there were no problems with the
coding. Based on the fact that the second coder experienced the coding system as quite
complex during familiarisation with the topic and approach, the first two coded interviews
were revised a second time at the end of the coding process to increase reliability. At this
stage of the qualitative evaluation, no numerical analysis of coders’ agreement was carried
out, since the interviews as a whole, rather than individual sections, were the subject of
discussion and appropriate review.
4.3. Calculation of Inter-Rater Reliability

Inter-rater reliability (IRR) is a measure of the level of agreement between the inde-
pendent coding choices of two (or more) coders [81–83]. Of course, it is expected that
the allocation is not arbitrary, but that it is done in such a way that a certain reliability
is achieved. In qualitative research, it is important to improve the agreement and to dis-
cuss together where there are differences in coding and why these differences exist. The
MAXQDA Intercoder Matching function enables comparison of the codings of two persons
coding independently of each other. It supports determination of the consistency of coding
and can be used to establish the deviation of a coder’s choices from the ideal or “true codes”
(“true codes” are those that garner general consensus among multiple coders). There are
a variety of statistics that can communicate a measure of inter-rater reliability, but one
of the most common (and most appropriate for the study in question) is Cohen’s kappa
coefficient [84]. Cohen’s kappa is considered one of the most robust measures of IRR and is
used widely in science [85]. It is calculated based on the percentage of consistency between
two or more coding collections and accounts for the possibility of chance consistency.
For further investigation, it is recommendable to define in advance the segments or
citations to be coded. In the present analysis, due to the large amount of data, the selection
refers to entire interviews and not to individual segments in order to ensure a holistic
approach. Interviews were selected randomly, i.e., six interviews (4, 13, 20, 24, 27/28,
31). Only if this is the case does it make sense to calculate a coefficient to determine the
concordance [65]. Based on the selected interviews, the evaluation checked whether the
two coders matched in the coding of the individual segments and whether conclusions
could be made regarding the reliability of the overall coding. The IRR approach is the
comprehensive and typical variant of qualitative coding [84]. Since texts in qualitative eval-
uation procedures are often not divided into fixed text units, the verification of conformity
is carried out by default for each segment encoded by the two coders (evaluation: segments
of both documents). A percentage value was defined when two coded segments were
considered to be a match. The default value was 90 percent. For this study, the value was
set at 60 percent due to the high level of detail of the code set and the number of possible
codings, as this allowed for more precise evaluations during the later discussion of the
results with Coder 2. With this approach, at the end of the evaluation, for every 60 percent
overlapping coded segment, there is a match that can be used for further analysis.
To interpret the Kappa values, ranges from 0.61 to 0.8 are considered acceptable agree-
ment, and from 0.8 upwards, almost perfect agreement [65,86–88]. Further analysis of
the relative number of matching codes was also carried out (see Table 4). The “Percent-
Sustainability 2021, 13, x FOR PEER REVIEW 13 of 29
To interpret the Kappa values, ranges from 0.61 to 0.8 are considered acceptable
agreement, and from 0.8 upwards, almost perfect agreement [65,86–88]. Further analysis
of the
age” relativeshows
column number ofpercentage
the matching codes was alsoper
of matches carried out (see
interview. Table
This 4). Thein
resulted “Percent-
an overall
age” column shows the percentage of matches per interview. This resulted
percentage agreement of 84.66 percent. It was calculated as follows: Matches/(matches in an overall +
percentage agreement of 84.66 percent. It was calculated as follows: Matches/(matches
non matches). In the “Kappa (RK)” column, the result table gives a randomly corrected +
non matches). In the “Kappa (RK)” column, the result table gives a randomly
value for the percentage match [83]. This takes into account the probability of two people corrected
value for the
randomly percentage
selecting the match [83]. This
same codes in atakes into account
document the would
(if they probability of two
simply people
select codes
randomly selecting the same codes in a document (if they would simply select
randomly without considering the data material). The calculation only makes sense if the codes ran-
domly“Unassigned
option without considering
codes asthe data material).
matches” Thewhich
is selected, calculation
is theonly
case makes sense if the
here [83].
option “Unassigned codes as matches” is selected, which is the case here [83].
Table 4. Code consistency between documents.
Table 4. Code consistency between documents.
File
File Match Non-Match
Match Non-Match Percentage
Percentage Kappa
Kappa (RK)
(RK)
Interview
Interview44 5757 6 6 90.48
90.48 0.900.90
Interview 13
Interview 13 56 56 7 7 88.89
88.89 0.890.89
Interview 20 53 10 84.13 0.84
Interview 20 53 10 84.13 0.84
Interview 24 54 9 85.71 0.86
Interview
Interviews 24 28
27 and 5446 9 17 85.71
73.02 0.860.73
Interviews
Interview2731
and 28 4654 17 9 73.02
85.71 0.730.86
Interview
<Total> 31 54320 9 58 85.71
84.66 0.86
<Total>
Source: Authors’ own representation320 58
based on MAXQDA. 84.66
Source: Authors’ own representation based on MAXQDA.
In determining the kappa coefficient, “P observed” represents the simple percentage
In determining
of agreement. the kappaof
The calculation coefficient,
“P chance”,“P the
observed”
randomrepresents
match, isthe simple
based percentage
on the calculation
of agreement. The calculation of “P chance”, the random match, is based on the
by Brennan and Prediger [89], who have intensively studied the optimal application ofcalculation
by Brennan
Cohen’s andand
kappa Prediger [89], who
its problems haveunequal
with intensively studied
marginal the distributions.
sum optimal application
Usingofthis
Cohen’s kappa and its problems with unequal marginal sum distributions. Using this cal-
calculation method, the random match is determined by the number of different categories
culation method, the random match is determined by the number of different categories
used by both coders. This corresponds to the number of codes in the “code specific result
used by both coders. This corresponds to the number of codes in the “code specific result
table”. The calculation of Cohen’s kappa of the randomly selected interviews resulted in a
table”. The calculation of Cohen’s kappa of the randomly selected interviews resulted in
value of 0.68 after a renewed review of the coded sequences with Coder 2, which can be
a value of 0.68 after a renewed review of the coded sequences with Coder 2, which can be
regarded as a substantial agreement and supports the code set (Figure 2).
regarded as a substantial agreement and supports the code set (Figure 2).
Figure 2. Calculation of the overall kappa coefficient values based on MAXQDA, representing
Figure 2. Calculation of the overall kappa coefficient values based on MAXQDA, representing results
results by Coder 1 and 2.
by Coder 1 and 2.
When classifying the resulting characteristics of the IRR, it should be taken into account
that the second coding was carried out under honorary conditions of a scientific research
assistant to a professor and not under the conditions of a paid scientific research group.
Against this background and the fact that six interviews were double-coded holistically and
not just isolated sections, the reported results appear significant for further interpretation.
5. Results
The analytical approach enabled us to answer the two research questions formulated
above, which are answered in more detail in this chapter. The first RQ referred to the
contribution to theory, while the second referred to the contribution to practice.
5.1. Contributions to Theory

RQ1: What are the main barriers to smooth implementation of digitalisation in banking?
From December 2019 to March 2020, a total of 32 semi-structured interviews were
conducted with board members in banking. This study contributes to the literary expansion
and the first definition of barriers to implementation of digitalisation in the banking market,
which can be used for further research. A total of 63 codes were worked out according to
Mayring’s method, which form the preliminary main category set (see Appendix A). Due
to the complexity of the analytical approach, only the steps following the generalisation
of Mayring’s method can be presented in the Appendix A. Detailed representations are
not feasible due to graphical limitations. Corresponding definitions for the respective
sub-barriers enable interpretation for future analyses. Main categories represent the su-
perordinate classification level of the respective sub-category set, but are not characterised
by an independent definition. Table 5 presents a summary of the set of categories that
represent the main barriers to smooth implementation of digitalisation in banks, with
respect to savings and the cooperative bank sector.
Table 5. Category summary.
Main Category Number of Sub-Categories

Benefits 1
Customer 11
Employee 8
Knowledge and Product 4
Market 4
Participation 2
Strategy and Management 25
Technology and Regulation 8
Source: Authors’ own representation.
5.2. Contributions to Practice

RQ2: What are the “best practices” that are applicable in the implementation of
digitalisation process?
For this study, 34 interviews were conducted with bank executives on the topic of
digitalisation in the banking sector, with emphasis on the digitalisation of their own banks.
A total of 32 interviews were identified as valid for the case-analytical approach in this
chapter and were used accordingly for the practical interpretation of the study results.
A similar approach to interpreting interviews had already been followed in an earlier
publication by Diener and Špaček [90]. The bank managers were not asked about the
problems they encountered in practice, but rather about their best-practice approaches to
digital transformation. All interview partners were asked the same question for reasons
of consistency.
What concrete measures have you/has your bank taken in the past to keep pace with
digital competition and the changing pace of digitalisation? (Interview Question 10)
This question was deliberately kept general in order to give respondents the greatest
possible scope for answering it. As this is also highly sensitive information, data protection
had to be guaranteed and data protection rules had to be respected. In particular, the
respondents insisted on anonymity. Due to their professional status, the interviewees
quoted in this chapter explicitly stressed the wish not to be named or quoted in person. The
same applies to their banks. Official interview material would require explicit permission
by the bank before publication, which is not feasible in the context of this scientific analysis
and would lead to biased answers. For this reason, the original transcripts of the interviews
were used for this study and the respondents were only mentioned anonymously. The
interviewees are therefore only referred to as “Interviewee” in the following.
The analysis of the interviews showed that all decision-makers were generally aware
of digital change in banking and particularly aware of digital changes and the issue of
digitalisation in their own banks. Banks are even hiring a board member specifically
focused on digitalisation. “[ . . . ] many banks are now hiring a Chief Digital Officer. There is a
new position that was actually created” (Interviewee 20—Section 49).
This move towards more digital orientation and new approaches to customer service
may lead to a complete shift in personnel structures in some departments. As a result,
employees no longer work in the bank branches that have been known for decades, but are
now able to offer a full range of services independently of their geographical location. This
development takes into account the efficiency concept of the branch and the increasing
competition, which, according to the assessment of the interviewees, will lead to far-
reaching structural changes within the banking sector in the future. However, with constant
digital development, the question arises how a branch without customer traffic can be
physically maintained in the future and what justifies the maintenance of cost-intensive
branches. These descriptions from the interviewees indicate that they actively try to react
to corresponding market developments within the scope of what is economically feasible
and to develop further. One interviewee confirmed that his bank is actively addressing new
trends and issues in order to take them into account in its corporate focus. “In particular, we
are very active in the field of trend scouting and in identifying and evaluating the strategic relevance
of various trends and technologies. [ . . . ] We have an innovation lab where we do trend scouting
and observe about 170 trends and technology duration” (Interviewee 26—Section 29). Another
manager emphasised that the integration of employees into the thinking process of change
is fundamental and that this should be secured and promoted by the necessary freedom of
thought and continuous exchange between employees and management. “[ . . . ] we have set
up a room of ideas where every employee, from trainee to board member, can say: ‘I have a cool idea
and would like to present it.’ There is a group of supporters who—for example, when trainees come,
are perhaps not yet very good at presenting—support the employees in creating a small presentation.
And then they can present directly to the board of directors” (Interviewee 14—Section 139).
The interviews also revealed that cooperation with external partners plays an impor-
tant role in the further development of banks and that cooperation within the banking
association is fundamental, but also leads to a slow-down due to increased structural com-
plexity. Banks today cooperate with partners such as university institutions, which support
them in the further and new development of applications, as well as future strategies,
and provide them with the necessary know-how for digital corporate transformation. In
particular, the participation of the target group at the university level, such as the actual
developers of the applications, helps to align and develop the bank’s range of products
and services to the needs of the customer, which contributes to a tailor-made fit of banking
solutions—at least for the younger generation of customers. One interviewee mentioned:
“In two years we have made a lot of progress in this area, and in the meantime we have widened
the channels. In other words, we have provided a chat solution to improve customer contact. At
the same time, a video service consulting branch is also starting this year. This means a branch in
which there are no employees any more, but the branch is looked after centrally from the customer
dialogue centre with extended service times from 08:00 to 18:00. [ . . . ] What we have achieved for
ourselves is to work together with universities, often here in the region, to design things in a way
that is appropriate for the target group. [...] Together with a university, we have developed an app in
the youth market” (Interviewee 17–Section 79).
The digital transformation in banking is progressing at an ever-increasing pace. Far
away from interface requirements forced by regulatory laws, just a few institutions are
creating application interfaces on their own initiative, which enable them to integrate
innovative business models and/or products. “We also support via the Banking-API (Ap-
plication Programming Interface) such innovations as Google Assistant or Alexa and many other
things” (Interviewee 21—Section 14). However, the main focus is still on realising stronger
networking, which ultimately benefits both the banks themselves and the bank customers.
It enables a more comprehensive range of products and services. Digitalisation, in this
context, implies not only the development of internal approaches and ideas, but also the
intended cooperation with other credit institutions, external partners, and FinTechs, which
is to be enabled and realised via application programming interfaces “[ . . . ] so that we
can also integrate our technical processes, which we have for product closures and transactions,
into third-party platforms in order to network more closely with each other” (Interviewee 21—
Section 14). It seems obvious that the management has recognised digital transformation
and is focusing on it accordingly in its banking activities.
In order to adopt and pursue new digital approaches, far from merely perceiving
trends, managers are responding by elaborating in detail practical approaches that will
facilitate and fundamentally enable future digital implementation. This process, however,
requires the availability of appropriate resources, as implementation is ultimately only
made possible by making them available. On this point, a large discrepancy is evident
between small, medium, and large banking institutions—major challenges of a possible
holistic digitalisation can be advanced together in a more targeted way. For a small
bank, topics such as “quantum computing”, which could be highly important within
the next 10 to 15 years, simply cannot be tackled today from a financial point of view,
since the costs exceed the available resources. It is crucial, though, that banks, regardless
of their size, systematically address tomorrow’s digital issues today, so that they can
”have the necessary know-how to deal with them proactively at the appropriate time. There is
no doubt that banks definitely want to know what is happening and have a clear opinion on it”
(Interviewee 26—Section 29). Knowledge and the ability to react are important here; “[ . . . ]
one has to be familiar with the complex issues in good times, otherwise one cannot react accordingly”
(Interviewee 26—Section 33).
Today’s bank management attributes an important role model to the employees, as
they implement digitalisation in the company in a targeted manner and bring it closer to
the customer. It is, therefore, essential that employees are informed regarding technological
applications and know how to apply them properly and safely. Employees and customers
have to be taken along and introduced to the technology. Since this has to be done
holistically and not only for specific target groups of customers and employees, it is
important to differentiate between individual groups of both customers and employees
and their individual age structures to introduce them to the technology in a targeted
manner. Specific educational programmes and events for customers and employees are
being introduced in banks to facilitate the implementation of digital approaches and,
ultimately, bank digitalisation, as well as to enhance the acceptance and integration of
employees and customers. “Not long ago, we held a digitalisation fair just for our employees.
[...] It cost a lot of money. So we did it professionally, with professional providers. Just to show
our employees what’s available. There were various stands with different focal points. So that you
have topics that you can understand. Online brokers were there. There were 3D glasses where
you can look at a house that we sell. And things like that. A multitude of things. And for us it is
just important to take the employees with us. They know that digitalisation is destroying jobs [...]
the trade fair has certainly contributed to the fact that the mood in our company is quite good at
the moment. So the employees are going with us. One of the main problems is that some of our
employees don’t deal with things privately” (Interviewee 27/28—Section 47).
According to the executive management, internal experts prove to be of great value,
as they can deal with a specific digitalisation topic, communicate it to the respective
individuals, and support them accordingly. “For example, we have set up a programme with
other partners, called Digital-Tiger, where we have specially trained one employee in each market
area as a Digital-Tiger (an expert). He then serves as a multiplier, which also serves to encourage
the employees more [ . . . ] We actually have seven experts in the entire company, e.g., in the
corporate customer area and real estate centre. There is an expert in every branch office who is
regularly trained. Then, in turn, he transfers the already existing knowledge and new knowledge or
new products to the employees” (Interviewee 13—Section 45). This development indicates
that the relevance of a topic is becoming increasingly important and that the necessary
financial and humanitarian resources are being mobilised in order to pursue and promote
topics internally. However, this is, without question, highly dependent on the individual
perception, understanding, and acceptance of the management on the topic as well as on
the general financial situation of each individual bank. It also depends on the availability
of trained employees, the actual specialists, as people have to be mobilised for (change)
projects and show the will to change and participate. In addition, the respective corporate
“change culture” within the bank is crucial, as employees also have to be prepared to be
led by specialists and managers and should not be completely opposed to new methods
and change. Only through such a culture can new topics or digitalisation be realised. New
topics and, ultimately, digitalisation can only be realised holistically and effectively if these
framework conditions are met. “In a traditional company like ours, with people who are very
security-oriented and very conservative in their attitudes, this is a challenge in itself. That means
accompanying this human resource development or mentality development culture, development
process” (Interviewee 17—Section 29).
Furthermore, the technological framework conditions have to be in place for digital
change and have to meet certain prerequisites, but this still fails because of problems such
as IT infrastructure, both on the bank side and on the side of the infrastructure provided
by the state. “You first have to create the basis [...] so there’s a big hurdle of servers and WLAN
or LAN speed. You first have to create this for every branch in principle, for every stationary
location [...]. And that is a big challenge, all the more in rural areas. [...] The wires have not
been laid in the past. Twenty years ago, no one needed a strong internet connection. So now the
question is: Is it possible from a constructional and technical point of view? What does it cost? In
principle, that’s where it starts” (Interviewee 10—Section 49). In order to be able to address a
complex topic such as digitalisation in an individually customer-oriented way, banks are
currently still very much dependent on the cooperative associations and linked to them on
a technological level. There is less focus on independent in-house innovation development,
which could enable a more tailored transformation on its own. Nevertheless, there are
banks that have dedicated themselves to the topic. “We started a few years ago, for example,
to set up an Innovation Lab in our company. [...] Then, of course, we also started to adopt the
new technologies and implement agile concepts in our company. This led to the fact that at some
point people said that we wanted to create a whole programme and ultimately digitalise the whole
company” (Interviewee 31—Section 57). This approach presupposes the availability of the
resources necessary for implementation, but supports the independent development of
the corporate identity and can, ideally, address the needs of customers and employees in a
precise manner at the same time.
The approaches discussed above represent a variety of elements that, from a man-
agerial perspective, are or can be seen as fundamental for a holistic, fast, and tailor-made
digital transformation and at least promote it significantly.
Multiple measures are being taken to promote digital transformation within banks.
These include, in particular, measures to introduce employees and customers to new digital
processes and technology in general in order to integrate these two groups into the process
of transformation. However, funding that is sustainable at the technological level and
that leads to a faster technological transformation cycle or to the reduction of regulatory
research or its process-optimised (over)fulfilment is only addressed in a limited, global
manner and does not address specific issues.
The measures currently taken and the managers’ descriptions indicate that technologi-
cal integration itself seems to be the most effective tool for successful change. This way of
thinking is shared by large and small banking institutions alike. It is apparent, however,
that small banks expect membership in an association to be the factor that determines
success in further development, and that technological solutions should primarily be made
available centrally. However, independent development and implementation of digital
approaches are hardly taken into account in small-to-medium-sized institutions (SMEs),
and are sometimes not even considered for reasons such as affiliation with an association
or the requirement for excessive expenditure. This goes against the self-development
approach of applications based on open-source solutions, which can now be realised at
low cost and could be used, at least regionally, if an appropriate interface were provided.
These considerations, therefore, contrast with the understanding of management and
their arguments against self-development. “Simple issues have to be implemented quickly
and directly. Of course, this currently overwhelms many employees. But this will change
slowly and continuously in three or four years. Open source, for example, now offers so
many possibilities that you can virtually develop software in a very short time. The cost
driver has to be assessed quite differently today than 15 years ago. The reason for this is that
IT development is now possible in days, weeks, and months and no longer in years. Until
then, banks often had three- to five-year development plans” (Interviewee 33—Section 20).
If one considers the prevailing view of the current management, however, it is pri-
marily the situation of a resource-related discrepancy between small and large banks that
weakens rural banking structures and increasingly drives these small banks into an associ-
ation structure and, thus, into increased dependency. Nevertheless, this view cannot be
supported on the basis of the above-mentioned low-cost technological approaches, such as
open-source technologies and an ever more widespread API and interface structure.
Measures such as staff and customer fairs on technology topics, specially trained
staff who supervise digital topics, creative rooms, and innovation labs are approaches
that can be implemented efficiently and in a resource-saving manner within banks and
can contribute to direct development. The innovation lab, admittedly, is associated with
volatile costs, depending on the particular use and programmatic design, which should
be carefully examined. However, the increasingly standardised interface programming,
APIs, and open-source approaches can also improve and optimise the entire internal bank
process structure, as an accelerated and targeted integration of applications of new offers
is ultimately made possible. The first approaches mentioned are, from a creative point of
view and a resource-conscious leadership approach by the management, especially easy to
implement and equally easy to realize.
With regard to the findings on “Complex technology and increased regulation”, there is
a need for banks to catch up in order to implement digitalisation in a competitive and
sustainable way so that they can become even more digital in the future. A few individual
approaches by banks demonstrate that there are technologies that allow developments to
take place at low cost. “Open source offers many new potentials” (Interviewee 33—Section 60).
The only thing that needs to be done is to find and attract the appropriate IT staff who are
specifically trained to deal with these issues. “In order to develop digital business models that
represent a unique selling proposition, not only central but also decentralised IT know-how is needed.
Central IT development alone will not be sufficient in the future” (Interviewee 33—Section 17).
6. Conclusions and Further Research

In this study, qualitative findings were combined with best-practice approaches from
the banking sector with regard to digitalisation and the barriers that arise in this context.
Here, for the first time, qualitative derivations were made that require further investigation.
The interest of the interview participants, as well as their voluntary and open-minded
participation in the study, once again underlines the importance of this explorative ap-
proach. The results also show a wide-ranging, still-young field of research, which needs
further attention. This is underlined by the problematic nature of the literature analysis
and the need to draw on derivations from sectors with similar challenges. Based on the
present results, it is suggested that the identified transformation/implementation barriers
and the reasons for a prevailing discrepancy between perceived and actual responses to
digitalisation should be analysed and scrutinised in detail in further research. It could be
the case that the large number of barriers identified limits the possibilities for interpretation,
so a further reduction of the subcategories could be considered. There is also the possibility
that other influencing variables can be identified.
In addition, management perceptions of the scale of barriers could be studied in more
detail and practical transformation approaches could be analysed in more depth. Studies
could also focus on examining banks and their management more deeply in terms of
their approaches to digital transformation and identify further best-practice approaches.
Furthermore, it is recommended that, in future studies, the results should be examined
with a larger number of participants in all methodological approaches to maximise the
possibility that further recommendations can be derived on the basis of existing bank
structures or their business models. The differences between individual banks could
provide insights to obtain more detailed results on barriers to implementing digitalisation.
The development of a comprehensive normative model for scientific and sectoral en-
richment would be desirable. It would also be advisable to quantitatively record individual
correlations between main and sub-barriers and to implement sustainable aspects in the
research approach. An additional topic for further research is the study of the impact of
digital transformation on the sustainable growth of banking organisations. This topic does
not seem to be addressed in sufficient depth; a thorough investigation of the preconditions
for digital transformation, which are prerequisites for sustainable development, is crucial.
The development of a questionnaire is indispensable for the implementation of further
quantitative studies so that analyses at the main barrier level or even studies of sub-barriers
can be enabled. These further approaches could lead to the enrichment of not only the
investigation of digital transformation, but also the banking sector in general, and could
enable further industry studies, including in other industry sectors.
Author Contributions: Conceptualization, F.D.; methodology, F.D.; formal analysis, F.D.; investi-
gation, F.D.; resources, F.D.; data curation, F.D.; writing—original draft preparation, F.D.; writing—
review and editing, F.D.; supervision, M.Š. All authors have read and agreed to the published version
of the manuscript.
Funding: No external funding.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Informed consent was obtained from all subjects involved in the
study.
Acknowledgments: We would like to thank all interview partners for their open participation.
Conflicts of Interest: The authors declare no conflict of interest.
Appendix A
Number of
Main Category Sub-Code Code Description
Sub-Codes
No public funding is known or available for the (further) development of
No public banking technologies. It is assumed that banks have the necessary financial
Benefits 27
funding resources to implement digital transformation themselves and, therefore, do
not need support.
Customer Customers have concerns and reject digitalisation in general. 1
Customer acceptance and trust in the application/technology varies from person
Acceptance 18
to person and is an essential factor that has to be created and considered.
More and more is expected from and offered to the customer. However,
State of the art 6
Customer customers are not always able to use the technology to its full extent.
Based on their different ages, customers have different knowledge and
Age structure 13
expectations towards digital technology and possibilities to use it.
The customer’s behaviour is changing in the sense that he/she is evolving
Usage
from an analogue to a digital customer. Services, especially digital ones, 12
behaviour
should be available at all times, but old services should be retained as well.
Number of
Sub-Codes
Customer expectations are very diverse. On the one hand, some
expect the permanent availability of technology and, at the same
Expectations time, the possibility to continue to use personal consultants. On the 28
other hand, others do not expect multi-channel offers. Both,
however, are characterized by the expectation of security.
Today’s customers are often well informed, but this knowledge as
Knowledge 3
a whole is very heterogeneous, though increasing.
Non-existing Customers are not informed about the existing possibilities and
5
Customer knowledge are not familiar with banking and technology issues.
The customers have knowledge and are well informed. Knowledge is
Existing knowledge acquired online. For certain topics, no consultants will be needed in 2
the future.
Digitalisation and the resulting consequences of branch closures
Customer proximity 12
lead to a minimization of personal customer contact.
Digitalisation leads to a reduction in customer retention and
Switching behaviour loyalty. Customers become more open-minded for new things and 9
“everything from one single source” is less important than before.
Employees will be needed less in the future. However, digital
transformation is not possible without a minimum number of
employees, who, in turn, can only be maintained with appropriate
Employee 14
compensation (war for talents). Existential worries, fears, and
inhibitions arise, which are individually pronounced for
each employee.
Employees are often overwhelmed by digitalisation and reach
Flexibility their limits. In the future, they need to be flexible and fast enough 9
to adapt to and deal with new developments.
Employees do not show acceptance at the beginning of a change
and often reject the new at first. Employees have to be involved in
Acceptance the change process and learn how to deal with digitalisation and 20
corresponding innovations. It is fundamental that employees
should use software and hardware themselves.
Relevant qualifications for employees are not sufficiently available,
Employee and this turns out to be a disadvantage for the implementation of
Qualification 16
complex digital topics and the general digital change in banks.
Qualifications will have to be adapted in the future.
There are not enough people on the market to fill open IT
Availability vacancies for a decent salary and, ultimately, to work on digital 15
issues and enable digital transformation.
Friendliness Employee friendliness could be improved. 1
The age structure in banks will change in the future. Increasingly
obsolete employees will lead to the need for digitalisation. It is
assumed that the majority of predominantly older employees will
Age structure 10
slow down or even prevent change. Young people, on the other
hand, will not, as they have grown up with digital media
and processes.
Digitalisation leads to increased employee and process
Transparency 3
transparency, which, in turn, is feared by employees.
The banking world and its range of products and services is
becoming increasingly complex. Here, the complexity of the offer
determines whether analogue or digital consulting services are
Product and Bank
used. Customers often obtain information online and then contact 9
complexity
their bank offline. Complex topics can currently only be digitally
modelled to a limited extent. However, numerous simple
processes are also still offered exclusively in analogue form.
Man-made mistakes lead to widespread effects in a centrally
Human uncertainty organized (IT) infrastructure. Digitalisation can increase
Knowledge and 2
factor transparency and minimise error, but it can also promote them
Product and create uncertainty.
Experts on digital issues are (still) available internally to a certain
Experts extent and are fundamental for digital transformation in banking.
19
(internal) Decentralised digitalisation will require more qualified personnel
in the future.
Number of
Sub-Codes
External (digital) experts/consultants are available to banks in
Knowledge and Experts large numbers. Universities also support banks. Both are available
23
Product (external) to banks for digitalisation projects if required. External
consultants usually charge high costs.
Investments in digitalisation require capital. The current market
Market situation situation poses challenges for banks: Only lower earnings are 8
being generated due to the interest rate policy.
The results of the digitalisation process cannot be measured yet.
Future market developments and uncertain success are
Market uncertainty 11
determined by the customer. Banks are concerned about the right
Market corporate positioning, as there are few sustainable approaches.
The current market situation poses challenges for banks. With
Market power their increased market power, they can block competitors and thus 2
defend their position.
The increased competitive pressure due to technical and
Market/competitive
market-driven developments will increase in the future, not only 22
pressure
between FinTechs and banks, but also between banks themselves.
Employees are actively involved in digitalisation issues by
management and are encouraged to develop and implement their
own ideas. The management creates the appropriate space for this.
Employee involvement 18
In the end, they can (better) identify themselves with the
transformation and become a part of it. It is fundamental that
Participation employees should apply the technology themselves.
Customers are seen as partners. They are actively involved in
development and in ongoing processes. By involving them at an
Customer integration 15
early stage, their needs can be taken into account and they can
actively participate in shaping the process.
FinTechs
(partners/ FinTechs can be both partners and competitors. 5
(non-)competitors)
FinTechs have become much more like partnership-based
companies (partners) that want to advance their own ideas
FinTech (partners) 8
through cooperation and are looking for banks to support them
in this.
Banks will continue to exist in the future and will be increasingly
FinTech digitalised through constant development. FinTechs should be
10
(non-competitors) seen as a complementary approach and not as a competitor that
poses a threat to banks.
Competition is increasing in the financial industry and FinTechs
FinTech (competitors) are now seen as competitors, forcing banks to react and bring their 22
own digital solutions to the market.
Banks seek proximity to external FinTechs or try to become active
themselves in the FinTech sector with their own developments.
Banks want to
These young companies very often offer innovative solutions: 23
cooperate
Accordingly, banks would like to cooperate with them in order to
Strategy/ develop themselves further.
Management Banks are unwilling or unable to cooperate with FinTechs for
Banks will not/cannot organisational or interface reasons. The dominant positioning of
6
cooperate banks is intended to make market access more difficult
for FinTechs.
Banks and FinTechs need customers and their data. There is a risk
Dependence on
of dependence on external providers and loss of control over their 5
providers
own business. Only in exceptional cases is cooperation favoured.
Banks are reacting to market and competitive situations and are
Reaction to trying to keep up with the latest developments in analogue and
market digital services. They rely on systematic development, which is 26
development implemented with the help of internal innovation management.
This approach is embedded in their strategy.
In a large and differentiated corporate structure, banks have to
Complex corporate meet multiple and often complex customer needs of different age
structure and multiple groups. Expectations of permanent analogue and simultaneous 16
interests digital accessibility increase the complexity of today’s
banking business.
Number of
Sub-Codes
Banks will have to restructure themselves in the future and
rethink both new and traditional approaches. This requires
(Re)structuring change processes that are appropriate to the bank’s size. 19
Restructuring leads to obstacles/resistance among employees and
customers, which are very much shaped by individual humanity.
Reputation Banks are concerned about negative reputational consequences if
2
worries the cooperation with or participation in FinTechs fails.
Managers avoid the risks associated with new issues such
Risk aversion 1
as digitalisation.
Banks often organise themselves in a central association structure
and can thus position themselves more strongly as a group.
Organizational However, this leads to dependencies on central services and
27
dependency technologies and limits decision-making options. The
individuality of each bank is lost, as organisations dictate the
corporate guidelines.
Due to the historically evolved and centralised organisational
structures of banks within a banking group, the speed of reaction
Reaction speed 23
of an institution depends strongly on centralised developments.
Banks are therefore slower in digitalisation compared to FinTechs.
Digitalisation is an essential part of the current strategy of
financial institutions. One is aware that the future of the financial
Digitalisation strategy markets will be strongly influenced by digital topics. The basic 28
prerequisite for sustainable development in the future must be
created today.
Digitalisation leads to transparent markets and products. Offers
Transparency and banks can be compared by the customer, allowing them to 4
choose the most suitable solution.
Banks are shaped by the historical corporate culture and tradition
that has been established over many decades. This is precisely
Corporate what determines the processes and the orientation of banks.
Strategy/ 17
culture/tradition Young customers, in particular, are questioning this. Management
Management must rethink and a change in leadership from old to young
is required.
The management sees the importance of the topic of digitalisation
and takes the need for further development and its influence. In
Management their opinion, digitalisation will contribute to process
33
perception optimization and automation in the future. It is assumed that
banks are on the right track, but only a small part of what is
possible has been implemented to date.
Resources are not available for digital in-house and further
Resources not available 13
development of products and approaches.
Resources
Resources for digital developments are limited. 4
limited
Resources are available for further digital development or are
Resources available 16
mobilized if the company positions itself digitally accordingly.
Resources must be allocated within established structures in such
a way that they finance existing and new approaches adequately
Resource allocation 19
and that institutions do not fall behind. Misallocation can slow
down important developments such as digitalisation.
Digitalisation and the infrastructure required for it is associated
with high costs, which a bank has to finance independently.
Investment decisions are closely monitored, as they are ultimately
Costs 18
borne by the bank’s customers. Potentials such as cost savings in a
corporate structure can be achieved through digitalisation. The
costs can be seen as an obstacle.
The decision-making process is time-consuming. Many internal
and external interests have to be taken into account. Additionally,
Decision-making decisions are influenced by umbrella organisations. The boards of
16
process directors of banks still make their decisions largely independently,
but the basis is increasingly integrated to create greater acceptance
for change.
Number of
Sub-Codes
Banks face technological developments and the associated risk of
disruption in an increasingly fast and competitive market. They
Strategy/
Disruption have to adapt to technologies and, at the same time, to the pace of 15
Management
digitalisation, without losing their own identity, in order to
survive and remain competitive.
Usability is essential for customers in digital applications.
Useability Customers must be taken into account—for certain customer 3
groups, usability is not a given.
The technical and cost-related expenditures for banks for the new
and further development and adaptation of solutions are very
Technical effort 13
high. This makes digitalisation more difficult, which ultimately
becomes an obstacle.
Regulatory requirements must be met by banks by law. This
Regulatory confronts them, from an internal and external perspective of
21
obstacles further development, with major obstacles that slow
down digitalisation.
Banks and FinTechs are becoming more and more networked, and
customers are becoming more and more transparent, particularly
Data through free access and exchange of data. In this context, data are
protection/security and subject to special protection requirements, which poses a 18
Technology and integrity challenge for both banks and FinTechs. This is slowing down
Regulation digitalisation. Banks are subjectively more strongly monitored
and are more in public focus than FinTechs.
The implementation of new processes and technologies in banks,
taking into account legal requirements and the growing IT
Implementation
infrastructure, causes implementation problems of digital 13
difficulties
approaches and slows down or even completely inhibits
digitalisation in banking.
The public infrastructure does not meet the requirements for
Public infrastructure 6
comprehensive digitalisation of banks.
The demands on banking IT are increasing together with the
speed of technology cycles and the associated technological
Outdated IT
developments. Banks will never be able to keep up with the latest 7
infrastructure
developments. Legacy IT infrastructures place limits on
digitalisation in banks.
Centrally provided technology and corresponding interfaces are
State of the not sufficiently developed to allow technical approaches to be
11
art/integration (today) integrated into banks without problems and to enable
holistic digitalisation.
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Digital Transformation in Banking: A Managerial Perspective on Barriers to

Article in Sustainability · February 2021

Florian Ulrich-Diener Miroslav Spacek

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Department of Entrepreneurship, Faculty of Business Administration, Prague University of Economics and

Sustainability 2021, 13, 2032. https://doi.org/10.3390/su13042032 https://www.mdpi.com/journal/sustainability

Table 1. Share of payment instruments in Germany.

Revenue 2008 Revenue 2011 Revenue 2014 Revenue 2017

Financial technology (companies called FinTech(s)) plays an essential role here. It is

created a new paradigm in which information technology represents a meaningful driving

3.1.1. Interview Process

Table 2. Numerical interview data description.

Duration Bank Experience

3.1.2. Data Preparation

3.2. Analysis Procedure

These were determined as Table 3.

3.3. Structure of the Interview Guideline

3.4. Conducting the Survey

4.2. Consensus Coding

4.3. Calculation of Inter-Rater Reliability

Sustainability 2021, 13, 2032 13 of 26

5.1. Contributions to Theory

Table 5. Category summary.

Main Category Number of Sub-Categories

5.2. Contributions to Practice

6. Conclusions and Further Research

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