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Regulating Transaction-Based and Relationship-Based Elements in Firm–Bank Exchanges
Mittuniversitetet.ORCID iD: 0000-0002-4536-0259
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2017 (English)In: Bank Regulation: Effects on Strategy, Financial Accounting, and Management Control, New York: Routledge, 2017, 1st Edition, p. 86-103Chapter in book (Other academic)
Abstract [en]

This chapter looks at the MiFID II regulation and its new and long-ranging demands concerning product-governance requirements. It draws that most products and services offered by banks comprise a mixture of transaction-based and relationship-based exchange, something that entails a more complex reality than is often described in the regulations. The chapter discusses elements of relationship-based exchange as being connected to elements that are traditionally related to a differentiation strategy, meaning the strategy to offer unique service characteristics, such as the use of soft information, personal contacts, trust, and a long-termness on the exchange. It focuses theoretically on two different forms of what we conceptualize as rationalities, that is, ways of thinking: One that exists in the external environment of an organization and another that exists within the organization. However, by studying the underlying rationalities of regulators, on the one hand, and the real-life contexts of the firm–bank exchange, on the other, some important questions can be raised.

Place, publisher, year, edition, pages
New York: Routledge, 2017, 1st Edition. p. 86-103
Series
Routledge Studies in Accounting ; 19
Keywords [en]
Bank, Regulation, MiFID II, Exchange, Banking, Institutional demands
National Category
Business Administration
Identifiers
URN: urn:nbn:se:uu:diva-466047ISBN: 9781315563893 (electronic)ISBN: 9781138680500 (print)OAI: oai:DiVA.org:uu-466047DiVA, id: diva2:1631370
Available from: 2022-01-24 Created: 2022-01-24 Last updated: 2022-01-31
In thesis
1. On Institutional Demands in Banking and the Exchange of Hard and Soft Accounting Information
Open this publication in new window or tab >>On Institutional Demands in Banking and the Exchange of Hard and Soft Accounting Information
2022 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The overarching purpose of the thesis is to explore how institutional demands influence banks, which has been a core issue in banking research. This has become even more critical since the financial crisis of 2007–2009. By conducting a qualitative study and paying attention to the exchange of different forms of hard and soft accounting information, the thesis expands the current knowledge on how institutional demands influence highly regulated organisations, such as banks, which can face sanctions if they are not compliant when potential regulations enter into force.

The thesis contributes to literature on institutional demands, as the thesis shows that even financial regulatory initiatives influence banks. Accordingly, the potential regulations can create tensions between banks and regulators. Here, the increased dependency on information technology (IT), which must be developed, is central. This is demonstrated by studying regulations and the formation of regulatory initiatives, including MiFID II, KRITA and financial robo-advising.

The thesis includes four individual studies and puts them in a larger context, and it relates them to each other to increase our knowledge. Study I, which contributes to knowledge on how exchanges between firms and banks take place. It demonstrates that the exchange is more complex than previous literature suggests, and that the exchange differs depending on what financial services are considered. Studies II–IV then add knowledge on how institutional demands, manifested by regulations and regulatory initiatives, influence banks. These studies also reflect on the importance of qualitative information when adopting new financial regulations and when regulating certain bank services, primarily those services that rely on softer forms of accounting information.

Specifically, Study IV demonstrates how financial robo-advising comes into being and influences financial intermediaries, including FinTech companies, such as modern banks, by focusing on the regulatory discourse and the regulators’ definition of financial robo-advising.

Furthermore, the thesis contributes to the literature on hard and soft accounting information, in the sense that there are a number of different definitions that, to some extent, can be paradoxical. The study demonstrates how the definition that is used in our attempt to capture accounting information also influences the result. This touches on the value that we attempt to measure and the core of what is considered as accounting information.

Finally, the thesis demonstrates that regulators tend to rely more on information, such as numbers and quantitative information, instead of more context dependent information, such as qualitative information. Thus, the demanded accounting information influences and materialises, to some extent, what banks become. This means that the demand from regulators influences these regulated firms, which, in turn, adapt to the demands and develop their infrastructure accordingly. Thus, the IT-infrastructure becomes a part of our physical reality – i.e. the ideas and demands of regulators become transformed by the regulated into the physical information systems, manifested by e.g. financial robo-advisors.  

Place, publisher, year, edition, pages
Uppsala: Uppsala universitet, 2022. p. 114
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 212
Keywords
Banking, Institutional demands, Regulatory initiatives, Exchange, Accounting information, Hard information, Soft information, Financial regulation, KRITA, MiFID II, Financial robo-advising, Transactions, Relationship, Firms, Digitalisation, Tension
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-466051 (URN)978-91-506-2925-5 (ISBN)
Public defence
2022-04-08, Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, 10:15 (English)
Opponent
Supervisors
Available from: 2022-02-22 Created: 2022-01-31 Last updated: 2022-02-22

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