This article explores the role of open innovation in the banking sector. During recent years, many banks have recognized the need for this collaborative approach. Based on a critical analysis of Fasnacht’s theoretical model, this article examines the benefits and risks associated with open innovation in the banking sector. We show that open innovation offers several opportunities to banks and to customers. However, open innovation may be a threat to financial stability.
JEL Codes: O31, O34, L20, G21, G01