The fallout from the Global Financial crises as evidenced by the Lehman Brother’s bankruptcy coupled with the ensuing bailouts of banks by the American and European governments signified the need for innovative approaches in finance. Researchers identified important risk factors such as the use of unregulated option, hedge and computer trading as key drivers to the economic downturn that significantly affected the banking sector (Gianiodis, Ettlie & Urbina, 2014). In response to the ailing financial downturn, recent research identifies the adoption of open-innovation models as the most effective intervention strategy in the field of financial services.

The open innovative model is a service modernization strategy that aids in the establishment of a sustainable banking sector. The model consists of two sub-models that is the outside in model and the inside out model (Gianiodis, Ettlie & Urbina, 2014). Through the adoption of this intervention strategy, global banks can focus on service innovation instead of the traditional innovation of financial instruments thereby increasing their efficiencies in the value chain and improving their customer experience. The deregulation and openness of banking that is supported by the model also enables the banks to gain a competitive advantage through the diversification of the banks operations and the increased profits obtained by operating on a global scale. In the article, the researchers identify the utilisation of the two sub-models in two Spanish banks that enjoy a global reach, which are the Santader and the BBVA (Gianiodis, Ettlie & Urbina, 2014). Through the outstanding performance outcomes by the two banks, researchers suggest that the open innovation strategy is an effective resource management model that is beneficial to the sustainability of financial services, particularly the banking sector. In conclusion, the open service approach is an important innovation model in strategic management that facilitates organisational change and firm performance in the ever changing global financial market.