After two decades of steady but foreseeable change, the whole retail banking sector underwent unprecedented change in 2020 as a result of the COVID-19 pandemic. In this article, we will try to present some ideas of what are the most important development in retail banking strategy in Europe as we move slowly into an uncertain post-pandemic era.

The changed retail banking world – 2020

The retail banking sector provides financial services to consumers from the general public to enable them to handle their financial processes. In the conventional format, customer’s retail banking needs are met by street-level bank branches. Face-to-face interactions with bank employees handle services ranging from opening and operating accounts to arranging loans, credit or debit cards, safety deposit vaults, fixed deposits, etc. In 2020, the banks faced major disruptions because of the COVID-19 pandemic.
As a result of the COVID-19 pandemic, bank’s private customers need a seamless interface between their own banking facilities and internet-based e-commerce websites, product vendors, and services providers. This requires much more direct integration between them and customers’ accounts and will be the main drivers of change trends.

Likely trends in retail banking in Europe post-COVID

We believe that the top resulting retail banking industry trends are the following:

Digital transformation

Digital innovation to improve user experience was already progressing in the first two decades of this century, but the pandemic elevated this to the top trend owing to the need to isolate and distance people from physical contact in public. Digitized products and services became the core demand. They opened a new level of competition for the banks both between the traditional competitors and between the whole legacy banking system and the more agile digital e-banking sector.

Banking-as-a-Service (BaaS)

BaaS is a comprehensive concept that allows conventional banks to directly connect their infrastructure with digital banks and other third parties’ systems via APIs. In this way, they can unlock the open banking opportunity that is reshaping the global financial services landscape and incorporate this into their own environment.
Fintechs and digital banks have been encroaching on the legacy banking sector and disrupting traditional business operations. In reply, the more aware legacy banks have moved into the BaaS arena. BaaS platforms have emerged as a critical feature of open banking, providing a more comprehensive range of financial functions. In this way, legacy banks can meet the encroaching threat of digital banks by enhancing customer experience.

Data security and privacy

As banks have become more dependent on digital traffic, they are becoming increasingly vulnerable to cyber breaches and even deliberate attacks. They are required to vouch for their customers’ privacy and data security and are liable to damages in the event of any loss.
Cybersecurity for online banking applications and other digital payment channels has become a top priority for retail and Fintech companies in the retail banking industry.

Cloud computing

Conventionally, banks opted for an on-premises IT infrastructure, concentrating on security and availability. However, the new-age banking challenges have led banks to focus on cloud computing either fully or hybrid. This can raise operational efficiency, allow for reduced time to introduce new services, provide superior customer experience, and much more. Cloud technology is also improving security by always using the latest techniques to ward off attacks and avoid data leakage.


Although pressure for change in retail banking strategy in Europe may ease as they start to emerge from the pandemic, there can be little doubt that the past 18 months has radically affected the relationships between the legacy banks, their customers, and their emerging financial services sector. We are keeping a close eye on what the major players are doing and will have an ongoing stream of updates for you here so that you can stay ahead of any changes.

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