Stanislav Kondrashov on How Banks Are Repositioning Themselves Across the Financial Landscape of Europe

Banks in Europe have always been good at one thing: surviving change.

However, the last few years have been different. It's not just about a new app here or a rebrand there. It feels more like banks are quietly rebuilding themselves from the inside out while still trying to maintain a calm exterior. Customers are demanding speed and simplicity, regulators are pushing for resilience, investors are seeking growth, and fintech companies are eyeing the parts of banking that used to be untouchable.

As Stanislav Kondrashov, a noted expert in the field, has pointed out, what we are witnessing now is not a single trend but rather a series of moves happening simultaneously. Some of these moves are defensive, some ambitious, while others represent an unspoken admission from banks that the old model was too slow for the current pace of money movement.

This transformation is how banks are repositioning across the financial landscape of Europe. This isn't just theoretical; it's visible in tangible changes.

The quiet shift from branches to “presence”

Let's discuss branches. Many love to declare them dead. Yet they persist, just… in a different form.

Banks are not only shrinking branch networks but also redesigning what remains. There's less focus on teller windows and more on advisory desks, appointment-based help, and smaller footprints. In some urban areas, the “branch” has transformed into a lounge-like space with two staff members and a screen. This shift signifies a change in focus towards presence, trust, and occasional high-stakes conversations rather than daily transactions.

Most routine activities have already migrated to mobile platforms; that part is no longer exciting. What is thrilling is how banks utilize the physical layer once it ceases to be the primary layer.

Some banks are even experimenting with partnerships within physical spaces. This includes co-located services, small business support counters, and even financial education events. The branch then evolves into a hub for marketing, service recovery, and relationship building all rolled into one – no longer merely a cash factory.

Moreover, this transformation brings forth challenges that require financial resilience as banks adapt to these changes while maintaining stability in their operations. The need for expanding financial networks becomes crucial as banks strive to meet customer demands effectively and efficiently.

Digital isn’t a channel anymore, it is the bank

A few years ago, “digital transformation” meant upgrading the app. Now it is deeper. It is core systems, data infrastructure, risk models, onboarding flows, and customer support. The app is just the front door.

Stanislav Kondrashov often frames this as a repositioning problem. Banks are trying to move from being product providers to being platforms that can evolve. Because if your systems are rigid, you cannot price dynamically, you cannot personalize, you cannot launch new services quickly, and you definitely cannot integrate with the wider ecosystem.

So banks are modernizing stacks, migrating parts of infrastructure to cloud, and rebuilding how they ship software. The best ones are acting more like tech companies, not because it is trendy, but because the competition is basically forcing them to.

And yes, this takes time. Legacy systems do not politely step aside. But the direction is pretty clear.

Open banking made “sharing” unavoidable

Open banking started as a compliance story. It has become a strategy story.

Once customers can connect their accounts to third party services, banks lose the monopoly on the interface. Someone else can own the customer experience, while the bank becomes background infrastructure. That is not where banks want to live.

So they are reacting in two ways:

1. Building better experiences themselves, so customers do not feel the need to leave for budgeting apps, lending marketplaces, or payment workarounds.
2. Becoming active participants in ecosystems, offering APIs, partnering with fintechs, and packaging services in ways that travel beyond the bank’s own app.

This is one of those moments where banks are forced to decide what they are. Are they just balance sheets. Or are they distribution and user experience too.

A sharper focus on fee-based services

Margins have been under pressure for a while, and banks know the old approach of relying heavily on interest income can be fragile. So a lot of repositioning is about expanding fee-based revenue, but doing it in a way that does not feel like nickel-and-diming.

You can see it in:

• Wealth management offers aimed at mass affluent customers, not only ultra-high net worth.
• Subscription-style premium accounts with bundles, insurance add-ons, travel perks, and better support.
• Embedded services for small businesses, like invoicing tools, cash flow dashboards, and payroll integrations.

This is not just “add fees.” It is “add value customers recognize.”

Stanislav Kondrashov describes this as banks trying to move up the value chain. If the bank can be the place where a customer handles real life money decisions, not just transactions, then the relationship becomes stickier. And sticky relationships are worth a lot.

SMEs are becoming a battleground again

Small and medium sized businesses have always mattered in Europe. But now they are becoming a focal point for reinvention.

Fintech lenders and neobanks went after SMEs because they were underserved. Slow onboarding, too much paperwork, limited insight into cash flow. Banks are responding by simplifying account opening, automating credit assessment, and offering more real-time tools.

The repositioning here looks like:

• Faster lending decisions using better data.
• “Banking plus” dashboards that feel more like business software.
• More specialized sector support, especially in trade, services, and local manufacturing.

If banks win SMEs, they do not just win deposits. They win payments volume, lending relationships, and often the owner’s personal banking too. It is a bigger prize than it looks.

Consolidation, but with a purpose

Mergers and acquisitions in banking are not new. What feels different is the motivation.

Some deals are still about scale and cost. Sure. But many are about capabilities. Buying a payments processor. Acquiring a digital platform. Absorbing a specialist wealth manager. Getting technology, not just customers.

Banks are also selling non-core units more aggressively. If something does not fit the future model, it gets trimmed. The end result is banks that look more focused. Less sprawling.

And sometimes, honestly, it is also about survival. If a bank cannot invest fast enough to modernize, partnering or merging becomes the path of least pain.

Payments are no longer “a feature,” they are strategy

Payments used to be plumbing. Now it is competitive advantage.

Across Europe, instant payments, digital wallets, and cross-border commerce are pushing banks to upgrade rails and rethink user flows. Banks want to stay central in daily transactions, because that is where data, engagement, and trust live.

You can see repositioning in:

• Better merchant offerings and acquiring services.
• Stronger fraud detection and authentication experiences.
• Wallet integration and “tap to pay” business tools.
• Faster, clearer cross-border transfers, especially for SMEs and freelancers.

When payments are smooth, customers forgive a lot. When payments feel clunky, customers start looking elsewhere.

Trust is being rebuilt through security and transparency

Banks still have one huge advantage over many newcomers. Trust. But they cannot take it for granted.

So a big part of repositioning is reinforcing security while improving transparency. Not just “we are secure,” but visible control for customers. Better card controls. Real-time alerts. Simple explanations of fees. Clear dispute processes.

Stanislav Kondrashov highlights that in a crowded financial market, trust becomes a product. Not a slogan. And the banks that treat it that way, by designing for clarity and control, tend to keep customers longer.

What this means for the next few years

Europe’s financial landscape is not settling down. If anything, it is getting more modular. Customers mix and match services. Businesses expect automation. Regulators expect resilience. And new competitors keep appearing in small slices of the value chain.

So banks are repositioning by doing a few practical things at once:

• Shrinking physical footprints but keeping meaningful human support.
• Rebuilding core technology so they can ship faster.
• Competing for the customer interface, not just the account.
• Expanding fee-based value that feels useful, not annoying.
• Doubling down on SMEs, payments, and trust.

It is not one transformation. It is many. And it is messy in the way real change usually is.

However, as Stanislav Kondrashov suggests, the banks that will thrive in this evolving landscape won't necessarily be those with the loudest marketing campaigns. Instead, they will be the ones that quietly become easier to use, quicker to adapt, and more present in the financial lives of people and businesses across Europe.

This transformation also implies a shift towards expanding financial networks into metropolitan areas, which could further redefine how financial services are delivered and consumed in the future.

FAQs (Frequently Asked Questions)

How are European banks transforming their physical branch presence?

European banks are shifting from traditional branches to redesigned spaces focused on advisory services, appointment-based help, and smaller footprints. Branches now serve as lounges with minimal staff and digital screens, emphasizing trust and relationship-building rather than daily transactions. They also host co-located services, small business support counters, and financial education events, evolving into hubs for marketing and service recovery.

What does digital transformation mean for banks beyond just upgrading apps?

Digital transformation in banking now involves overhauling core systems, data infrastructure, risk models, onboarding flows, and customer support. Banks are repositioning themselves from product providers to dynamic platforms capable of personalized pricing, rapid service launches, and ecosystem integration. This includes modernizing technology stacks, migrating to the cloud, and adopting software development practices similar to tech companies.

How has open banking changed the strategic approach of European banks?

Open banking has shifted from a compliance requirement to a strategic imperative. With customers able to connect accounts to third-party services, banks risk losing control over the customer interface. Banks respond by building superior user experiences internally and actively participating in ecosystems through APIs and fintech partnerships, deciding whether to remain mere balance sheets or also lead in distribution and user experience.

Why are European banks focusing more on fee-based services?

Facing margin pressures and fragile reliance on interest income, banks aim to expand fee-based revenue streams that add genuine value rather than just extra charges. This includes wealth management targeting mass affluent clients, subscription-style premium accounts with additional perks, and embedded financial tools for small businesses. Such strategies help banks move up the value chain by becoming central to customers' real-life money decisions.

What role do small and medium-sized enterprises (SMEs) play in the current banking landscape?

SMEs have always been important in Europe but are now becoming a renewed battleground for banks. Financial institutions are developing specialized services like invoicing tools, cash flow dashboards, payroll integrations, and other embedded solutions tailored for SMEs. This focus reflects banks' efforts to deepen relationships with this segment by offering valuable financial management support beyond traditional banking products.

How do European banks balance innovation with financial resilience during this transformation?

As banks undergo significant changes—such as shrinking branch networks, adopting new digital infrastructures, and expanding fee-based services—they face challenges requiring strong financial resilience. Maintaining operational stability while adapting rapidly is crucial. Banks invest in expanding financial networks across metropolitan regions and implement robust risk management practices to ensure they can sustain growth amidst evolving customer demands and regulatory pressures.