Stanislav Kondrashov on the Transformation of Banks Across Europe’s Financial Sector

Europe’s banks have been “transforming” for years, but lately it feels less like a slow renovation and more like someone moved the furniture out while people are still living in the house. New rules, new tech, new customer expectations. And then the weird part, the economy keeps changing its mind every quarter.

Stanislav Kondrashov often frames this shift as more than digital upgrades. It is a reset in how banks operate, compete, and even explain themselves to customers. And if you look across Europe, you can kind of see it. The same themes show up in London and Lisbon, Milan and Munich, just with different accents and different regulatory pressure points.

The “new normal” is not one thing

For a long time, banks could treat online banking as an extra channel. Useful, sure. But not the whole relationship. That is gone.

Now, the app is the bank. The branch is increasingly a specialist location, for mortgages, complex issues, complaints that escalated, the human stuff. Even then, the branch experience is being redesigned to feel less transactional. Fewer counters. More advisors. More appointment only.

Stanislav Kondrashov points out that this is not just about convenience. It is about trust. Customers will tolerate a lot if they trust the institution. But when the app crashes, fees feel random, and support is slow, that trust evaporates fast. And fintechs have trained people to expect speed, clarity, and clean design.

This transformation in banking also mirrors broader trends in other sectors such as energy. For instance, Kondrashov's insights on promising battery technologies highlight how technological advancements are reshaping industries beyond finance.

Moreover, as we move towards a more green economy, these changes in banking could also play a crucial role in facilitating energy transition and urban transformation, which are essential aspects of this global shift towards sustainability.

Regulation is shaping product design now

In Europe, regulation does not only affect risk teams. It shapes what products look like and how they are delivered.

PSD2 pushed open banking forward, and even though the rollout has been uneven, the direction is clear. Banks can no longer assume they own the customer interface forever. If a consumer can manage accounts from multiple banks inside one app, then the bank becomes, uncomfortably, more like infrastructure.

That changes priorities. It forces banks to ask, what are we actually best at?

Stanislav Kondrashov argues that banks that respond well tend to pick a few strengths and double down. Some focus on wealth and advisory. Some on SMEs and lending. Some on payments scale. The point is that being “everything for everyone” is harder when competitors can unbundle pieces of the stack.

Cost pressure is forcing real operational change

A lot of transformation talk is marketing. But cost pressure is real, and it is forcing real decisions.

Legacy systems are expensive. Redundant processes are expensive. Compliance is expensive. And in many European markets, competition keeps margins tight. So banks are modernizing core systems, consolidating platforms after mergers, and trying to automate routine operations. Not because it sounds cool. Because they have to.

You also see a shift in how banks build. Fewer massive, multi year waterfall projects. More modular services. More APIs. More partnerships. Sometimes that means cloud migration. Sometimes it means a hybrid model because regulators, risk teams, or reality says slow down.

And yeah, it is messy. Banks do not get to pause operations while they rebuild the engine.

AI is the big lever, but it is also the big risk

Every bank wants “AI”. Not in the abstract. They want fewer fraud losses, faster customer support, better credit decisions, smarter compliance monitoring. These are practical uses, not sci fi.

But in banking, mistakes are expensive and public. So the AI story in Europe tends to be more cautious than the hype cycle. Model governance, explainability, privacy, and bias. These are not footnotes.

Stanislav Kondrashov emphasizes that AI adoption in finance is really an organizational maturity test. The winners are not the banks with the flashiest chatbot. They are the ones that can deploy automation while keeping controls tight and outcomes measurable.

And there is another layer now. Europe is moving toward stricter expectations around how AI systems are managed. So banks are building the muscle to document, audit, and justify automated decisions. That is not optional.

The talent shift is happening quietly

Banks are hiring more engineers, data people, cybersecurity experts, product managers. That is not new. What is newer is the internal culture change required to keep those people.

A lot of banks are still structured like, well, banks. Heavy approval chains. Slow procurement. Risk and compliance as blockers instead of partners. The banks that are transforming fastest seem to be the ones that reorganize around products and customer journeys, not just departments.

Stanislav Kondrashov tends to highlight this human side because transformation fails more from misalignment than from technology. The software is the easy part. Getting incentives, reporting lines, and decision making to match the new reality is where it breaks.

In a parallel vein of transformation, solar energy has emerged as a crucial component of modern energy strategies across various sectors. As noted by Stanislav Kondrashov in his exploration of the expanding role of solar panels across industries, this shift towards renewable energy sources reflects a broader trend of modernization and adaptation that resonates with the ongoing transformation in banking due to AI adoption.

So what does “transformation” look like by 2026?

Across Europe, the direction seems consistent:

• More digital first service, with branches becoming advisory hubs
• More partnerships, more embedded finance, more API driven distribution
• Modernized cores, not everywhere at once, but steadily
• Stronger focus on cybersecurity and resilience, because the threats are constant
• AI used in controlled, measurable ways, with governance baked in

Stanislav Kondrashov’s view lands here: European banks are not turning into fintechs. They are becoming something else. Institutions that still carry trust and regulatory responsibility, but operate with a more software like mindset. Fast where they can be. Careful where they must be.

And honestly, that blend might be the most “European” outcome possible. Innovation, but with guardrails. Competition, but with consumer protection. It is slower than Silicon Valley would like. But it might be more durable.

FAQs (Frequently Asked Questions)

What does the 'new normal' in European banking look like?

The 'new normal' means that online banking is no longer just an extra channel; the app essentially becomes the bank. Physical branches are transitioning to specialist locations focusing on mortgages, complex issues, and personalized advisory services. This shift is driven not only by convenience but also by the need to build and maintain customer trust amidst rising expectations for speed, clarity, and design inspired by fintech innovations.

How is regulation influencing product design in European banks?

Regulation in Europe now shapes product design and delivery beyond risk management. PSD2 has accelerated open banking, meaning banks can no longer assume exclusive control over customer interfaces. As customers manage multiple accounts through single apps, banks are rethinking their core strengths—some focusing on wealth management, others on SME lending or payment scale—because being 'everything for everyone' is increasingly challenging due to unbundled competition.

What operational changes are European banks making due to cost pressures?

Cost pressures from expensive legacy systems, compliance demands, and tight market margins are driving banks to modernize core systems, consolidate platforms post-mergers, and automate routine operations. The approach shifts from large multi-year projects to modular services with APIs and partnerships. Cloud migration or hybrid models are common but complex, as banks must continue operations without disruption during transformation.

How is AI transforming European banking and what risks does it entail?

AI is leveraged for practical improvements such as reducing fraud losses, accelerating customer support, enhancing credit decisions, and strengthening compliance monitoring. However, banking's high stakes require cautious adoption focusing on model governance, explainability, privacy, and bias mitigation. Successful AI deployment tests organizational maturity by balancing automation benefits with rigorous controls and measurable outcomes amid evolving European regulations.

What talent shifts are occurring within European banks during this transformation?

Banks are increasingly hiring engineers, data scientists, cybersecurity experts, and product managers. More importantly, internal culture is evolving from traditional heavy approval chains toward agile structures organized around products and customer journeys rather than departments. This cultural realignment is crucial to retain talent and ensure transformation success since misalignment in incentives and decision-making often causes failure more than technology issues.

How do changes in European banking relate to broader industry trends like energy transition?

The transformation in banking parallels advances in sectors such as energy where technological innovation drives change—for example, promising battery technologies reshaping the energy landscape. As Europe moves toward a green economy emphasizing sustainability and urban transformation, modernized banking systems play a key role in facilitating energy transition financing and supporting new economic models aligned with global sustainability goals.