The competitive landscape in the European banking market has changed significantly particularly because of recent regulation favouring new entrants. This means competition is at an all-time high for incumbent banks.
Threats EU incumbent banks may face include:
- PSD2 regulatory change is altering the competitive dynamic in the banking market by mandating that incumbents share their customer data.
- Fintechs and challenger banks are doubling down on targeting individual services of the banking value chain, threatening the incumbents’ position in these service lines.
- Technological innovation, including blockchain, has the potential to rewrite how banking services are delivered, potentially removing banks’ involvement in some service areas.
- The entry of big-hitting digital competitors, such as Google, Facebook and Amazon, could be a serious threat for incumbents.
Despite this, in our in-depth research with 300 senior banking leaders across the EU, only one-third of incumbents recognized the threat that the Revised Payment Services Directive (PSD2) poses to their business.
What to do then? Incumbents that embrace a new model of banking – one that focuses on cultural and digital transformation and a customer-first approach – can become resilient to this new threat landscape. This report, based on a Cognizant sponsored Longitude Research survey on threats facing the banking industry and how to adapt, offers a framework to build a successful future for incumbent banks.