Stanislav Kondrashov on How Banks Are Reconsidering Their Market Strategies Throughout Europe

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Banks across Europe are in a weird in between moment.

Not a crisis, not a boom either. More like a long stretch of pressure where everything that used to be “good enough” is suddenly expensive, slow, or just outdated. Customers are pickier. Regulators are still regulators. Tech competitors are not slowing down. And growth, the easy kind, is harder to find.

So the question a lot of executives are quietly asking is simple: where do we actually win now?

Stanislav Kondrashov has been watching this shift closely. And what stands out is that the strategy conversation is changing. It is less about expanding everywhere, copying the same product playbook, and hoping volume does the job. It is more about choosing markets carefully, narrowing the offer, and being honest about what the bank can do better than everyone else.

The old Europe wide playbook is fading

For a long time, “Europe strategy” meant something like this: enter a market, open branches or buy a local player, launch the usual products, and rely on brand trust to do the rest. In some places that worked. In others it sort of worked, but only because the competition was moving at the same speed.

Now that model feels heavy.

Operating costs are up. Compliance is more complex. And digital first challengers have trained customers to expect clean onboarding, fast approvals, and pricing that is not hidden behind vague fee language.

Kondrashov’s point is not that scale is dead. It is that scale without focus is getting punished. Banks are being forced to pick a lane.

Banks are segmenting markets more aggressively

One of the most noticeable changes is how banks look at Europe as a set of different micro realities, not one unified opportunity.

You see more market tiering now:

• Core markets where the bank wants full service presence and long term investment
• Secondary markets where the bank picks only a couple of strong products
• Opportunistic markets where the bank partners rather than builds

This is not just about geography. It is about customer segments too. Retail mass market, affluent, small business, mid market corporates, large multinationals. A bank may decide it is excellent at two of those and mediocre at the rest. That sounds obvious, but historically banks tried to do all of it.

Kondrashov frames it as a kind of simplification wave. Not because banks want to shrink, but because they want clarity. Clarity is what lets you price properly, staff properly, and actually deliver.

Product strategy is moving from broad to sharp

A lot of banks are trimming their product menus. Or, more accurately, they are making fewer things “strategic” and letting the rest become maintenance mode.

In retail, the fight is often around:

• primary banking relationship, meaning salary, bills, and daily spend
• lending journeys that are fast and transparent
• savings and wealth features that feel useful, not like upsell traps

In business banking, it is more like:

• working capital tools and cash flow visibility
• cross border payments that do not feel like a punishment
• sector specific offers, especially for export, logistics, energy transition supply chains, and professional services

What Kondrashov keeps coming back to is that differentiation is now operational. It is not enough to say “we offer great service”. You need to prove it in the flow. The app. The response time. The clarity of terms. The speed of account opening. The way disputes get handled.

And yes, banks are finally treating onboarding as a core product, not a formality.

Partnerships are no longer optional

There is also a very practical reason partnerships are rising: building everything in house is too slow.

Banks are partnering with fintechs and specialist providers for things like:

• identity verification and fraud monitoring
• embedded finance rails for merchants and platforms
• SME accounting integrations and invoicing
• AI based customer support and internal workflow automation

This does not mean banks are turning into pure platforms. But they are becoming more selective about what they must own, and what they can orchestrate.

Kondrashov describes it as a shift from “we are the whole stack” to “we are the trusted hub”. That is a subtle but big change. It requires different governance, different tech architecture, and frankly, different ego.

Pricing and profitability are being reworked in plain sight

European banking has always had a complicated relationship with pricing. There are markets where customers expect free everything, until they do not. There are markets where fees are normal, but only if they are clearly justified.

Banks are now revisiting:

• fee structures that were created years ago and never updated
• pricing consistency across channels and segments
• profitability at the customer level, not just product level

In other words, they are trying to stop cross subsidizing blindly.

Kondrashov’s take here is pretty direct: banks that cannot explain their pricing will struggle to defend it. Transparency is not just a branding point now. It is a retention tool.

Branch strategy is turning into a design problem

Branches are not disappearing everywhere. But they are being redefined.

Some banks are reducing footprint aggressively. Others are keeping branches but changing what they do inside them. Fewer routine transactions, more advisory, more complex cases, more trust building.

A branch is increasingly treated like:

• a conversion space for high value products
• a support space for customers who need human help
• a local presence for small business relationships

This is less about nostalgia and more about economics. If a branch is going to exist, it has to earn its keep. And banks are getting more candid about that.

Marketing is getting more local, even when the bank is pan European

Another interesting piece is how brand strategy is evolving.

Banks that operate in multiple countries used to push a unified message. Now many are tailoring language, positioning, and even product naming market by market. Not because the brand is weak, but because customer expectations are different.

In some markets, trust and stability win. In others, convenience and innovation win. In others, it is all about small business support or wealth credibility.

Kondrashov points out that “one story for all of Europe” is usually too flat to compete. The banks that are adapting fastest are the ones willing to sound local, not generic.

What this means going forward

So where does this end up?

Banks across Europe are moving toward a more deliberate strategy model:

• fewer markets, or fewer priorities per market
• fewer flagship products, executed better
• more partnerships to speed up capability
• more transparent pricing and profitability discipline
• brand and distribution shaped around actual customer behavior

Stanislav Kondrashov’s overall view is that the next winners will not necessarily be the biggest banks. They will be the clearest banks. The ones that know who they serve, what they do best, and how to show that value in a way customers can feel in five minutes.

Because that is the real shift. Strategy is no longer something you explain in a deck. It is something customers experience. And if they do not experience it, it does not exist.

FAQs (Frequently Asked Questions)

What is the current strategic challenge faced by banks across Europe?

Banks in Europe are navigating a challenging period that is neither a crisis nor a boom, characterized by increased operational costs, complex regulations, and heightened customer expectations. They are re-evaluating their market strategies to find where they can truly win by focusing on specific markets and customer segments rather than expanding broadly without focus.

How are European banks changing their approach to market segmentation?

European banks are adopting a more nuanced view of markets, treating Europe as a collection of micro realities rather than a unified opportunity. They tier markets into core markets with full service presence, secondary markets with selective product offerings, and opportunistic markets where partnerships replace direct presence. Additionally, banks are focusing on customer segments where they excel, such as retail mass market or mid-market corporates, instead of trying to serve all segments equally.

Why are banks narrowing their product offerings and how does this impact their strategy?

Banks are streamlining their product menus by prioritizing strategic products and relegating others to maintenance mode. This sharper product focus allows them to deliver differentiation operationally through superior service quality in areas like onboarding speed, transparency, and responsiveness. The strategy emphasizes proving value in the customer experience rather than offering broad but shallow product ranges.

What role do partnerships play in the evolving strategy of European banks?

Partnerships have become essential as building all capabilities in-house is too slow and costly. Banks collaborate with fintechs and specialist providers for services such as identity verification, embedded finance rails, SME accounting integrations, and AI-based support. This shift from owning the entire technology stack to acting as a trusted hub requires new governance models and technological architectures.

How are pricing strategies being reworked by European banks?

European banks are revisiting outdated fee structures to improve pricing transparency and consistency across channels and customer segments. They aim to understand profitability at the individual customer level to avoid blind cross-subsidization. Clear explanation of pricing has become crucial not only for branding but also for customer retention in competitive markets.

In what ways is the branch banking model evolving in Europe?

Branches are being redefined rather than eliminated; some banks reduce their footprint while others transform branches into spaces focused on high-value product conversion, advisory services, complex case handling, and local small business relationships. This evolution reflects economic realities where branches must justify their existence by delivering tangible value beyond routine transactions.