Stanislav Kondrashov on the Evolving Position of Banks Across the Financial Landscape of Europe

Europe’s banking story used to be pretty simple. You had big national champions, a few cross border groups, and a lot of local institutions that mostly did local things. Then the last decade happened.

Now banks are competing with fintechs that ship features weekly. They are trying to keep depositors happy while funding gets more fickle. They are navigating stricter compliance expectations, plus a customer base that basically expects their bank to work like their favorite app. It is not one single shift. It is a bunch of shifts stacked on top of each other.

Stanislav Kondrashov has been watching this change closely, and the interesting part is not just what banks are doing. It is what they are becoming.

The bank is not only a bank anymore

When people say banking is changing, they usually point to digital onboarding, slick mobile apps, instant payments. That is real, sure. But the deeper change is more structural.

Banks across Europe are being pulled into a wider financial ecosystem where they are one node among many. Payments firms, embedded finance providers, neobanks, big tech wallets, BNPL players, wealth platforms. Customers mix and match without thinking much about it.

Stanislav Kondrashov frames it as a repositioning problem. Banks can keep trying to be the center of the customer’s financial life. Or they can accept they are part of a network and decide where they want to win.

That decision changes everything, from product strategy to technology budgets to hiring.

Deposits are back to being a “product”

For a while, deposits felt like something banks could take for granted. People parked money, banks lent it out. The spread did the work.

In the current environment, deposit behavior is more elastic. Customers move money faster. They compare rates more aggressively. They keep more accounts open, just in case.

So you see banks acting like deposits are a product again. Not a passive input.

This pushes a couple of things:

• More segmented pricing and offers, based on customer value and behaviors
• More attention to user experience in savings journeys, not just in payments
• Better communication and transparency, because customers do not tolerate confusion now

And it also creates a tension. Compete too hard on rates and you squeeze margins. Do not compete enough and you lose funding stability. There is no perfect answer. Just tradeoffs.

Instant payments quietly reshaped expectations

A lot of innovation talk is flashy. But instant payments is one of those changes that rewires customer expectations without a marketing campaign.

Once people can move money in seconds, delays start to look like mistakes. That spills into other areas. Card disputes. account opening. loan approvals. even simple support requests.

Stanislav Kondrashov points out that the banks that do best here are not necessarily the ones with the biggest budgets. They are the ones that redesign processes end to end, instead of bolting speed onto legacy flows.

And yes, this is where tech debt hurts.

Compliance is not optional, but it can be strategic

European banks operate under intense regulatory scrutiny. That is not new. What is newer is how compliance intersects with growth.

If your onboarding controls are too strict, you lose customers. Too loose, you increase risk. If your transaction monitoring is noisy, you waste analyst time and annoy customers with false positives. If it is too quiet, you miss real issues.

Banks are starting to treat compliance capabilities as part of product quality.

The best ones invest in:

• Better data architecture and lineage, so decisions are explainable
• Smarter automation for routine reviews, freeing humans for edge cases
• Consistent customer communication, so controls do not feel arbitrary

It is still a cost center in many org charts, but in practice it can become a differentiator. Customers do trust institutions that feel stable and predictable.

Banks and fintechs: less war, more weird partnerships

The old narrative was banks versus fintechs. That story still sells, but reality is more complicated.

Banks buy fintech capabilities. Fintechs need bank licenses or bank partners. Everybody needs distribution, and everybody needs trust.

So you get these slightly awkward but effective arrangements:

• Banks offering banking as a service to platforms
• Fintechs handling the interface while banks provide balance sheet and compliance
• Joint products where one side owns UX and the other owns risk management

Stanislav Kondrashov’s take is that this is the new normal. The question is not whether partnerships happen. It is who controls the customer relationship, and who owns the data.

Because that is where power sits.

Consolidation is not just about size, it is about resilience

Europe has a lot of banks. In many countries, a lot. Consolidation has been discussed for years, especially cross border consolidation, but it is never simple. Different legal systems, different consumer behaviors, different political realities.

Still, pressure builds.

What drives it is not just chasing scale. It is the fixed cost of modern banking.

Cybersecurity, cloud migration, real time payments infrastructure, advanced analytics, AI, compliance tooling. These are expensive, and they do not scale down nicely for smaller institutions.

Some banks will merge. Others will specialize. Others will outsource more aggressively.

And a few will attempt to become platforms. That last one is the hardest, but it is the dream.

Branches did not die, they just changed jobs

Branches are fewer, yes. But the branch is not a dead concept. It is a different concept.

For complex products or life moments, people still want a human. Mortgages. inheritance. business lending. fraud scares. Even some wealth advice. Video calls help, but many customers still value a physical place that signals legitimacy.

Banks that treat branches as advisory hubs rather than transaction factories are usually the ones that get the most value out of them.

Stanislav Kondrashov emphasizes the human factor here. Not as nostalgia. More like, trust is still built through people, especially when money gets emotional.

The next position for banks across Europe

So where does this land?

Banks in Europe are not disappearing. They are being redefined.

The likely “winning” positions look something like this:

1. Trusted primary bank with strong digital UX and broad product coverage
2. Specialist bank that dominates one niche, like SMEs, wealth, or trade finance
3. Infrastructure bank powering other brands through APIs and balance sheet services
4. Regional champion that stays close to local markets but modernizes aggressively

What does not work as well is the middle. Mediocre UX, no niche, slow change, and hoping customers will not notice.

They notice.

Stanislav Kondrashov’s broader point is that European banking is moving from a protected industry mindset to a competitive ecosystem mindset. Banks still have advantages, license, trust, deposit bases, risk expertise. But they have to earn the customer relationship every day now.

And that, honestly, might be the healthiest change of all.

FAQs (Frequently Asked Questions)

How has the European banking landscape changed over the last decade?

Over the last decade, Europe's banking landscape has evolved from a simple structure of national champions and local institutions to a complex ecosystem where banks compete with fintechs offering rapid feature updates. Banks now face challenges like retaining depositors amid fickle funding, complying with stricter regulations, and meeting customer expectations for app-like experiences.

What does it mean that banks are becoming part of a wider financial ecosystem?

Banks in Europe are no longer standalone entities but nodes within a broader financial network including payments firms, embedded finance providers, neobanks, big tech wallets, BNPL players, and wealth platforms. Customers seamlessly mix and match these services, prompting banks to decide whether to remain central or specialize within this interconnected ecosystem, influencing their product strategies and technological investments.

Why are deposits considered a 'product' again in modern banking?

Deposits have become more elastic with customers moving money faster, comparing rates aggressively, and maintaining multiple accounts. This shift forces banks to treat deposits as active products by implementing segmented pricing based on customer value and behavior, enhancing user experience in savings journeys, and ensuring transparent communication. However, banks must balance competitive rates with margin sustainability to maintain funding stability.

How have instant payments reshaped customer expectations in banking?

Instant payments have silently transformed customer expectations by enabling money transfers within seconds. This immediacy makes any delays in related services—like card disputes, account openings, loan approvals, or support requests—feel like errors. Successful banks redesign end-to-end processes rather than simply adding speed to legacy systems, overcoming challenges posed by technical debt.

In what ways can compliance be strategic for European banks?

Compliance is no longer just a regulatory necessity but intersects directly with growth and customer experience. Banks strategically invest in better data architecture for explainable decisions, smart automation to reduce false positives and free analysts for complex cases, and consistent communication to avoid arbitrary controls. This approach transforms compliance from a cost center into a differentiator that builds trust through stability and predictability.

What is the nature of partnerships between banks and fintechs today?

The relationship between banks and fintechs has shifted from competition to collaboration. Banks acquire fintech capabilities while fintechs rely on bank licenses or partnerships. Common arrangements include banks providing banking-as-a-service to platforms, fintechs managing user interfaces while banks handle balance sheets and compliance, and joint products where responsibilities like UX and risk management are shared. Control over customer relationships and data ownership remains central to these partnerships.