The future of Digital Banking in Europe 2023
Following the 2023 edition of Money 20/20, Finextra crafted a report entitled “The future of Digital Banking in Europe 2023”, which was just released during summer, focusing notably on Fintech. The report features key insights from renowned companies and experts, all discussing how digital banking will continue to evolve in Europe.
In the introduction of the report, the experts first explain that growth across the European fintech industry is fluctuating and that therefore, the record levels of fundings and deals seen in 2021 won’t happen any time soon. Moreover, 2022 saw rising interest rates, a cost-of living crisis and continued geopolitical instability.
It is also highlighted that “this macroeconomic deterioration has however resulted in access to financing becoming more difficult”. Yet Europe’s fintech sector remains at the core of the financial services industry, rather than at the fringes as it was once before.
According to McKinsey, “fintech ecosystems in all European countries were able to attain the same level of performance as the best in the region, the upside could be substantial”. The number of fintech jobs would grow significantly, the volume of funding would more than double, and valuations would grow by a factor of 2.3.
One can also underline that Europe is really supportive to Fintechs and that regulatory frameworks like PSD2 and GDPR create a level playing field and promote innovation. As explained by Kilian Thalhammer, Global Head of Merchant Solutions – Fintech and Platform, at Deutsche Bank, “from open banking, underpinned by the payments service directive, through to fully scalable (and now instant) cross-border payments across SEPA markets, Europe has been a pioneer in fostering a dynamic fintech landscape.”
The 31-page long report dives into the future of digital banking in Europe, by trying to answer to several key questions and concepts:
- How can digital trust be built amid global unrest and uncertainty in Europe?
- What needs to be considered when mapping and scaling a European digital banking strategy?
- What technologies are being used by European providers to ensure smooth interactions? (just a small hint: “API technology works in conjunction with modern payments infrastructure to enable fast, secure, and reliable B2B transactions instantly across the globe”)
- How can the potential for Open Finance in Europe be unleashed and become a reality?
Source: Finextra