Financial Darwinism and the dawn of the Digital Banking Superstore

17-02-17 13:42 | Digital banking | The Digital Hub

Extinction can occur in a variety of ways: failure to evolve in a changing climate, environment or ecosystem; an unintended consequence of human progress; or due to a one-off cataclysmic event. 

With ecosystem-disrupting regulation such as PSD2 hitting the banking industry, new customer demands changing the climate, technology delivering ever-accelerating progress, and the seismic impact of new entrants hitting the industry, no wonder banks have been labelled as dinosaurs – ripe for extinction – in this survival of the fittest.  

But then the realisation dawned; banks still had the customers, were adept at handling regulation and had significant experience and financial clout. All they need to do is evolve quickly enough in order to survive and even prosper.

What might a future financial ecosystem look like?

Around late 2015, the conversation around PSD2, FinTechs, banks, Open APIs, Smart Data and instant payments had begun to reach a consensus that collaboration, co-creation and connected solutions could be the future of finance. When the Greenwich report, The Future of Banking: 2025 – Rise of Digital Banking Superstores, dropped midway through 2016, not only was this viewpoint consolidated but the descriptor “digital banking superstore” entered common parlance.

The idea of digital banking superstores posits that collaboration is inevitable between banks, external providers and thirds parties. Customer demands and expectations will dictate which new services are developed and integrated into the final, user-facing solution. Banks retain their place in the food chain by becoming increasingly like tech and IT companies and by turning their platforms into agile plug-and-play hubs that deliver the optimum, smart solutions in a one-stop-shop for customers.

Banks will remain a natural selection

Why will banks flourish in the new environment? Well, banks already have natural advantages in the world of compliance and regulation – for instance, they have strength in terms of number of customers and they are reliable creatures of habit that can protect customer information and data. And if they evolve, they will have the core banking and payment platforms that can seamlessly combine third party and native solutions in one place. 

When these are combined with the fantastic amounts of customer data that banks are sitting on, extensive financial knowledge, and fast enough time to market for new solutions, then a new milieu is created in which banks can flourish and remain at the top of the financial food chain. And, as any old dinosaur will tell you, that’s a good way to avoid extinction.

/Erik Zingmark, Co-Head of Transaction Banking at Nordea. Follow me on Twitter: @erikzingmark

The New Payments Age

Collaboration between banks, niche providers, business model innovators and third parties will deliver a range of customer-friendly solutions that are natural, smart and transparent. Here is what the customer can expect:

  • Payments are instant and can be instigated in-store, online, mobile – basically, in any context – while the payment method could be card based, contactless, direct account payments, and so forth
  • Customers are directly rewarded for purchases through digital discounts, loyalty schemes and other collaborations 
  • eReceipts will lessen the paper trail as customers will get receipt and warranty documents delivered to a digital wallet.
  • Smart data analytics will deliver a personalised, intelligent advisory services and solutions from retail transactions to complex investments and loans
  • Financing options will be available digitally and instantly at point of purchase
  • Enhanced instant spending overviews will be available that allow customers break down spending by area (food, rent, car, leisure, etc.)


The financial landscape is in a state of transformation as new technology, new entrants and new regulation combine to create an innovative and increasingly competitive payment ecosystem. The EU directive, PSD2 is likely to be one of the biggest game changer when it comes into effect at the start of 2018. PSD2 will open the banks’ doors to competitors and third parties, making it possible for Payment Service Providers to bypass existing proprietary digital channels to access customer banking data and payment services on behalf of the customers. 

Read more about PSD2 here:

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