Nordea Bank : Financial Darwinism and the dawn of the Digital Banking Superstore

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.