The game is on in the Dutch banking scene

Banking in the Netherlands has, for many decades, been a play between three big banks. ABN AMRO, Rabobank, and ING have a wide portfolio of financial services, target many customer groups and are increasingly internationally oriented. Together, they have founded a strong financial services industry in the wider Amsterdam area.

The last several years have given rise to several banks with a narrower focus, such as Triodos bank geared at sustainability conscious consumers, KNAB (owned by Aegon) targeting the self-employed, and privately held Neobank Bunq for customers who value a digital service offering. The somewhat smaller Volksbank has also expanded its societal footprint with brands such as SNS Bank, Regio Bank, and ASN Bank.

This already diverse landscape further scattered by the many FinTechs using Amsterdam as a launch pad and financial services (open banking driven by PSD2) being integrated in other industries such as ecommerce and other lifestyle services.

The Netherlands is an attractive market for many reasons. Amsterdam is a talent hub, gateway to Europe and a home market full of early adopters. This even attracts global challengers such as N26 and Revolut, which are looking to gain traction in the Netherlands – following in the footsteps of what big tech and FinTech scaleups like Uber and Stripe have found in our market. Yet, it is a very crowded home market, so mostly remains attractive as an international hub. Passporting possibilities together with EU wide application of PSD2 will further strengthen Amsterdam’s position as a hub.

The three big Dutch legacy banks, normally referred to as incumbents, are not standing idly by either – Rabobank, for instance, has invested in many moonshot programs, collaborations with FinTechs and a big fund. In the retail market, a product called Peaks is one of their challenging propositions with international potential. ING has these fields covered too and strongly focuses on their international platform, with their productYolt already available in several European countries offering retail aggregation services. ABN AMRO Bank has some core collaborations with scaled-up FinTechs like Tink and Solaris Bank to foster retail and value added propositions. ABN AMRO’s own ventures have proven successful as well, for example with Tikkie, a payment request service with 5 million users in the Netherlands. Internationally, in the retail market, Moneyou has been scaled up as a mobile challenger proposition in both the Netherlands and Germany.

One can have such a similar analysis of each European country, where incumbents are being challenged and markets are opening up. It is striking however that all big banks focus on the same topics and have similar strategies. The question for the coming years is about how scalable banking is across countries. Of course, the tech should be scalable, but in many occasions local customs and local regulation (e.g. in lending) asks for a local approach. Many FinTechs and NeoBanks are breaking through this with speed and agility. It is conceivable that the UK challenger banks will need a hub outside London to scale to mainland Europe and that consolidation of bigger banks as now under construction in Germany is a future scenario. Banks would do well not to waste too much time in internal focus while merging - because the cards are being dealt now.

In the coming years there will be many opportunities for pioneers in the financial services industry. Clearly, PSD2, open banking and technology such as AI will drive this. The competition will be broader, but so will the opportunities. Ecommerce will move more into integrating banking and banking will move more into ‘banking as a service’ models. At the end of the day, it will be up to the consumer who gets the people’s vote. In the retail market they will both look at the best customer experience and who they trust their data with. PSD2 will break through the idea that you inherit your banking choices from your parents. This however does not mean everyone will switch, and the first year of open banking in the UK is showing this. At the very least, hurdles have been lowered and consumers will more easily test and use value added financial services.

In the coming years, having the consumer’s long term interest in mind, will pay off. The major trend in all industries is for consumers to be increasingly self-reliant: Do It Yourself. With financial services there remains a lot to improve, and technology is still not helping many consumers and businesses to have a strong sense of control and a feeling of wellbeing about their finances, let alone make future proof decisions. With the lines between industries blurring, payments have been made extremely frictionless and the hurdles to pay, after-pay, or using instalments are getting lower and lower. Spending will not be the problem, but conscious spending and saving wisely for future needs will be an opportunity area. Yes, data and customer centricity will play a role there. Advanced tech and design thinking will have to go hand in hand. Listening to and observing clients carefully is what rockstarted successful technology laden companies like Netflix.

Who will be the Netflix of the banking industry? It could be a bank, fintech, bigtech, or ecommerce company or in a combination. For retail banking it could be the one that cracks this nut: Banking is low interest, but money is not. Financial health, lowering financial stress is a big topic, but we all know behavior is the hardest thing to change. The good news is that it only takes simple changes to alter the way people relate to money which in turn can positively impact overall wellbeing. Let’s go for that positive nudges.

The game is on.

About Menno van Leeuwen

Menno van Leeuwen is a corporate innovator and prominent figure in the European fintech and innovation scene. Currently he is Head of Business & Customer Development at Moneyou. He developed the proposition Moneyou Go, a visually attractive app to manage your finances. Previously he was leading the innovation team at ABN AMRO.

About Moneyou

Moneyou is an innovative online financial service provider that makes it possible for clients to arrange their financial affairs anywhere and anytime. Customers can turn to Moneyou for products and services related to savings, mortgages, investments and loans. Moneyou was established in 2001, as an owned subsidiary of ABN Amro, in the Netherlands.