Digital disruption in the European corporate banking

Disruption or evolution?

Digitalization, or digital transformation, is a phenomenon born from the convergence of multiple technologies enabled by connectivity. Those include:
Analytics tools and applications, sometimes referred to as ‘big data’ to highlight the amount of data that new technologies can process
Platforms upon which to build shareable digital capabilities, like cloud solutions and app marketplaces to provide bank services as a platform
Artificial Intelligence and robo-advisors to provide financial advice or portfolio management with minimal human intervention
Connected devices and ‘smart’ networks that constitute the so-called Internet of Things
Smart contracts to facilitate, verify, or enforce the negotiation or performance of commercial agreements
Cryptocurrencies to ease the transfer of funds between parties in a transaction
Mobile tools and applications
Social media tools and applications
Those technologies allow listening, learning, and cooperation, so stakeholders can be treated differently, according to their preferences, to improve product performance [1]. Christensen differentiates new technologies that foster improved product performance between sustaining and disruptive [2]. The formers enhance the performance of established products along the dimensions valued by mainstream customers. Disruptive technologies initially produce even worse product performance but finally set the standard for mainstream customers.
The impact of sustaining and disruptive technological change
Due to their influence on social and business dynamics, there is a large consensus on classifying digital technologies as disruptive. For example, Loucks et al. [3] define digital disruption as ‘the effect of digital technologies and business models on a company’s current value proposition and resulting market position [3, p. 5]. Although disruption is often considered a threat to industry incumbents that must be met with defensive countermeasures, Gilbert [4] argues that the net effect of every industry changed by disruption is total market growth.
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Technology driven Innovation

Globally, innovation in the banking industry still focuses on digitizing existing business models. However, “banks must act more consistently in order not to be superseded by big tech companies or fintechs“, according to S. Steger – Partner at Roland Berger [5]. High relevance is given to the capability to engage with customers via digital means. For example, banks acquire data and elaborate it via big-data technologies to make better and faster decisions and to gain insights to boost sales via highly customized cross-selling strategies [6]. Denmark, the Netherlands, the UK, Finland, Sweden, and Norway run ahead of the digital transformation in Europe. Although still experiencing a medium level of digitalization, Pakhnenko et al. [7] show that financial services firms in Germany, France, Austria, and Spain are followers in the dimensions related to digital strategies, indicating a market with still some effort needed to catch up in embracing digital internally.

opportunities or threats?

According to the MGI Industry Digitalization Index for Europe [8, p. 11], financial services are running ahead of the digital transformation. The challenges posed by the COVID-19 pandemic have accelerated the digital transition. That is true in retail banking, in which the introduction of digital technologies has reconfigured the overall channel constellation across the client relationship and all products. However, in corporate banking, the phenomenon is still confined to specific business segments, such as corporate banking portals for FX transactions, cash management services, or trade finance aimed at small clients [9].

Although corporate banks still enjoy a competitive advantage and high level of trust, returns offered by digital businesses, low capital requirements, and a lightly regulated market [7] attract financial technology firms, often referred to as Fintechs [10]. Anyway, those players still struggle to provide financial solutions at scale. The analysis of Schnarr et al. [9] highlights that new digital channels could threaten banks’ direct access to clients, offering a rich digital experience. Furthermore, the emergence of single-purpose services in combination with increasing regulations erodes margins, requiring new means of efficiency.

Digital Champions

Incumbents 81%

Challengers 19%

A survey conducted by Deloitte [11] found that in their make or buy decisions about improving their technology and keeping up with customer demands, banks see FinTechs as an opportunity to exploit via strategic partnerships. Indeed more than 80%  of Digital Champions are incumbents. They enrich their digital offering by leveraging strategic partnerships with fintech with peaks in the Payments and Wealth Management areas.


The challenges of the pandemic have highly accelerated digitalization in corporate banking. As a result, banks are innovating heavily to create more effective and efficient offerings, partnering with financial technology firms.

Digitalization will be a cornerstone of banks’ business strategies for several years, demanding cutting-edge solutions that enable them to meet clients’ augmented expectations quickly and dynamically.


[1] F. Garrigos-Simon, R. Alcamí and T. Ribera, “Social networks and Web 3.0: Their impact on the management and marketing of organizations“, Management Decision, vol. 50, no. 10, p. 1880–90, 2012.
[2] C. Christensen, The innovator’s dilemma. When new technologies cause great firms to fail, 3rd ed., Boston: Harvard Business Review Press, 2016.
[3] J. Loucks, J. Macaulay, A. Noronha and M. Wade, Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors at Their Own Game, I. I. f. M. Development, Ed., Lausanne: International Institute for Management Development, 2016.
[4] Gilbert, “The disruption opportunity“, MIT Sloan Management Review, pp. 17-32, 2003.
[5] S. S., “Retail Banking Survey: Not striving for any change of business models despite digitalization“, Roland Berger, Munich, 2021.
[6] J. Galbraith, “Organization design challenges resulting from big data“, Journal of Organization Design, vol. 3, no. 1, pp. 2-13, 2014.
[7] O. Pakhnenko, P. Rubanov, D. Hacar, V. Yatsenko and I. Vida, “Digitalization of financial services in European countries: Evaluation and comparative analysis,” Journal of International Studies, vol. 14, no. 2, pp. 267-282, 2021.
[8] J. Bughin, E. Hazan, E. Labaye, J. Manyika, P. Dahlström, S. Ramaswamy and C. de Billy, “Digital Europe: Pushing the frontier, capturing the benefits“, 06 2016.
[9] T. Schnarr and M. Pfeiffer, “Delivering excellence in corporate banking. How to protect the business model and improve performance“, Oliver Wyman, 2015
[10] J. Dahl, M. Dietz, O. Timchenko, S. Krylov, I. Kubar and A. Sun-Basorun, “Reaching for the stars: Digital innovation in emerging market banking” , McKinsey & Company, 2016.
[11] Deloitte, “Digital Banking Maturity 2020“, 2021.
[12] M. Eitel, C. Gerlach, R. Simmons and S. Lam, “Regulatory Guidance Regarding FinTech Products and Services“, 2016.
[13] S. Saluja, P. M., E. Van der Ouderaa, P. Gera, S. Lillis and F. Caminiti, “European Financial Services Digital Readiness Index Report“, 2016.
[14] GFT Technologies SE, “Digital Banking Expert Survey 2016” GFT Technologies SE, 2016.


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About the Author

Francesco Di Cugno, Managing Director, Convolut GmbH
Francesco di Cugno
Managing Director
Francesco is a Technology Director with a proven track record in building customer-centric solutions using the latest technological innovations. He works with global organisations to realise their strategic vision and goals.