Why are traditional banks suddenly looking like Fintechs?

Jul 27

Traditional banks across Europe are rapidly evolving to resemble fintechs, driven by shifting consumer expectations, competition from digital-native platforms, and regulatory changes. Younger generations prefer seamless, mobile-first financial experiences, pushing legacy banks to adopt or acquire fintech-like capabilities to stay relevant. Banks like ABN AMRO, ING, and BNP Paribas are launching digital investment platforms or acquiring startups to tap into the growing demand for self-directed, low-cost investing. Case studies show widespread adoption of AI, automation, and hybrid advisory models that blend technology with human expertise.

The transformation isn’t just technological, it’s cultural and structural. Banks face challenges integrating new tech, navigating strict regulations, and reshaping internal mindsets. However, those who succeed in adopting agile practices and scalable digital strategies stand to gain a competitive edge. Emerging trends like embedded finance and personalized AI-driven services signal a future where banking is frictionless and integrated into daily digital life. For banks, it’s no longer about whether to digitize, but how fast and effectively they can do it.

The rise of digital investment platforms

Digital investment platforms are booming. In 2023 alone, global assets under management (AUM) in robo-advisors reached $1.8 trillion, and that number is expected to surpass $3.3 trillion by 2027, according to Statista. Europe is a key player in this growth, with countries like Germany, the Netherlands, and France leading the way in user adoption.

Why the sudden spike?
According to Deloitte, over 70% of millennials prefer mobile-first banking and investing solutions over in-branch services. Millennials and Gen Z prefer digital-first platforms that allow them to invest seamlessly and autonomously, they want an app that lets them invest in ETFs during lunch. Platforms like Robinhood, Trade Republic, and BUX have built loyal followings by delivering exactly that: easy, low-cost, and mobile-first investing.

Traditional banks, in contrast, have historically catered to older, wealthier clients through relationship managers and in-branch services. But that’s no longer sustainable. To compete, banks are launching or acquiring platforms that mimic fintech UX and offer low-barrier entry into investing. The key here is self-directed investing, letting users take control while still offering them institutional backing and regulatory assurance.

This convergence is transforming how banks are perceived. No longer just custodians of wealth, they are becoming facilitators of financial independence for the next generation . Given this rise in digital investment platforms, traditional banks are not just adapting, they are acquiring and partnering with fintechs to accelerate their own transformation.

To better understand the shift, let’s look at what industry experts are saying.
“Banks are finally realizing that user experience isn’t a luxury, it’s a requirement,” says Clara De La Cruz, Head of Digital Transformation at a leading European bank. “Fintechs have trained consumers to expect more. Now, banks must deliver.”

“Acquiring fintechs allows legacy banks to gain instant credibility in digital investing,” explains Jan Möller, CEO of FinBridge Consulting. “But true transformation requires cultural alignment—not just a new app.”

“AI will be the great differentiator,” notes Sofia Li, a senior analyst at FinTech Radar. “Those who can harness it responsibly will lead the next phase of financial services.”

Case studies: Banks embracing fintech models

Banks across Europe and beyond are embracing fintech through three primary strategic approaches: buying innovative fintechs, building digital-first platforms in-house, or partnering with startups to accelerate innovation. Each strategy reflects a different path to modernization, but all aim to meet customers where they are: online, mobile, and expecting seamless financial services.

BUY (Acquisitions to rapidly gain capabilities, users, or market share)

ABN AMRO acquires BUX: A move to capture younger, tech-savvy investors and integrate BUX’s commission-free trading capabilities. This acquisition not only provided instant access to a growing retail base but positioned ABN AMRO to compete with neobrokers through UI innovation and simplified onboarding, enhancing their Invest offering with millennial-focused functionality.
BBVA acquires Simple: While not investment-focused per se, this neobank acquisition laid the groundwork for BBVA's digital-first strategy. Learnings from Simple fed into BBVA’s digital wealth ecosystem, including its robo-advisor and open banking strategy, offering a blueprint for user-centric digital journeys in wealth.
HSBC acquires E*TRADE (Asia) and PayMe (Hong Kong): By acquiring E*TRADE’s regional business, HSBC bolstered its presence in Asia’s self-directed investing space. PayMe, meanwhile, extended HSBC’s reach in everyday digital payments, creating cross-sell potential into wealth services and laying a foundation for digital ecosystem play.
Goldman Sachs acquires Clarity Money: A key addition to Marcus, Clarity Money brought in strong personal finance UX and data aggregation tech. This move helped Goldman evolve Marcus from a savings-and-loans platform into a broader wealth management entry point with budgeting, goal setting, and robo-advisory features.
Intesa Sanpaolo acquires UBI Banca: Beyond scale, Intesa used UBI as a vehicle to accelerate digital transformation, including harmonizing investment offerings under a digital-first architecture. This played a role in boosting adoption of Fideuram Direct and streamlining legacy advisory systems.

BUILD (Internal development of digital-first platforms or brands) :

ING develops “ING Invest”: As part of its open banking ethos, ING Invest allows clients to access ETFs, mutual funds, and robo-advisory options within a clean, self-directed interface. ING also integrated with fintechs like Yolt for budgeting and PFM, making Invest a pillar in a broader digital financial wellness journey.
BBVA builds BBVA Invest: A homegrown robo-advisor targeting mass-affluent clients with automated portfolios and ESG-aligned strategies. BBVA Invest showcases how legacy banks can develop digital wealth capabilities in-house while leveraging existing trust and client data.
CaixaBank launches Imagin: Imagin goes beyond a youth-facing banking app. It incorporates goal-based investing, micro-saving nudges, and “missions” to drive behavioral engagement. It’s a testing ground for CaixaBank’s next-gen Invest experiences, particularly in embedded investing
HSBC builds Wealth Compass: A hybrid advisory platform that combines robo features with human touch. Piloted in select markets, it offers tailored portfolios and periodic check-ins with advisors. It reflects HSBC’s attempt to cater to mid-segment investors without full private banking costs.
Goldman Sachs builds Marcus: Marcus is a strategic reinvention: launching personal banking, robo-investing, and financial education tools in one platform. The goal is to lower acquisition costs for retail clients while funneling them upward into advisory and HNW services.
Intesa Sanpaolo launches Fideuram Direct: A digital platform for affluent clients offering self-directed investing, real-time portfolio tracking, and advisory add-ons. It’s backed by the bank’s Innovation Center, which incubates fintech collaborations and invests in AI-driven financial planning.

PARTNER (Collaborating with fintechs, often via APIs and open banking) :

ING partners with third-party fintechs – ING uses APIs to integrate external robo-advisors, ESG data providers, and PFM tools, creating a modular wealth platform. This flexible “plug-and-play” strategy keeps costs down while offering clients personalized investment journeys.
BNP Paribas explores fintech partnerships – Focused on augmenting its digital advisory model, BNP Paribas has piloted AI-based investment assistants and partnered with startups for mobile onboarding and KYC automation, paving the way for personalized, scalable wealth services.
Deutsche Bank collaborates with startups – Via its “Maxblue” platform, Deutsche integrates fintech features like thematic portfolios, robo-advice, and real-time insights. It also incubates fintechs through its Innovation Labs, using them to speed up R&D for Invest capabilities. It incorporates robo-advisory, thematic portfolios, ESG scoring, and real-time insights by integrating fintech modules and startup features via its innovation labs.
BBVA launches BBVA API Market – Beyond its robo-advisor, BBVA’s API platform enables third-party fintechs to connect directly with its banking infrastructure. Wealth partners can plug in budgeting tools, ESG scoring engines, and even goal-based investing modules—pushing BBVA into the embedded wealth space.

Here is a comprehensive comparison :

ABN AMRO

Fintech Play Type: BUY – BUX
Primary Markets / Geography: Netherlands + broader Benelux
User Scale: ~500k BUX users
Tech & Platform Capabilities Gained: Neobroker UI, fractional trading, youth-centric platform
ROI / Financial Impact: #1 Dutch neobroker; accelerated pan-EU retail banking expansion

BBVA

Fintech Play Type: BUY + BUILD + PARTNER
Primary Markets / Geography: Spain, U.S. (Simple), Italy expansion
User Scale: Simple: ~100k (U.S.); BBVA Invest clients 300–500k in Italy
Tech & Platform Capabilities Gained: Budgeting & goal features (Simple); robo-advisor; API Market for embedded wealth
ROI / Financial Impact: Simple influenced UX & innovation; Italy client base growing; embedded revenue streams emerging

CaixaBank

Fintech Play Type: BUILD
Primary Markets / Geography: Spain (neobank/imagin)
User Scale: ~4M imagin users
Tech & Platform Capabilities Gained: ETF brokerage, robo-advisor, savings, lifestyle services
ROI / Financial Impact: Top neobank in Spain; high engagement; improved cross-sell and low CAC

ING

Fintech Play Type: BUILD
Primary Markets / Geography: Netherlands & EU
User Scale: Limited public scale data
Tech & Platform Capabilities Gained: Easy Invest platform, ETFs and funds access via app
ROI / Financial Impact: Mixed user ROI outcomes; modest early adoption; anecdotal criticism of fees and returns

Deutsche Bank

Fintech Play Type: PARTNER
Primary Markets / Geography: Germany & Europe
User Scale: Maxblue client base (legacy)
Tech & Platform Capabilities Gained: Roboadvice, thematic/ESG modules, fintech integrations
ROI / Financial Impact: No public ROI; modernization momentum but specifics undisclosed

HSBC

Fintech Play Type: BUY + BUILD
Primary Markets / Geography: Asia (Hong Kong, plus global footprint)
User Scale: E*TRADE Asia users + PayMe users (HK)
Tech & Platform Capabilities Gained: Wealth Compass hybrid advisory, PFM aggregation, payments cross-sell
ROI / Financial Impact: Expanded digital wealth infrastructure; cross-sell potential but financials not public

Goldman Sachs

Fintech Play Type: BUY + BUILD
Primary Markets / Geography: U.S. & UK consumer banking
User Scale: Marcus: millions of retail customers; >$100 bn in deposits
Tech & Platform Capabilities Gained: PFM aggregation (Clarity Money); robo-investing; goal-setting tools
ROI / Financial Impact: Consumer banking loss of ~$3 bn since 2020; saved by deposits scale

Intesa Sanpaolo

Fintech Play Type: BUILD
Primary Markets / Geography: Italy (with EU expansion vision)
User Scale: Fideuram Direct ~78k users, €3 bn AUM
Tech & Platform Capabilities Gained: Cloud-native Isytech platform; AI advisory; embedded services
ROI / Financial Impact: Projected €450–500M incremental gross income by 2025

The emergence of hybrid models

The future of digital investment isn’t all robots and algorithms, it’s hybrid. That means combining the efficiency of automation with the nuance of human insight.
Blending Tech and Human Expertise : There’s still a large segment of clients who value a human touch, especially for complex financial decisions. Hybrid platforms aim to offer the best of both worlds. Customers might use a robo-advisor for day-to-day investments but still have access to a human advisor when they need it.

Take ABN AMRO, which offers a hybrid advisory model where automated recommendations are complemented by financial advisors for deeper consultation. This creates trust and ensures clients don’t feel abandoned in a tech-only environment. Think of it like this: a client sets up an ETF portfolio using an AI tool, but when markets turn volatile, they hop on a video call with a human advisor to discuss adjustments. That’s hybrid wealth management in action.

Scalable Personalization : Thanks to AI, hybrid platforms can now offer personalization at scale. Instead of segmenting clients by generic categories, they can deliver custom insights based on individual behavior. Advisors can use these tools to deepen client relationships, backed by real-time data and smart insights.

Boosting Client Retention : Hybrid models have been shown to increase client engagement and retention. According to a McKinsey report, financial institutions offering hybrid advisory services see up to 2x the client interaction rate compared to those relying solely on digital or human channels. For banks, this model is not only about serving more people, it’s about keeping them loyal in an increasingly competitive landscape.

Driving factors behind the shift

Banks are embracing fintech models in response to rising customer expectations, margin pressures, and growing competition from fintechs and Big Tech. At the same time, shifting profit pools and supportive regulation are making digital transformation in wealth management both a strategic and financial necessity.

Evolving customer expectations: Today’s clients, particularly younger, digital-native generations, demand seamless, mobile-first experiences that mirror what they get from e-commerce or lifestyle apps. They expect 24/7 access, real-time transactions, intuitive interfaces, and personalized recommendations. Traditional banks that fail to meet these expectations risk losing relevance, especially among emerging wealth segments.

Margin pressure and cost-to-serve: Low interest rates (until recently), increased capital requirements, and growing compliance costs have eroded margins in traditional banking. Wealth and asset management, especially when digitized, offers higher fee income and better scalability. Automated onboarding, KYC, and investment flows reduce cost-to-serve while opening new revenue channels.

Competitive threat from Fintechs and big tech: Fintech startups and neobanks have set a new bar for innovation and speed. At the same time, Big Tech players (like Apple, Google, and Amazon) are entering financial services via wallets, payments, and credit, raising the stakes. Banks must respond not only to new competitors but also to the new customer expectations these players create.

Shifting profit pools in the wealth segment: The democratization of investing has expanded the addressable market. Mass affluent and upper-middle-class clients, once underserved by private banks, are now a profitable segment thanks to scalable digital advice and self-directed investing platforms. Capturing this market requires a fintech-style approach to product design, distribution, and client servicing.

Regulatory evolution enabling platform models: New regulatory frameworks (e.g., PSD2 in Europe) have encouraged open banking, API integration, and client data portability. This enables banks to act as platforms, aggregating external fintech services or embedding wealth management into broader financial ecosystems.

The role of AI and Automation

AI and automation are no longer futuristic add-ons in wealth management, they are becoming foundational enablers of the platform model. For banks transitioning into fintech-style platforms, these technologies unlock scale, efficiency, and hyper-personalization.

Enhanced client profiling and personalization: AI algorithms can process vast amounts of client data,from transactions and holdings to behavioral patterns, to create rich, dynamic investor profiles. This allows for tailored portfolio construction, content delivery, and next-best-action recommendations that reflect each client’s unique situation and preferences.

Automated advisory and hybrid models: Robo-advisors powered by AI offer low-cost, rules-based portfolio management. But the real potential lies in hybrid models, where automation supports human advisors by surfacing insights, simulating scenarios, and streamlining compliance, ultimately enhancing the client-advisor relationship, not replacing it.

Operational efficiency and risk management: Intelligent automation (including RPA and NLP) is reshaping back-office processes such as onboarding, KYC/AML, reporting, and compliance checks. This not only reduces cost-to-serve but also minimizes human error and ensures faster, more scalable service delivery.

Proactive engagement and predictive analytics : AI enables proactive client servicing by predicting life events, churn risk, or financial needs based on patterns in data. Combined with behavioral nudges and real-time alerts, this empowers platforms to shift from reactive to anticipatory engagement, a key differentiator in digital wealth.

Ethical considerations and human oversight: As automation expands, so does the responsibility to ensure transparency, fairness, and explainability in AI-driven decisions. Especially in wealth management, where trust is paramount, banks must balance efficiency gains with governance, oversight, and clear accountability.

Challenges in the Transition

Despite the clear strategic rationale, banks face a number of significant hurdles as they pivot toward fintech-style wealth platforms. These challenges are not just technological — they touch core aspects of culture, governance, and market positioning.

Legacy infrastructure and siloed systems : Many banks are burdened by outdated IT architectures that were never designed for open, agile, API-driven integration. This hinders their ability to launch digital-native wealth offerings, interface with fintechs, or create seamless multi-channel experiences. Fragmented data across silos also limits the personalization and automation that are key to modern platforms.

Cultural and organizational inertia : Embedding a startup-like mindset in a traditional banking organization is no easy task. Banks often struggle with internal resistance, lengthy decision cycles, and a culture that prioritizes risk avoidance over rapid experimentation. True platform thinking requires new talent, cross-functional teams, and a shift from product silos to client-centric design.

Regulatory complexity and compliance burden : While regulation is an enabler, it’s also a constraint. Wealth management is tightly regulated, with stringent requirements around suitability, client disclosures, data protection, and cross-border activity. Innovating within these boundaries, especially with digital onboarding and robo-advisory models, requires legal clarity, compliance oversight, and adaptable technology.

Brand perception and client trust : Fintech-style platforms often carry connotations of mass-market, low-cost, or DIY investing. For incumbent banks that have built reputations on trust, discretion, and premium service, repositioning without diluting brand equity can be a delicate balancing act, especially with affluent or HNW clients.

Talent gaps and capability constraints : Building modern wealth platforms demands a blend of skills, product design, UX, data science, agile development, and digital marketing. These are not traditionally found in banking teams, and attracting such talent is increasingly competitive. Partnerships with fintechs or outsourcing can help, but risk losing control over the client experience.

Future outlook

So where is all this heading? The future of banking and investing is both digital and deeply integrated into consumers’ everyday lives.

More Fintech Acquisitions? : Absolutely. We’re likely to see a continued wave of M&A activity as banks try to quickly plug innovation gaps. Buying a fintech is often faster and more effective than building from scratch, especially when speed to market is crucial.

Developing In-House Platforms : On the other hand, some banks are investing in building proprietary platforms. These efforts allow them to retain full control and integrate more deeply with their existing services. However, this route demands time, talent, and vision.

The Rise of Embedded Finance : Imagine opening your favorite ride-hailing app and being offered a micro-investment opportunity while you wait. That’s embedded finance, where banking and investment services become seamless parts of other digital experiences. Banks are starting to explore how their services can be embedded into lifestyle platforms, ecommerce, and even social media. Deutsche Bank, for instance, has begun working on embedded finance APIs for B2B partners. This shift could redefine what it means to “bank” or “invest,” turning these actions into background features of a customer’s digital life.

NORRIQ's role in supporting banks

At NORRIQ Financial Services, we don’t just observe this transformation, we help drive it. We specialize in guiding traditional banks through the challenges of digitization, with tailored services including:

· Legacy system integration - Streamline outdated infrastructure

· Regulatory alignment - Comply with MiFID II, AML/KYC, and ESG rules

· Customer journey optimization - Create seamless, mobile-first investment experiences

The fintech future isn’t a maybe, it’s already here. And we’re here to make sure you’re ready.
I’d say something more formal like “Millennials and Gen Z prefer digital-first platforms that allow them to invest seamlessly and autonomously.”
It was a bit too appealing haha, voilà corrected

You can add some info to strengthen your claim. For instance :
“According to Deloitte, over 70% of millennials prefer mobile-first banking and investing solutions over in-branch services."
”I have added it a bit upwards in the paragraph that answers “Why the sudden spike?”

The transition from the previous chapter is abrupt. You can add a short bridge such as :
"Given this rise in digital investment platforms, traditional banks are not just adapting, they are acquiring and partnering with fintechs to accelerate their own transformation. Let’s explore some real-world examples."

I’d differentiate Bank Strategies More Clearly
It’s a great list of case studies, but blur together. Clarify how they differ strategically:

Build (e.g., ING Invest)
Buy (e.g., ABN AMRO & BUX)
Partner (e.g., Belfius & Bolero)

Explain with a simple example :

‘Think of it like this: a client sets up an ETF portfolio using an AI tool, but when markets turn volatile, they hop on a video call with a human advisor to discuss adjustments. That’s hybrid wealth management in action."

1. Evolving customer expectations

Today’s clients, particularly younger, digital-native generations, demand seamless, mobile-first experiences that mirror what they get from e-commerce or lifestyle apps. They expect 24/7 access, real-time transactions, intuitive interfaces, and personalized recommendations. Traditional banks that fail to meet these expectations risk losing relevance, especially among emerging wealth segments.

2. Margin pressure and cost-to-serve

Low interest rates (until recently), increased capital requirements, and growing compliance costs have eroded margins in traditional banking. Wealth and asset management, especially when digitized, offers higher fee income and better scalability. Automated onboarding, KYC, and investment flows reduce cost-to-serve while opening new revenue channels.

3. Competitive Threat from Fintechs and Big Tech

Fintech startups and neobanks have set a new bar for innovation and speed. At the same time, Big Tech players (like Apple, Google, and Amazon) are entering financial services via wallets, payments, and credit, raising the stakes. Banks must respond not only to new competitors but also to the new customer expectations these players create.

4. Shifting Profit Pools in the Wealth Segment

The democratization of investing has expanded the addressable market. Mass affluent and upper-middle-class clients, once underserved by private banks, are now a profitable segment thanks to scalable digital advice and self-directed investing platforms. Capturing this market requires a fintech-style approach to product design, distribution, and client servicing.

5. Regulatory Evolution Enabling Platform Models

New regulatory frameworks (e.g., PSD2 in Europe) have encouraged open banking, API integration, and client data portability. This enables banks to act as platforms, aggregating external fintech services or embedding wealth management into broader financial ecosystems.

tania driessen