By Michał Kurowski, director, and Barbara Koźbiał, senior manager, Strategy&

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The European financial services sector is undergoing a profound transformation. Strategy&’s latest report, based on a survey of over 5,500 consumers across 11 countries, reveals how digital payments, FinTech innovations and the regulatory reform are reshaping consumer expectations and competitive landscape. For stakeholders, these insights offer a valuable lens into emerging opportunities and challenges.

Consumers are driving the shift
Cash is quickly becoming obsolete. In Poland, 61% of respondents now treat cash as a last resort – significantly higher than the 46% average across other surveyed countries. While 49% of Polish consumers still prefer debit or credit cards, the share of those using non-bank wallets (such as. Apple Pay, Klarna and PayPal) has grown by nine percentage points since 2020, now matching the popularity of credit cards at 17%.

This trend is mirrored across Europe, where mobile wallets and app-based payments are becoming mainstream. Notably, 39% of Polish respondents identified BLIK – a local mobile payment solution – as their most important payment app, far ahead of Apple Pay (11%) and Google Pay (7%).

FinTechs: from niche to mainstream
FinTechs are gaining ground by offering simple, subscription-based services tailored to customers seeking more accessible and intuitive financial solutions. The number of FinTech ‘unicorns’ globally has grown by 27% since 2019, reaching 185 in 2024. These firms are increasingly the first choice for younger consumers seeking intuitive, digital-first financial experiences.

However, trust remains a hurdle. Only 5% of Polish consumers trust neobanks with their data, compared to 20% across other countries. In contrast, traditional banks enjoy strong consumer confidence, with 56% of respondents willing to share data with them – up 27 percentage points since 2020.

Regulation as a catalyst for innovation
The upcoming PSD3 (Payment Services Directive 3), and FIDA (Financial Data Access Regulation), are part of a new EU package of regulations designed to reshape the financial services and open-finance market by enhancing consumer protection, strengthening security, fostering innovation and creating a more unified and competitive market for payment services across member states These two frameworks will expand the scope of open banking, mandating broader access to financial data and standardised APIs, the application programming interfaces that allow different applications to communicate and exchange data. These changes will enable new use-cases, such as:

  • Real-time insurance offers during checkout
  • Personalised savings and investment recommendations
  • Transparent credit comparisons and pre-approvals
  • Seamless account switching and bill payments

Strategy& highlights that early adopters who capitalise on these regulatory changes are poised to capture the lion’s share of the market.

Strategic priorities for financial institutions
To remain competitive, banks must evolve in four key areas:

  • Value proposition: Simplify products and pricing to meet consumer expectations for transparency and ease.
  • Digital ecosystems: Transform mobile apps into integrated platforms that combine payments, commerce, and financial planning.
  • Partnerships and positioning: Use trust and scale to collaborate with FinTechs or develop proprietary solutions that address emerging needs.
  • Capture the cash displacement: Optimise branch networks and the offering of digital alternatives.

The new financial landscape
The study also reveals that consumers are increasingly open to using non-bank providers for core financial services. In Poland, 31% of respondents cited rewards (such as cashback and/or discounts) as a reason to choose a non-bank provider, while 30% pointed to lower costs and 26% to better digital experiences.

This shift is not just about convenience – it reflects a broader redefinition of what consumers expect from financial institutions. As embedded finance, superapps, and instant payments become the norm, traditional players are faced with adaption or being left on the side-lines.

Europe’s financial future is digital, decentralised, and data-driven. As consumers embrace new payment methods and regulators push for greater transparency and interoperability, the lines between banks, FinTechs, and tech giants will continue to blur. The challenge and opportunity lies in harnessing these trends to build a more inclusive, innovative, and resilient financial ecosystem.