Driving forces

Stability of our financial system

A stable financial system is important for all the bank’s stakeholders, and also to the sustainability of the business model of banks, including ABN AMRO. 

An extensive range of legislation and regulation is imposed by regulators and supervisors to banks to safeguard the stability and strength of the financial system. ABN AMRO pays charges that are imposed to support the stability of the financial system: the Dutch Deposit Guarantee System, the European Single Resolution Fund and Dutch bank tax. These charges impact cost levels, in addition to the costs involved made to implement these laws and regulations.

Regulators aim to strike a balance between protecting the stability of the financial market while also embracing and encouraging innovations in the financial services industry. Innovative financial products are diverse, and complex and often result from collaborations between multiple service providers, such as banks and FinTechs. Since the financial crisis, regulators are also increasingly focusing on customer protection and product suitability.


Networks are connecting people more and more. This is causing the balance of power to shift: individuals can now reach millions through only a handful of platforms, such as Facebook, Google, Twitter, Apple and YouTube. The shift towards a network economy has changed society and is disrupting the entire value chain, spurring established companies to rethink customer engagement, customer convenience and transparency.

Consumers expect innovative solutions from financial institutions. Major tech firms can serve as an example for banks to learn how to successfully access data and generate revenue from consumer platforms. Those tech firms also understand what it takes to offer clients digital convenience. With large volumes of client data at their fingertips, financial institutions are strongly positioned for digitalisation. What they need to do is move that data to new systems without losing their clients’ trust in the process.

Technical innovation is becoming faster and faster. The need to quickly market new services to clients requires more and more use of open innovation: the bundling of internal banking expertise and external technological knowhow. This creates opportunities for institutions with the technical capability and the cultural willingness to cooperate. Banks need to redefine their core activities to support this change.


We live in a world of online shopping, same-day delivery and streaming entertainment. Consumers are increasingly using their mobile devices to buy and use products and services. Smartphone users have become accustomed to convenience, speed, simplicity and a personal touch, and they expect the same standard of online service – or better – from their banks. For their finances, they demand transparency and security. 

Banks are digitalising their products as part of their customer service. The basic premise is no longer to improve existing products and services, but to increase value for clients. A successful digital strategy demands a high level of teamwork: not only the traditional cross-departmental interaction, but also partnerships between separate companies and even supply chains, in so-called digital ecosystems.

Given how important their clients’ trust is, banks have become experienced in designing systems with the capability to establish a person’s or organisation’s digital identity. This presents an opportunity to tap into new markets. Blockchain technologies can play a major role in designing new identity systems, which in turn are key enablers of blockchain-based applications in a variety of industries.


It is becoming more and more common for businesses and consumers to interact directly, at the expense of intermediaries. This process of disintermediation is a challenge for banks. New competitors on the internet are offering loans, currency exchanges, investment opportunities and financial advice – directly to end clients. This trend received a boost during the financial crisis, as trust in traditional banks fell.

Disintermediation is not limited to the consumer market: it is also happening in the corporate sector, as companies – both large and small – are increasingly looking for alternatives to traditional bank loans for their financing, such as bonds, leasing and factoring. Soon, new technologies such as Blockchain will make it possible to eliminate the role of banks as ‘the trusted partner’ from clearing and commodity trading.

Under the new EU Payment Services Directive (or ‘PSD II’), from 2018 forward banks will be obliged to give third parties access to their clients’ payment accounts, subject to clients’ consent. Banks can then become an equivalent of Android or iOS; a payment and information provider, but in an open market and competing with third party developers. 

Responsible business conduct

We live in a connected society in which people are increasingly committed to ethical values and responsibility. In response, regulators and governments have introduced a wide range of binding and non-binding rules for issues such as environmental protection, human rights, anti-corruption, tax ethics, remuneration and human resources.

This also extends to financial institutions. As intermediaries brokering the supply and demand of money, banks are in a unique position to play a role in the transition towards a better society. For example, limiting global warming to 2˚ Celsius will require considerable investments. Through their loans and investments, banks can both encourage sustainable activities and discourage activities that are harmful to the environment or to people.

While moving towards a sustainable business model also makes good business sense, it is not without its risks. People are critical of the new social role that banks are taking on, and their conduct needs to be impeccable and explained in verifiable reports. Banks must also ensure that their clients are doing the right thing. This is also in the banks’ own best interests: if a bank lends a client money to buy an inefficient home that devours energy, it runs the risk of seeing the value of its collateral drop.