Strategic Planning and Implementation of Digital Banking Functionalities in UK & European Markets

Over the past decade, I’ve had countless conversations with banking executives across Europe and the UK. The themes are always familiar: legacy systems holding them back, growing pressure from digital challengers, and a customer base that expects more than just a functional app — they expect a seamless, personalized digital experience.

Regulations like PSD2 and Open Banking haven’t just reshaped compliance—they’ve unlocked the playing field for innovation. And with mobile banking now the norm, not the exception, the institutions that adapt quickly are pulling ahead—some growing nearly 50% faster than those still stuck in outdated models.

This article brings together the lessons we’ve learned helping banks and fintechs thrive in this landscape. If you’re leading digital strategy, building new products, or steering your organization through change, I hope these insights help you make smarter, faster, and more confident decisions.

Key Digital Banking Functionalities for Product Teams Entering Financial Services

If you’re leading a product team and exploring how to integrate digital banking into your service offering, the path forward can feel overwhelming. There’s no shortage of features you could build—but the real challenge is knowing which ones will actually move the needle for your users and your business.

At DashDevs, we’ve helped dozens of product-driven companies across the UK and EU enter the banking space. And we’ve learned that success doesn’t come from launching everything at once—it comes from getting the fundamentals right.

Here’s what we recommend prioritizing first—and why each feature directly impacts your ability to deliver value, stay compliant, and scale with confidence.

1. Account Aggregation (Open Banking-Enabled)

When users can see all their accounts in one place—across banks and providers—you instantly create more stickiness and utility within your app. Thanks to PSD2 and Open Banking solutions, this is now achievable through secure APIs.

Aggregation is especially useful if your platform doesn’t hold the user’s primary funds yet. It helps position you as their go-to financial dashboard while giving you richer data to power smarter product decisions.

Aggregation increases user engagement, enables hyper-personalization, and creates meaningful upsell opportunities based on full financial behavior—not just your internal data.

2. Real-Time Payments and Transfers

Speed is now a baseline expectation. Whether it’s peer-to-peer, business payouts, or internal transfers, users expect funds to move instantly—24/7.

In the UK, Faster Payments is already the standard. In the EU, real-time SEPA transfers will soon be mandatory. Integrating these rails keeps you both compliant and competitive.

Real-time payments reduce drop-offs and user frustration, support time-sensitive use cases (like gig economy or marketplace payouts), and align your product with top-tier banking experiences.

3. Digital Onboarding and e-KYC

Your onboarding experience sets the tone for everything that follows. If it’s slow or clunky, users will walk away—regardless of how strong your offering is.

With e-KYC services, you can verify identity quickly and securely using biometrics, document scans, and real-time data checks. This is critical for AML compliance, but also for delivering a frictionless user experience.

Fast, compliant onboarding increases conversion, reduces manual operations, and sets you up for scalable user growth across regions.

4. Personal Finance Management (PFM) & Budgeting Tools

If your users are managing money in any form—spending, saving, or borrowing—PFM tools can dramatically improve their engagement.

These features turn your app into more than just a transaction log. They help users understand their financial patterns, set goals, and make better decisions.

PFM drives loyalty, increases session time, and generates behavioral data that can inform personalized financial products or nudges.

5. Card Management and Digital Controls

Users want control—and they expect it in real time. That means in-app card freezing, PIN viewing, spending limits, and even virtual cards for online use.

These tools aren’t just about user experience—they also reduce fraud risk and support flexible card-based business models.

Digital card controls improve trust and safety while decreasing support costs. They’re a must-have for any card-led product.

6. AI-Powered Customer Support

Support needs to scale as fast as your product does. AI chatbots and virtual assistants help you deliver consistent, always-on service—without expanding your team linearly.

From basic inquiries to transaction issues, AI support can cover a large volume of user needs, while escalating complex cases to your human team when needed.

Smart support reduces operational overhead, speeds up resolution time, and keeps your users happy—especially as you scale across regions or time zones.

7. Advanced Security and Fraud Protection

Users won’t trust you with their money unless they feel protected.

With PSD2’s SCA requirements and rising fraud sophistication, you need layered security: biometrics, fraud detection engines, real-time alerts, and intelligent authentication flows.

Why it matters: Strong security earns user trust, safeguards brand reputation, and helps avoid costly compliance failures.

If you’re building or expanding into financial services, these are the core features we advise every product team to evaluate first. They’re foundational—not just for user satisfaction, but for compliance, monetization, and long-term growth.

Our role at DashDevs is to help you implement these features the right way—from strategy to launch—so you can focus on scaling what makes your business unique.

Regulatory and Compliance Factors in UK & EU to Follow

One of the biggest shifts product teams face when entering digital banking is the regulatory load. Unlike most digital products, financial services are heavily governed—and for good reason. You’re handling sensitive data, managing risk, and operating in a space where trust is everything.

In the UK and EU, compliance isn’t just a legal box to check—it’s a strategic layer that directly shapes how you design, build, and launch new features. Done right, it builds trust, speeds up approvals, and creates long-term resilience. Here’s what your team needs to be ready for:

• PSD2 & open banking: Requires banks to provide secure APIs for data sharing and payment initiation with third-party providers, given user consent. This enables features like account aggregation, PISPs (Payment Initiation), and AISPs (Account Information access). It also creates new business opportunities for fintech partnerships and embedded finance models.
• GDPR (General Data Protection Regulation): Governs how personal data is collected, processed, and stored. Product teams must build in consent flows, data transparency, and user rights (such as deletion and portability). GDPR impacts every data-driven feature—from personalization to analytics—and is key to building trust.
• SCA (Strong Customer Authentication): Mandates two-factor authentication for electronic payments and access to sensitive account information. You’ll need to design secure login and transaction flows that include biometrics, one-time codes, or device-based authentication—without disrupting the user experience.
• AML & KYC regulations: Anti-Money Laundering and Know Your Customer rules apply to onboarding, payments, and transaction monitoring. This means implementing identity checks, document verification, and risk screening. Compliance here is essential to avoid regulatory action and ensure responsible growth.
• Consumer protection & conduct rules: UK and EU regulators enforce requirements around fair treatment, transparency, and accessibility. Apps must provide clear terms, easy complaint mechanisms, fraud alerts, and support for vulnerable users. These expectations shape UI/UX decisions and customer service features.
• Data security & operational resilience: Regulations like the EU’s upcoming DORA require robust IT risk management, data encryption, penetration testing, and continuity planning. High availability, incident response protocols, and secure infrastructure are now baseline expectations for any financial product.
• Local regulatory variations: While PSD2 and GDPR set EU-wide standards, local regulators often introduce additional rules. Post-Brexit, the UK operates its own Open Banking framework and is exploring Open Finance. Meanwhile, the EU is preparing PSD3, which may expand data-sharing rights and compliance needs. Staying flexible to evolving national policies is key to scaling across regions.

Read also about how to start a digital bank or neobank in 2025 in our guide.

Strategic Planning Approaches for Digital Banking Features

Adding digital banking to your product means more than launching new features. It requires clear planning, alignment with your business goals, staying compliant, and focusing on what really matters to your users.

If your team is exploring embedded finance or building full digital banking services, here’s how to approach it with a solid strategy.

1. Start with Customer-Centric Ideation

Everything begins with the user. Product managers need a strong understanding of customer behavior, friction points, and unmet needs. This means going beyond assumptions—use app analytics, heatmaps, direct interviews, and user feedback to uncover what really matters.

If users frequently ask about transaction clarity, maybe it’s time to improve categorization or real-time notifications. If budgeting seems to trip them up, a lightweight PFM feature could offer outsized impact.

Toolset for customer-driven planning:

2. Tie Features to Business Goals

Features shouldn’t exist in isolation—they need to support measurable business outcomes. Whether it’s driving acquisition, improving retention, opening a new revenue stream, or cutting costs, every roadmap item should align with a specific objective.

A successful example: Monzo’s “Pots” helped users manage money more effectively and improved engagement and retention. Their paid accounts, on the other hand, were designed specifically for revenue diversification.

Example feature alignment:

3. Analyze the Market—Don’t Fall Behind

Product leaders need to track both fintech innovators and traditional banks. What features are becoming baseline expectations? What’s delighting users elsewhere? Benchmarking helps you avoid gaps and identify differentiation opportunities.

For example, virtual cards, sustainability features, and embedded insurance are now appearing across leading apps. Your roadmap should reflect awareness of this landscape, even if you choose to delay or skip certain features.

4. Prioritize with Intent and Structure

Resources are limited. The smartest product teams don’t build the biggest roadmaps—they build the clearest ones. Prioritization frameworks help teams focus on what drives the most value, and fastest.

Common prioritization approaches:

5. Think MVP—Then Iterate

Perfection delays progress. It’s better to launch a lean version of a feature, validate with users, then expand. This approach is especially useful in fintech, where live data and behavior often shape better product decisions than static specs.

Example: Start with a chatbot that answers five FAQs. Once users engage, you can grow its capabilities into full AI-assisted support with intent recognition and smart escalation.

6. Build with Agile, Cross-Functional Teams

Digital banking features need close collaboration between product, design, engineering, QA, and compliance. Agile squads working in short sprints allow for quicker feedback loops and adaptability as regulations or user feedback shift.

To be effective, product managers must facilitate communication—not just within the team, but across departments (ops, legal, customer support) so that what gets built also works smoothly in the broader business context.

7. Embed Risk and Compliance into Planning

In digital banking, risk planning isn’t optional. Fraud, data misuse, and regulatory penalties can derail even the best product ideas. That’s why we advise involving risk, compliance, and security experts early—ideally at the ideation stage.

Practical controls to consider:

8. Set Clear KPIs from the Start

You can’t improve what you don’t measure. Define success metrics for every major feature or release—and share them with your team.

Common KPIs in digital banking:

9. Iterate—and Stay Adaptive

Even the most strategic plan needs room to evolve. Fintech is fast-moving, and user expectations shift quickly. The best teams use feedback loops—support tickets, app reviews, usage data—to continuously refine features and reprioritize where needed.

The mindset should be plan → build → measure → learn → adapt.

With the right strategy in place, your team can move beyond feature checklists and start delivering real value—secure, user-focused digital experiences that support your business goals and grow with your customers.

Common Challenges in Digital Feature Implementation (and How to Overcome Them)

Building digital banking features sounds exciting—and it is. But product teams quickly discover it’s not just about great ideas and agile sprints. From legacy systems to compliance bottlenecks, there are some real hurdles that can slow down or even derail your launch plans.

Here are the most common challenges we’ve seen product teams face in the UK and EU—and the proven ways to overcome them.

1. Legacy Infrastructure Slows Down Delivery

Many banks are still running on outdated core systems with tightly coupled back ends that don’t support modern APIs. These “spaghetti architectures” make it hard to roll out new features quickly—or at all. In fact, 75% of banks report struggling with digital implementation due to legacy infrastructure.

How to overcome it: Modernization doesn’t have to be a full core replacement. Many teams start by introducing middleware or API layers that sit between the legacy core and new digital features. Others use microservices or SaaS-based modules to launch isolated features (like budgeting tools or onboarding flows) without touching the old core directly. Factor in additional time for integration testing and push for a modernization roadmap as part of long-term planning.

2. Security Risks and Cyber Threats Are Rising

With greater digital presence comes higher exposure to cyberattacks. Banks are high-value targets, and even a small breach can destroy customer trust.

How to overcome it: Bake security into every layer—from biometric login and fraud alerts to encryption and secure coding practices. Work closely with InfoSec teams and ensure developers are trained in secure development. Use well-tested third-party tools for things like identity verification or 2FA. Regular audits and a clear incident response plan can help you act fast if something goes wrong. And remember: balancing security with UX is key—tools like behavioral authentication can help you achieve both.

3. Regulatory Compliance Creates Friction

Digital banking in the UK and EU comes with a dense web of regulations—PSD2, GDPR, SCA, AML, and more. Compliance often adds complexity to product development, delays releases, and restricts what you can do with user data.

How to overcome it: The earlier you bring in compliance teams, the better. Make them part of the product squad—not just a late-stage reviewer. Some banks embed compliance officers directly into agile teams. Use pre-vetted RegTech services for KYC, SCA, and data consent flows. And always document consent, audit logs, and compliance decisions. This helps if regulators ever come calling—and reduces the risk of rework later.

4. Integration with External APIs Can Be Fragile

Modern digital banking relies on a lot of third-party integrations—open banking APIs, payment gateways, credit bureaus, insurance partners, and more. But these integrations can break, lag behind in standards, or return inconsistent data.

How to overcome it: Invest in good API management tools and test everything in sandbox environments. Use standardized APIs wherever possible (like UK Open Banking specs or Berlin Group protocols in the EU). Have fallback logic and clear error handling—so if an external API goes down, the user experience doesn’t. Choose partners wisely—reliable vendors with strong SLAs and compliance frameworks will save you a lot of pain down the line.

5. Internal Culture and Silos Block Progress

Some of the biggest roadblocks aren’t technical—they’re cultural. Traditional banks often have risk-averse mindsets, slow approvals, or poor collaboration between departments. Product teams can find themselves stuck between IT, compliance, marketing, and leadership—each with different priorities.

How to overcome it: Leadership support is key. Banks that succeed often create dedicated digital units or innovation labs, giving them space to move fast. Upskilling teams in modern product methods (agile, design thinking, cloud) also helps. Embedding cross-functional teams—with business, tech, and compliance working side-by-side—builds trust and speeds up decisions. And don’t underestimate the power of quick wins: showing visible progress builds momentum and brings skeptics on board.

6. Maintaining Trust While Scaling Digital

As more users move to digital channels, expectations around reliability, transparency, and ethical data use increase. Even one glitch—like showing the wrong balance—can create a flood of support calls or media backlash. The more “digital” you become, the more your brand is defined by the app experience.

How to overcome it: Invest in quality assurance, performance testing, and real-time monitoring. If an outage happens, communicate transparently through status pages or in-app alerts. Trust also depends on how you use data—make sure it’s always with user consent and never feels intrusive. And back your product with strong support: make it easy for users to get help when something goes wrong. This builds long-term loyalty—even when the tech occasionally hiccups.

Every product team entering digital banking can face these challenges. But with the right structure, smart planning, and the right partners, these challenges become opportunities to build stronger, smarter, and more resilient products.

Case Studies: UK & European Digital Banking Successes

Successful digital banking today comes down to solving real customer needs, building products that scale, and finding the right balance between innovation and business impact. Let’s take a look at how some of the top players in the UK and Europe are getting it right.

Monzo (UK): Customer-Led Growth at Scale

Monzo built its success by obsessing over user needs: instant spending notifications, simple budgeting tools like “Pots,” and a smooth onboarding process all helped it grow to over 9 million users. It didn’t stop at engagement—Monzo expanded revenue with premium subscriptions and lending products, leading to its first profitable year in 2023/24. Its smart use of Open Banking for marketplace features shows how digital experience and business outcomes can align beautifully.

Starling Bank (UK): Digital Excellence + Diversified Strategy

Starling launched with strong UX fundamentals—instant alerts, card controls, and seamless payments—but stood out through its marketplace of third-party services and in-house core banking system. That core now powers its BaaS offering, “Engine by Starling,” used by other banks. With revenue up 50% and consistent profitability, Starling proves that combining great tech, smart partnerships, and strong compliance can create long-term success.

Revolut (UK/EU): The All-in-One Financial Super App

Revolut began as a travel money tool but quickly evolved into a financial super app—offering banking, investing, crypto, and more. It scaled rapidly across regions with features powered by AI, personalization, and a strong subscription model. In 2023, it posted $2.2B in revenue and $428M in profit, driven by diversification and digital scalability. It also demonstrated how regulatory navigation (from e-money to banking licenses) supports long-term growth.

N26 (Germany/EU): Simplicity, Scale, and Cross-Border Reach

Berlin-based N26 focused on intuitive design, low fees, and simplicity—scaling to 8+ million users across 20 countries under one EU banking license. It cut legacy costs with a fully digital model and generated revenue through premium plans. Despite some setbacks, N26 shows the value of lean infrastructure, local market adaptation, and continuous product updates in building a pan-European digital bank.

BBVA & Barclays: Traditional Banks Embracing Digital

Legacy banks are also making strong digital moves. BBVA built award-winning mobile tools like “Valora” and invested early in Open Banking and fintech M&A. Barclays introduced innovations like in-app card freezing and account aggregation—showing that with the right focus, incumbents can compete with neobanks by modernizing their digital channels and user experience.

Across all these case studies, several success factors stand out:

Bottom line: Whether you’re a fintech startup or a traditional player, success in digital banking comes down to getting the strategy right—clear priorities, customer focus, regulatory readiness, and execution excellence.

Final Take

Digital banking has become a core component of business strategy for financial institutions across the UK and Europe. It directly impacts how banks attract customers, grow revenue, and remain competitive.

Success comes from combining the right digital features with a clear product vision, regulatory alignment, and strong execution. The examples of Monzo, Starling, Revolut, and others prove that scalable, user-focused digital solutions—when supported by the right strategy—can drive both customer loyalty and financial performance.

At DashDevs, we help product teams and financial organizations turn vision into reality—fast, compliant, and scalable. Ready to bring your digital banking strategy to life?

Let’s talk.