ABN AMRO SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. E-commerce and digital banking solutions: The trend of digital banking and rise of e-commerce presents an opportunity to ABN AMRO. The digital platform for foreign exchange trade and international payments, Franx, lunched in January 2018 is a step in the right direction. The rising trend in Europe is supported by 84% of Europeans utilizing digital banking regularly and 63% using mobile banking apps from traditional banks according to a press release by MasterCard. Moreover, an increasing number of Europeans say they will evaluate the option of transitioning to a digital bank at some point (from 49% in 2017 to 54% in 2019). Lastly, In September 2019, EU’s Open Banking initiative came into effect which further provides an opportunity for the organization.

2. Consumer trends regarding environmentally consciousness: Consumers within the markets served by ABN AMRO are becoming more concerned regarding the environmental actions of the businesses with which they associate. This is a phenomenon that is a growing trend. ABN AMRO can take advantage by offering products that are reflective of the customer's values.

3. Sustained growth in Dutch and European economy: The Dutch economy grew 0.4 percent in Q4 of 2019, this was at the same pace as in the previous period and above the projected rate of 0.3 percent. Private consumption advanced 0.7 percent and fixed investment rebounded 1.2 percent, while government spending increased at a softer 0.3 percent. In addition, net external demand contributed positively, with exports rising slightly faster than imports, while inventory changes subtracted 0.2 percentage points to the growth. Furthermore, the Winter 2020 Economic Forecast published by the European Commission projects that the European economy is set to experience steady, moderate growth. The euro area has now enjoyed its longest period of sustained growth since the euro was introduced in 1999. The forecast projects that Euro area gross domestic product (GDP) growth will remain stable at 1.2% in 2020 and 2021.

Threat

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Political

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Economic

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Social

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Technological

1. Cyber security and data privacy issues: The recent implementation of the GDPR and resulting compliance costs are a part of the data privacy issues. Whereas, the cyber security issues stem from events such as the targeted DDoS attack on Franx, a digital forex trade and international payments service launched by ABN AMRO in early 2018 constitutes a part of the cyber security issues faced by the company.

2. Introduction of new technologies (blockchain & 5G) in the banking sector: The advent of new technologies namely blockchain and 5G in the banking industry must also be countered by the firm. Specifically, the issue lies in the implementation of these tools to provide better financial products and services while retaining the trust of the customers. The bank has taken initiatives in this space by investing and partnering with fintech firms such as SolarisBank, a German fintech startup. In order to develop a grassroots presence in this area, the bank also partnered with Opportunity Network, an online platform for entrepreneurs. The bank also was one of the 15 backers of komgo, a digital commodity trade network backed by blockchain technology that was launched in September 2018. The above data was obtained from the 2019 Integrated Report published by the bank.

Legal

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Environmental

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