In Sweden and Europe the banking and financial services sector is perhaps facing its most turbulent time ever. New customer behaviour and future legislation is opening up for new business opportunities and if the Swedish authorities can take advantage, there is a lot to gain.
Bank customers keeping changing their behaviour. Whereas you previously chose a bank and kept the same relationship for mortgages, mutual funds and pensions, people today seek a bank that offers the best conditions. The latest Swedish Quality Bank Index survey showed half of all private customers today have more than one banking relationship which probably stems from a widespread discontent among customers with their primary bank.
In addition, customers’ data will soon be available to hundreds of new service developers when the EU directive PSD2 is implemented in 2018. For many entrepreneurs this reflects a great opportunity. This is especially true for Sweden as in international comparisons, Stockholm is ranked as one of the best countries and cities of the so-called ‘Fintech’. But we should do more – especially when it comes to the widespread dissatisfaction of large bank customers and stimulating a new Swedish growth sector.
The UK has a larger volume of Fintech investments than all European countries together, and its capital is rated second after Silicon Valley as a world leading centre for the digitisation of financial services, so Sweden should look to the country for lessons to be learned.
In the UK, the Financial Conduct Authority (FCA) – the equivalent to Swedish FSA – has taken a more active role than its Swedish counterpart to promote effective competition in the financial market with the objective of accelerating the availability of new and more consumer-oriented services.
The FCA has created an innovation hub where Fintech companies are allowed to verify their business ideas with legal help and get advice on any necessary permits. In addition, the FCA provides support in the form of a dedicated contact person for up to a year after the Fintech has received its license. Countries such as Singapore and Australia have already followed Britain's example. Likewise, our neighbour Finland invests in innovation to this growth sector.
The time is ripe for Sweden and the FSA to adopt the British model. The Government can expand the authority's existing mandate support consumer interests, the establishment of Fintech companies' and the development of this new sector.
Magnus Krusberg is a financial services expert at PA Consulting Group and Michal Gromek is a Ph.D. researcher in crowdfunding and Fintech at the Stockholm School of Economics