Market development

There was slightly positive development in the global economy in 2013 and the Swedish economy was stable. Low interest rates resulted in higher indebtedness among Swedish households, mainly linked to an increased demand for mortgages. At the same time, lower interest rates keep interest expense down, which gives households capital to spare for consumption or to save.

The Swedish banking market is still dominated by a few large players. On the deposits side, the four main Swedish banks – Nordea, Swedbank, Handelsbanken and SEB – have a market share of around 65%. In a ten-year perspective both niche banks and foreign bank branches have increased their market share, mainly in the private banking segment. Many niche banks have in common that they originated from other sectors and that they are built on an online mentality with few or no physical branches of their own.

Although in the Swedish banking market in general many consumers are reluctant to switch banks, the emergence of niche banks combined with technical advances has increased mobility and flexibility. Solutions such as digital bank IDs have made it easier for customers to switch banks and to use different banks for different purposes. These days being able to access the bank digitally around the clock, year round, everywhere in the world is something people take for granted.