Consumer Credit in Sweden

PROSPECTS

PSD2 might benefit non-card lending

The PSD2 Directive sets the legal foundation for the further development of a better integrated internal market for electronic payments within the EU. It seeks to open up payment markets to new entrants, leading to more competition, greater choice and better prices for consumers.

Digitalisation brings speed and convenience to lending

The digitalisation of lending continued to develop apace in Sweden in 2019. A growing number of bank branches are being transformed into consultation venues as it becomes increasingly easier to take out a loan online instead of face to face.

Non-performing loans not a major issue in Sweden due to healthy national and personal finances

While mortgages/housing contributes to the lion’s share of an average Swede’s indebtedness, a minor share is due to other types of loans. The average Swede is constantly becoming more indebted, although it remains debatable how great a risk this is on the national level.

COMPETITIVE LANDSCAPE

Four big banks lead

The big four banks in Sweden, Handelsbanken, Nordea Bank, SEB and Swedbank, are trusted and long-term household brand names. Despite being regarded as the dinosaurs of consumer lending and scapegoats for all that some consumers think is wrong in banking, they remain key players within the Swedish consumer credit landscape.

Nordea Finance launches financing for green cars

Climate change is an important topic in Sweden, with most consumers having a strong interest in playing a role in helping to mitigate the associated issues. Transport is a key aspect in this and green cars are becoming of increasing importance here, with Volvo, for example, investing heavily in electric and hybrid vehicles.

Marginal players increase their share

While the main players maintain a stable position, they also suffer from legacy issues such as their workforce, which, despite cuts, remains higher than the leadership of a typical mainstream bank would like it to be. Legacy issues have thus created a landscape for more fast-moving players with a greater focus on consumer credit or credit cards than the giants have had.

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