OSLO (Reuters) - The Nordic region’s biggest banks may form a joint regional system to facilitate payments, they said on Friday, in the latest sign of cooperation to stave off competition from fintech upstarts and Silicon Valley giants.
Recent regulatory changes in Europe open up parts of the banking market to companies that were not traditionally part of the industry, including the likes of Facebook and Amazon, triggering more competition for incumbents.
Despite close ties between Sweden, Norway, Finland and Denmark, the Nordic countries’ current payment infrastructure is highly fragmented along national borders, the region’s banks said.
Danske Bank, DNB, Handelsbanken, Nordea, OP Financial Group, SEB and Swedbank are jointly exploring the project, they said in a statement.
“A harmonisation of the domestic infrastructures and the products offered would ease cross-border payments and foster further trade between the Nordic countries, stimulating growth and employment,” the banks said.
If successful, the new system would simplify cross-border payments in the Swedish, Danish and Norwegian crown currencies, as well as the euro, which is used by Finland.
In 2017, banks in Norway carried out a large-scale domestic merger of payments infrastructure, including the consolidation of several mobile payment solutions into a single app, which has since been joined by the Norwegian branches of Sweden’s Nordea, Denmark’s Danske Bank and others.
“The initiative shares the objectives of current domestic infrastructure projects in Norway and Sweden, but aims at achieving them on a Nordic scale,” the banks said on Friday.
The deal could also mean more competition for Danish payments firm Nets, which last September was bought by U.S. private equity firm Hellman & Friedman in a $5.3 billion deal.
“Based on open access and common European standards, the infrastructure will contribute to increased competition among payment service providers in the Nordics,” the banks said, adding it should boost innovation and product development.
“This will in turn enable the Nordics to maintain their position as some of the world’s most digital societies,” they said.
Reporting by Terje Solsvik. Editing by Jane Merriman