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With a few notable exceptions, financial services brands lag behind other consumer products in their international reach. There are barriers to entry such as regulation and substantial country-by-country differences in usage, purchase channels and consumer attitudes.
Scandinavians have the highest ownership of financial products, whether it is current accounts, insurance, loans, credit cards, mortgages or investments. This contrasts with former communist countries where ownership of financial products is low although strong growth in credit cards and current accounts reveals an appetite to catch up fast.
Can financial services expand beyond state boundaries? Yes, but there will be obstacles. Customer inertia presents a challenge. People do not diligently seek out the best deal, they are slow to switch supplier, and preference for face-to-face transactions benefits existing retail providers.
Buying financial services online is underdeveloped even in the most financially sophisticated countries. In most, including France, Spain and Italy it has barely any traction at all. In contrast, use of the internet to bank and to buy consumer goods is high across much of Europe, and confidence is growing.
The economic situation in the near-term may augur badly for the expansion of financial services across European borders. But eventually that will change and when it does the internet may prove an effective route to market on a scale that will change the buying model and substantially reduce distribution costs.