Competition believes won't gain from Swedbank price hike
Swedbank announced that it will raise the prices of several services offered at its bank branches. Competitors acknowledge that they will not gain market share from this move, as customers rarely switch banks due to the cost of basic services.
Starting in November, Swedbank will raise the prices of several services offered at its bank branches. For instance, under the new pricing, depositing coins at the bank will cost a minimum of €10, up from the previous price of €5. However, an exception is made for children, who can deposit up to €100 worth of coins free of charge. For those over 65, the cost of a PIN calculator will increase from €10 to €15. Additionally, the cost of renewing Smart-ID at a bank branch will rise from €10 to €15.
"As we see a decline in the overall usage of these services, we are setting our prices accordingly," said Tarmo Ulla, head of retail banking at Swedbank.
At the same time, banks have seen their profits surge due to high interest rates. "Aktuaalne kaamera" news inquired why the bank is raising service prices for customers who may not be adept at using online banking in such a profitable environment.
"My response would be that we certainly help and advise all our customers who visit our branches, so they can learn to use and become accustomed to our digital channels, which are more convenient and affordable for them," Ulla replied.
While some of the services mentioned are offered more cheaply by other banks, competitors do not expect to gain customers from this change.
"We don't currently see that the price increases for these services will cause significant movement in the market," said Evelin Koplimäe, head of the private client segment at SEB.
Customers are more likely to switch banks when making bigger decisions, such as obtaining a more favorable mortgage.
"I have to admit that customers tend to be quite comfortable. Changing banks is not easy at all. It's perceived as very complicated," said Moonika Maaring, head of retail banking at Coop Pank.
Maaring also acknowledged that more and more customers are using online banking, but added that the notion that only elderly people who are unfamiliar with the internet visit bank branches is a myth.
"A good example is exchanging coins – if a child's piggy bank needs to be deposited into an account, those coins need to be exchanged, and there aren't many banks left where this can be done. For instance, in Lääne-Viru County, we are one of the few," said Maaring.
--
Follow ERR News on Facebook and Twitter and never miss an update!
Editor: Merili Nael, Marcus Turovski
