Internationalization of banks : The consumer perspective

Sammanfattning: Increased deregulation, cross-border activities of non-financial companies and improved information communications technology led to an increased consolidation of financial institutions across borders. Commercial banking sector in particular, have witnessed trenmendous amount of cross-border bank merger and acquisitions’ (M&As) deals through out the recent years. The reasons behind cross-border bank M&As are examined from different theoritical perspectives, such as a mode of entry into a foreign market, as a value-creating strategy and/or way of maximizing shareholder value either by achieving efficiency gains or by increasing the market power. It is not entirely clear however if any of these motives take into account the consumer perspective on the subject matter; in fact it seems that consumer perspectives or attitudes towards the increasingly globalized banking sector has been left out of discussion. Furthermore, while globalization has accelerated cross-border merger activities around the world, another global force recently has been creating a counterweight to cross-border deals. Concerns over nationalism, feelings of national security and protectionism have delayed several cross-border banking deals. The purpose of this study is therefore to explore the Swedish consumer attitudes on the issue of internationalization of banks. Through literature studies we have identified relevant threories of consumer perspectives on the general concept of globalization; the consumer nationalism and consumer worldmindedness. Based on the previously developed scale of these two opposing concepts, the study measures the consumer attitudes towards the subject matter by examining to what extent they accept the highly globalized world and more importantly, greatly internationalized banking sector. The study took a quantitive approach where the survey was handed out to the general public in Jönköping in order to apply our researched theories and to see for an association between their general attitude on globalization and their specific attitude towards internationalization of banking sector. The result showed the average consumer has a nationalistic attitude towards internationalization of banks. Thus we can argue that although the future seems to bring us an increasingly globalized financial market, the nationalistic or protectionist attitude may always exist at some level within the individual consumer. It is hard to predict how broad or influential the impact of this ‘attitude’ would be, yet it is certain that this will be a never-ending counterforce to the globalized banking sector we are looking at in the future. Foreign banks who are merging with or acquiring Swedish banks therefore should focus not only on the gains that they will achieve from entering Sweden, but also how these gains can be transferred as a benefits to consumers or government of the country to manage challenges related to consumer nationalism.