/ Money

Do you want to buy financial products from other countries?

Map of Europe

The European Commission is proposing a European market for financial services, allowing you to access financial products in other countries across Europe. The question is, do you think this is a good idea?

When I first moved to the UK from Brussels, opening up a bank account turned out to be trickier than finding a house. Few banks were willing to let me open a current account without proof of a permanent address in the UK.

I eventually did open an account and after a few weeks and a permanent address, I decided to switch to First Direct. That proved even trickier. As I didn’t have any credit history in the UK I had to have a certified copy of my passport. Luckily, a lawyer friend was able to help me out, but otherwise, I would’ve been unlikely to pay for the service and would have gone to another bank.

Access to financial products abroad

In general, access to various retail financial services in Europe are dependent on your country of residence. If you see better bank accounts, pension products or cheaper insurances in another country, odds are you won’t be able to purchase it. However, the European Commission wants to change this.

The European Commission’s financial services directorate-general, led by the UK Commissioner Lord Hill, has announced plans to create a single market in retail financial services. It not only wants you to be able to buy financial products offered in other countries, but also for you to be able to take your financial products with you when you move abroad.

Now, most of us don’t plan on moving to another country, but it should mean we can take advantage of innovations and offers available elsewhere. We would be able to access higher interest rates for savings or cheaper credit. For example, the average annual car loan rate in Belgium is 2.2%, whereas it’s 8.6% in the UK and 12.9% in Greece.* Of course, we’d have to worry about exchange rates here in the UK, unlike those in the Eurozone. Nevertheless, cross-border financial services could still open up new options in a sector that often lacks innovation and competition.

But what do you think about this? Would you consider buying a financial service from another country? If so, what would be important for you when looking to do so? What financial product or service would most attract you?

*€10,000, maturity 4 years, 20 year old debtor (FSUG, 2015. Indicative data only.)


I would welcome the chance to take financial products from abroad. However I can see big big practical difficulties which lead me to believe it is a pipe-dream. Of course it could be made to work if the EU were to really pressure the issue and get some standardised terms but commercially it sounds unviable and interest/benefit for a minority.

Since we can’t even send a Christmas card to the continent without paying an exorbitant price I shall believe this when I see it.

This is a press release on this matter from BEUC:

European Commission looking to improve cross-border retail financial services
PRESS STATEMENT – 10.12.2015

The release today of a ‘Green Paper on retail financial services’ by the European Commission signals a push to create a single market for banking products, payment services and insurances. The financial sector is one of the few areas where consumers cannot shop around in other EU countries for a better deal or wider choice.

Monique Goyens, Director General of The European Consumer Organisation (BEUC), commented:

“The financial sector has learned very little from the financial crisis. Few consumers trust their banks or financial advisors. The products consumers really need are scarce. The EU should bear this in mind when trying to tackle cross-border barriers.

“A recent study shows substantial price differences across different EU countries for simple products such as bank accounts or savings products. Reducing artificial market barriers like inconsistent enforcement of EU legislation or barring consumers from interesting cross-border deals could make life easier for consumers to profit from better offers in another EU Member State.

“A digital revolution is shaking the financial sector to its core. This will bring new opportunities for consumers as well as risks. Consumers who manage their finances online do so without national borders getting in the way. The EU must have a close look at this development and adapt the legal system if necessary.”

It seems logical to be able to access financial products throughout the EU, but how other countries would assess, say, mortgage eligibility in the UK without specialist knowledge of our market conditions I am not so sure, not insurance, and how banking would work for the UK when we are not in the Euro I find unclear. I’m sure someone can help.

What disturbs me a bit is the statement “Few consumers trust their banks or financial advisors.” Few? That implies a very small number. I worry such statements may be unsupported yet carry authority. I am quite happy with my bank (from a recent convo so seem quite a few others) and I trust my financial adviser on their record to date. But maybe I am an exception – or maybe those who are content simply don’t stand up and say?

Frank S says:
29 February 2016

What is really difficult is to work for a couple of years in another EU country and broaden your experience (this is partly what a common market is all about, isn’t it?). It is almost impossible to manage a mortgage in your original country A when your income is earned in country B (banks in country A do not like it that your income is from abroad, banks in country B do not like it that the property in question is abroad). Yes, there are solutions, but these are very expensive and do not take the true risks of the individual’s position into account. I am fully aware of currency volatility and differences in employment protection across different EU states, but banks are just not interested in your assets, your income and characteristic of the property in question. Their standard reply is “no”