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.)