Market Access Strategies in the EU Banking Sector - Obstacles and Benefits towards an integrated European Retail Market

The integration process in the European banking sector considerably differs with regard to product types. Deep integration can be observed in the money market as well as the market for wholesale products. In contrast to that, a strong segmentation of national markets still exists in the field of retail products. In this context, the paper analyses market access strategies of European banks. The analysis is based both on aggregate sectoral data and on four company case studies (BSCH, Nordea Group, BNP Paribas and HSBC). It is explored to which extent different market access strategies contribute to the integration of the European retail markets. A clear result is that mergers and acquisition as well as cooperations and strategic alliances form the most important market access strategies. Direct cross-border sales and the establishment of branches and subsidiaries are of minor importance. All strategies are complicated by considerable natural and politically induced barriers to market access. In particular, such politically induced barriers are different national supervision of banks, different tax legislation, as well as national accounting and take-over principles. Here, further harmonizations are suited to accelerate the integration of European retail markets and thus to increase consumer benefits by lower prices and a higher product variety for financial services.