Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:


Norwegian Banks in the Age of Globalisation

Norwegian banks are not much at risk by globalisation, asserts professor Carl Arthur Solberg at BI Norwegian School of Management. He outlines three future scenarios for the banking industry in 2018.

There is no doubt that Norwegian banks will be affected by the increased globalisation, as the present financial turbulence amply demonstrates.

There are nevertheless strong factors that will counteract and balance out the most dramatic effects of globalisation.

“These factors are first and foremost to be found in the general public’s loyalty to their local banks; often a result of tradition, local patriotism and the banks’ local knowledge. There is also the matter of legislation, in particular the Savings Banks act, which will serve as a counterbalance to globalisation,” Carl Arthur Solberg points out. He is professor of international marketing and management at BI Norwegian School of Management.

Together with Ole Helge Lien, MBA, he has conducted a study into the globalisation of the banking industry. They have paid particular attention to the effects the increased globalisation might have on Norwegian banks. The findings of this study have been published in a new research report by the BI Norwegian School of Management.

Three scenarios

The BI researchers have outlined three different scenarios for Norwegian banks in the next ten years – up to 2018: a baseline scenario, a technological breakthrough and the global banking industry.

The impact of the globalisation will be more or less dramatic for Norwegian banks, depending on which scenario proves right.

In the case of the baseline scenario, Norwegian Banks do not face much risk from globalisation, according to Solberg and Lien.

“This is not to say that it’s necessarily business as usual for the banks,” underlines Mr. Solberg.

Several development trends combine to impact on the external conditions for Norwegian banks. More terms and conditions for the development of Norwegian banking will be decided by the EU.

Amendments to the EU regulations as well as technical innovations will play an important part in shaping developments in the future. EU legislation on the role of the supervisory authorities and changes to tax rules will also have an effect on the banking industry and make it easier for banks to compete in other countries.

Technological breakthroughs will change the ground rules

Economies of scale in the field of IT or back office do not seem to have changed the banking business much to date.

“New technologies and new uses of technology might change this picture, however,” explains Mr. Solberg, introducing a new potential scenario for Norwegian banks: the technological breakthrough.

New technologies may enable more new players to take on new roles in the financial markets. This might consist of new mobile and internet banks, or of entirely new constellations, such as a cooperation between banks, data transmission companies (e.g. Telenor) and service suppliers (application companies, such as Norwegian Luup).

DnBNOR facing globalisation pressure

Should the scenario with global banking business prove right, this might have a significant impact on Norway, especially in the savings bank sector, Solberg predicts. This will likely lead to mergers between the savings banks, and probably also acquisitions by foreign banks looking to get a foothold in Norway/Scandinavia.

This development will depend largely on internal political processes in the EU, where considerations on the savings banks’ status is a central issue.

In this scenario, even the largest bank in Norway, DnBNOR, will feel the pressure from the outside, according to the researchers.

“The overriding problem for this bank is that it has been slow to move towards internationalisation, and is thus left without any clear-cut alternatives in a more globalised banking world,” the report states.

The report was completed prior to the recent dramatic developments in the financial markets, and has therefore not accounted for these in its assessments.

“The banking industry is likely to see further consolidations in the near future, and this will pose new challenges to Norwegian banks. It is also probable that the globalisation trends will be put on the back burner for some time, so that a new banking structure gets time to settle in the wake of the crises,” says Mr. Solberg.

The report discussed the potential future strategy for five Norwegian banks: Sparebanken Lillestrøm, SR Bank, DnBNOR, Storebrand Bank and Nordea.

Solberg, Carl Arthur and Lien, Ole Helge: Globalisation of the banking industry: Its impact on Norwegian banks and the Norwegian banking industry, Research report, BI Norwegian School of Management (in Norwegian).

Audun Farbrot | alfa
Further information:

Further reports about: DnBNOR Globalisation Norwegian banks banking industry future scenarios

More articles from Business and Finance:

nachricht RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

nachricht The RWI/ISL-Container Throughput Index started off well in 2018
22.02.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Researchers Discover New Anti-Cancer Protein

An international team of researchers has discovered a new anti-cancer protein. The protein, called LHPP, prevents the uncontrolled proliferation of cancer cells in the liver. The researchers led by Prof. Michael N. Hall from the Biozentrum, University of Basel, report in “Nature” that LHPP can also serve as a biomarker for the diagnosis and prognosis of liver cancer.

The incidence of liver cancer, also known as hepatocellular carcinoma, is steadily increasing. In the last twenty years, the number of cases has almost doubled...

Im Focus: Researchers at Fraunhofer monitor re-entry of Chinese space station Tiangong-1

In just a few weeks from now, the Chinese space station Tiangong-1 will re-enter the Earth's atmosphere where it will to a large extent burn up. It is possible that some debris will reach the Earth's surface. Tiangong-1 is orbiting the Earth uncontrolled at a speed of approx. 29,000 km/h.Currently the prognosis relating to the time of impact currently lies within a window of several days. The scientists at Fraunhofer FHR have already been monitoring Tiangong-1 for a number of weeks with their TIRA system, one of the most powerful space observation radars in the world, with a view to supporting the German Space Situational Awareness Center and the ESA with their re-entry forecasts.

Following the loss of radio contact with Tiangong-1 in 2016 and due to the low orbital height, it is now inevitable that the Chinese space station will...

Im Focus: Alliance „OLED Licht Forum“ – Key partner for OLED lighting solutions

Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP, provider of research and development services for OLED lighting solutions, announces the founding of the “OLED Licht Forum” and presents latest OLED design and lighting solutions during light+building, from March 18th – 23rd, 2018 in Frankfurt a.M./Germany, at booth no. F91 in Hall 4.0.

They are united in their passion for OLED (organic light emitting diodes) lighting with all of its unique facets and application possibilities. Thus experts in...

Im Focus: Mars' oceans formed early, possibly aided by massive volcanic eruptions

Oceans formed before Tharsis and evolved together, shaping climate history of Mars

A new scenario seeking to explain how Mars' putative oceans came and went over the last 4 billion years implies that the oceans formed several hundred million...

Im Focus: Tiny implants for cells are functional in vivo

For the first time, an interdisciplinary team from the University of Basel has succeeded in integrating artificial organelles into the cells of live zebrafish embryos. This innovative approach using artificial organelles as cellular implants offers new potential in treating a range of diseases, as the authors report in an article published in Nature Communications.

In the cells of higher organisms, organelles such as the nucleus or mitochondria perform a range of complex functions necessary for life. In the networks of...

All Focus news of the innovation-report >>>



Industry & Economy
Event News

Virtual reality conference comes to Reutlingen

19.03.2018 | Event News

Ultrafast Wireless and Chip Design at the DATE Conference in Dresden

16.03.2018 | Event News

International Tinnitus Conference of the Tinnitus Research Initiative in Regensburg

13.03.2018 | Event News

Latest News

Modular safety concept increases flexibility in plant conversion

22.03.2018 | Trade Fair News

New interactive map shows climate change everywhere in world

22.03.2018 | Earth Sciences

New technologies and computing power to help strengthen population data

22.03.2018 | Earth Sciences

Science & Research
Overview of more VideoLinks >>>