Swedish trade association challenges Nordic banks over service withdrawal

Swedish trade association BOS has complained to the Swedish Financial Authority (SFA) over the decision by major Nordic banks to withdraw their corporate account services from gambling operators.

In a letter to the SFA, BOS claimed the banks had violated their contractual obligation to provide banking services to operators, as defined under SFA guidelines.

BOS singled out Swedbank, Nordea, Handelsbanken, DNB Nor and Danske Bank for “resigning from or refusing” to service Swedish-licensed operators without conducting individual due diligence on each firm.

“The member companies have, in inquiries with other banks, experienced that the banks do not offer to enter into new agreements.

“The reluctance to offer banking services to licensed online gambling companies thus seems to be general in the Swedish banking sector,” BOS wrote.

BOS further argues that banks are impinging on an operator’s ability to verify its customers by denying them access to banking services, as well as tools like Swish and BankID.

The only instance in which banking services can be legitimately withdrawn is in cases of financial misconduct or dishonesty by the account holder, according to BOS.

Additionally, the trade body suggests that channelisation to licensed operators will be reduced due to the withdrawal of banking services and players will be pushed away from the regulated market as a result.

The BankID online verification system and the Swish payment method were developed by and are jointly owned by the major Swedish banks.

They are only made available to companies that are customers of the affiliated banks.

In its letter, BOS requested a supervisory review of all bank conduct in relation to the decision to deny services and for the SFA to bar enforcement of operator account closures.

“The decision seems to have been taken based only on the industry’s general reputation, rather than any AML concern or similar from the bank regarding the individual clients,” BOS CEO Gustaf Hoffstedt said.

“BankID and Swish are important competitive advantages for Swedish-licensed operators in their daily combat against unlicensed operators.

“We need the banks to be on the right side of that combat, and that is the reason we today ask the SFA for aid on this matter,” Hoffstedt added.

The complaint mirrors that of William Hill’s, which filed its own grievance with the authorities over the decision by Skandinaviska Enskilda Banken AB (SEB) to withdraw banking services in March.

SEB justified the measure by referring to general misgivings within the gambling sector and its alleged susceptibility to money laundering activities.

In a statement provided to EGR at the time of the complaint, William Hill said: “The measures proposed by Swedish banks are not only illegal, but they are also detrimental for the integrity and functioning of an important licensing system backed by a vast majority of the Swedish parliament.”

That complaint is still being considered by the SFA.