Customer concerns arise over switching banks amid Nordean service issues

The recent issues with Nordean’s banking services have prompted some customers to consider switching banks. While the process of changing banks can be relatively straightforward, it becomes more complicated depending on the number of loans and other banking services a customer is utilizing.

We consulted Virva Walo, head of department at the Financial Supervisory Authority, to understand the implications of switching banks in three scenarios.

1. **Customer with only a bank account**: If a customer wants to switch, they can authorize the new bank to move their account from the old bank using a power of attorney. This is typically manageable at most banks. “In practice, the new bank handles the entire account transfer process, including notifying the employer and transferring e-invoices and direct payments,” Walo explains. Customers can also manage the transfer independently by opening an account online and gradually shifting their banking activities, receiving a debit card in the process, although a credit card must be applied for separately.

2. **Customer with a mortgage or other loans**: Mortgages and loans cannot be transferred to a new bank instantaneously. A loan offer needs to be obtained from the new bank, which is then used to pay off the existing loan. “This is essentially about comparing mortgage conditions,” Walo states. Customers should periodically compare bank offers and consider switching, though impulsive decisions are usually not advisable since issues with online banking are often temporary.

3. **Customer with investment accounts or fund shares**: New banks can also handle the transfer of securities accounts or savings accounts, though customers should be aware that there may be fees involved in such transfers. Walo highlights that capital gains information will not transfer to the new bank, so customers should document this information. Additionally, selling fund shares and purchasing new shares from the new bank solely for the sake of switching may not be financially prudent. Caution is advised in such situations.