Swedish banking denial to operators prompts official BOS complaint

By | April 21, 2021

Branscheforenigen för Onlinespel (BOS), Sweden’s online gambling trade association, has demanded that the Swedish Financial Authority (Finansinspektionen) explain why banks have ‘withdrawn their financial services for’ licensed operators.  

BOS complaint states that during 2021, the majority of its members have unexpectedly had to deal with account closures and the termination of agreed payment services provided by national banks.

“As far as BOS is aware the following banks have in some case actively resigned or refused to offer services to the member companies: SEB, Swedbank, Nordea, Handelsbanken, DNB Nor and Danske Bank,” BOS detailed in its statement.

The trade association demands that Finansinspektionen explain why licensed businesses were denied basic banking and payment services needed to conduct their day-to-day business.

“The banks fulfil an important task in any society and for every industry,” said Gustaf Hoffstedt, General Secretary of BOS. “The online gambling industry is not an exception, quite the opposite with our industry’s transaction intensity.”

“With this in mind it concerns me that a large number of banks are withdrawing their services to Swedish licensed gambling operators, and apparently without any individual due diligence process.”

“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 client, says Gustaf Hoffstedt.”

In the official BOS letter to the Swedish Finance Inspection, the company outlined how the industry is dependent on basic financial infrastructure ‘in the form of banking and payment services’ in order to effectively conduct their business.

This includes addressing challenges related to the activities of unlicensed betting operators, as well as protecting customers from fraudulent threats as well as countering attempts at money laundering, an essential practice for preventing the exploitation of Sweden’s gaming industry for criminal purposes or for terrorist financing.

Additionally, BOS noted that the Swish service – operated jointly with the major Swedish banks – is important for member operators to be able to offer requested payment offers for customers.

Regarding the decision by the banks to withdraw their services to Sweden’s licensed gambling operators, Hoffstedt – writing in the letter – said noted that ‘the formal reason for the redundancies seems to be the outcome of the banks’ risk assessment and application of PTL, but in some cases the banks have not stated any reason at all.’

The General Secretary concludes: “The Nordic banks own the Bank-ID identification system and even more importantly the payment provider Swish. It is of great importance for operators in Sweden to be able to offer these systems to the customers.”

“Bank-ID 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 Swedish Finance Inspection for aid on this matter.”

The submission of a formal complaint on banking follows BOS’ expression of concern regarding the influence over regulatory affairs held by Sweden’s state-owned lottery and gambling company Svenska Spel.