Uppsala universitet

2. Financial Marketing
2.1 The Financial Markets: A Definition and Recent Development
During the last decades competition has intensified in the financial markets, mainly through
deregulation and internationalisation. Together with the increased competition companies have
encountered difficulties in selling their goods or services, and thus also, in keeping their market
share. As a result, a phrase that has been commonly used in recent times and is appropriate for
all business activities is to keep the “customer in focus”. This represents a change in the way
business leaders think about the company’s relationship with the market. It can be said to
represent a change from a product oriented to a market oriented way of thinking. (Jaensson,
1997) The processes of deregulation and technological development have altered the
traditional barriers between different institutional groups, and there has been a redefinition of
the marketplace: we tend to speak of financial services as a whole rather than banking or
insurance specifically. This represents a threat and, at the same time, an opportunity to
financial providers, as it opens up the possibilities of offering customers a more integrated
range of financial services. Many financial institutions have expanded into new, but still closely
related, markets and the number and variety of competitors has increased. The search for
competitive advantage has increasingly tended to focus on the process of service delivery
rather than the service itself, which consequently has turned attention to the concept of
“relationship marketing”. (Ennew, Wright & Thwaites, 1993)
The worldwide flux in the financial markets has affected the conditions for operations
in the Swedish market as well, and insurance firms have experienced a radical change during
the last decade. Currency control was abolished in 1989, the law on insurance brokerage was
introduced and passed in 1990, the borders between banking and insurance were demolished in
1991 and both these lines of business could be pursued within the same corporate group.
According to the EES-treaty of 1992, the possibilities for running a financial business in other
European countries were enlarged, and in 1993 a new law on competition was introduced in
line with the adaptation to EC regulations. Following full membership of the European Union
in 1995, competition from foreign financial institutions intensified.