The financial institutions play a central role in Danish society as the sector that ensures effective payment flows and investment broking.

In spite of the difference in size between the banks, there is a long-standing tradition of partnering and deploying available technologies, notably for credit transfers. The transparent, joint infrastructure created by the institutions is a distinctive feature of the Danish financial sector. Cross-sectoral agreements and joint enterprises ensure convenient and effective payment solutions for both the banks and their customers. The Dankort payment card and BetalingsService, the direct debit facility, being just a couple of examples.

During the 1990s the Danish banking sector underwent increased concentration, as a result of which there are now fewer banks, branches and employees than there were a decade ago. There are few large nationwide and many small local banks, which at local level ensures intense competition for clientele. Many foreign banks are represented in Denmark, and their market share is estimated to be in the region of 10 per cent.

Intensive use of IT ensures that customer service is maintained and extended so that far more tasks are performed than previously. Not least because the customers avail themselves more intensively of the services offered by the banks, and often perform their own transactions online.

Comprehensive legislation, a vigilant Financial Supervisory Authority (Finanstilsynet) and the sector’s self-regulation in association with authorities and other bodies ensure that customer confidence in the solidity of the Danish banking sector is retained.