Bank’s Money Transfer Service in Sweden : Qualitative study of Swedbank, Nordea and Handelsbanken

Abstract: The flows of money from Diasporas or immigrants to their countries of origin (i.e. remit-tance) have become a more and more important source of income for their families and relatives in their home countries. ‘Remittances are the largest source of external financing in many poor countries.’ (Ratha, Mohapatra, Vijayalakshmi & Xu, 2007). As the remittance flows increase year by year, the researchers pay more and more attention to the ways they send money back home. There has been substantial academic interest of conducting different researches on the money transfer service. One of those research topics is shifting remittance transfer method from informal to formal money transfer channels to enhance the security when sending money internationally. This can help combat financial crime, money laundry and terrorism funding. This academic interest together with the increasing number of immigrants and the good structure and facilities of banks in Sweden intrigue us to conduct research on finding out how banks in Sweden can improve the international money transfer service to enhance customer’s value. In order to do that we analyzed why Diasporas choose to use informal money transfer channels and looked into the current situation of money transfer service offered by banks in Sweden. This research was conducted in three banks in Sweden: Handelsbanken, Nordea and Swedbank in Jönköping. Different previous researches on the reasons why diasporas choose to use informal money transfer channels and theories of service management, customer relationship management and Porter’s generic strategies were blended together to formulate the frame of reference of this thesis. Qualitative research method with case study was employed in this thesis. The case study includes four pilot studies with Handelsbanken, Nordea, SEB and Swedbank and three in-depth interviews with Handelsbanken , Nordea and Swedbank . The result of this study shows that price, speed, convenience, mutual cultural sharing and recommendations from friends are those main reasons for Diasporas to choose informal money transfer channels. In term of money transfer service offered by Handelsbanken, Nordea and Swedbank, the result implies that there may exist some difficulties for the users to understand the information of money transfer service obtained from the banks’ websites and internet banking systems. Another shortcoming is that front line employees have limited time to spend on each customer to explain how the service works. In general, all three banks should find ways to structure the information related to the service on their websites in a way that customers find it easy. They should prepare hard copy or online brochure to help customers understand how the service works. It will also mean that employees will spend less time on each customer since they have quick access to the information needed. All of these changes will improve the relationship between customers and front line employees in the banks, who directly handle every customer and have an important influence of persuading them to use the money transfer service.