Denmark’s newly merged megabank AL Sydbank is raising fees for over one million customers in a market where, according to the Danish Competition and Consumer Authority, only around 3 to 4 percent switch provider each year, despite official analysis showing switchers can save over DKK 1,000 annually on fees and interest.
The fee hikes arrived by e-Boks in June, in long technical letters about “price and product adjustments.” Given historically low switching rates, many customers are likely to absorb the increases rather than move their money. That behavior is precisely what the Danish Competition and Consumer Authority has repeatedly warned about in recent analyses of retail banking. The authority describes the Danish bank market as complex, with prices scattered across fee schedules, making it hard for ordinary consumers to compare total costs and contributing to widespread inertia.
AL Sydbank emerged last December from the fusion of Sydbank, Arbejdernes Landsbank and Vestjysk Bank. The merger created one of Denmark’s largest retail banks with over one million customers and a significant share of household deposits. Now the bank is harmonising its inherited fee structures. Consumer advocates and competition experts warn that fee harmonisation after mergers can pull prices toward the higher legacy level rather than the cheapest.
Why so few customers switch
According to the Danish Competition and Consumer Authority’s 2023 retail banking analysis, only about 3.4 percent of Danish consumers changed their main bank in the previous twelve months. Many consumers believe they could save money by switching, yet the process is opaque and administratively heavy.
For internationals, the barriers are higher still. Opening a Danish account requires a CPR number, MitID and often in-person identity checks that are harder to navigate without fluent Danish or local credit history. Many expats report being refused accounts or offered only basic products until they have been resident for months. Because employers and social authorities mandate a NemKonto, you cannot simply move to a foreign fintech. You remain locked into the domestic banking system.
That lock-in matters when fees rise. According to the Competition and Consumer Authority’s 2023 analysis, an average household with typical loans, deposits and payment services can save around DKK 1,400 per year by moving from a relatively expensive to a cheaper bank. A 2017 analysis put the potential saving closer to DKK 1,000 per year, indicating rising pricing dispersion across the market.
A highly concentrated market
According to the Danish Competition and Consumer Authority, Denmark’s retail banking sector is highly concentrated by household deposits, and concentration has increased since 2015, driven by mergers like the one that created AL Sydbank. The authority’s analysis highlights that loyal customers often pay more than active switchers, describing this as a competition problem. Banks are not required to offer existing customers the same deals they advertise to new ones. In a market where switching is rare, that asymmetry becomes a structural penalty for inertia.
Timing and the stalled reform package
AL Sydbank’s fee changes land while a key reform remains unimplemented. The previous government proposed a bank competition package aimed at strengthening price transparency and reducing switching frictions. As reported by the Ministry of Business, the package aimed to develop a standardised price index for banking products, enabling consumers to compare their total annual costs between banks in one view.
The proposal has not yet been implemented, pending review by the new tax and growth minister. Meanwhile, banks continue to leverage their scale and customer inertia. Under the Payment Services Act, they must give at least two months’ notice before adverse fee changes and allow customers to terminate contracts free of charge before the effective date. Many customers received their AL Sydbank letters in June for changes taking effect later in the year.
What you can do
If your fees have risen, you have concrete rights. You can close your account without exit fees before the change date. The hurdle is securing a new Danish account first. EU law guarantees all legally resident consumers access to a basic payment account with essential services, even if you are considered higher risk or lack credit history. That is a safety net for expats worried about refusal.
The government-supported comparison site Pengepriser.dk, operated by the Competition and Consumer Authority, lists banks’ standard fees and interest rates. The interface is mainly in Danish, but tables and numbers translate easily. NemKonto.dk explains how to change your designated account. The switch typically takes a few banking days, but salary payments and direct debits may require coordination with employers and creditors. Consumer organisations advise overlapping accounts for at least one month to avoid failed payments.
Households with good incomes, loans and investments may be able to negotiate individual fee waivers or package discounts if they contact their adviser and reference competitor offers. This is standard Danish banking practice, but many internationals do not realise it.
The broader pattern
Denmark’s reliance on MitID and national registries means integration into the banking system is both a gatekeeper and a vulnerability. Without a Danish account, everyday life is nearly impossible. Once inside, the costs of exit are high. Some organisations argue that this combination leaves foreign residents especially exposed to untransparent fee changes and aggressive cross-selling.
AL Sydbank’s harmonisation is neither illegal nor unusual. It is the predictable result of consolidation in a market where customers rarely move and stronger transparency rules remain unimplemented. Whether the stalled bank package will eventually change that dynamic remains unclear. According to the Competition and Consumer Authority’s latest analysis, many households could save over DKK 1,000 a year by switching to a cheaper bank, yet only a small minority actually change bank each year.
