Is there room for everyone in the Mortgage space?

Is there room for everyone in the Mortgage space?

Last week was a whirlwind for anyone interested in the Norwegian banking landscape, and especially when it comes to the national mortgage offering:

The most notable change is the announced merger between Sparebanken Vest and Sparebanken Sør. This is interesting news considering Sparebanken Vest earlier this year applied for the rights to the name “Sparebanken Norge” (The Saving bank of Norway). The CEO of Sparebanken Vests hints that the bank will get a new name, stating, "The name of the new bank has not yet been decided, and we will have a thorough process to build the name and brand."

The merger could also strengthen Bulder Bank, an already successful challenger in the Norwegian market that has shown impressive growth with a 60% increase in lending over the past year. The merger could provide Bulder with additional resources, including stronger equity and lower operating costs.

Adding to the competitive landscape, Eika announced the launch of Penni, a fully digital banking concept focusing on everyday banking and mortgages. Directly competing with Bulder. The bank will offer competitive prices, but it's not aiming to provide the lowest mortgage rates in the market. They will launch at the start of next year.

At the same time MyBank is also joining the competition with a new ownership structure to try to fix the struggling bank. They aim to raise one billion kroner to build what they call "Sbanken 2.0," filling the void left by Sbanken. The bank plans to focus on mortgages for customers with a low loan-to-value ratio, specifically under 55 percent, as well as deposits.

These new developments join existing digital banking concepts that have already made their mark in the mortgage market. Fana Sparebank introduced Himla in 2020, while Sparebanken Øst offers Nybygger.

What we’re seeing now is probably a result of the banks seeing a potential in pushing the prices on mortgages (after all they had once again a strong half year), as well as the potential for economics of scale for a lot of these concepts to reach a larger audience. What I find interesting is that this hasn’t happened before, and that a lot of players has stood on the sideline seeing Bulder Banks meteoric rise.

It will for sure be interesting to see if the established banks also adapt their strategies. Will Nordea consider revitalizing its Nordea Direct concept in Norway? Will SpareBank 1 consolidate efforts around BN Bank? Will DNB do anything with their approach with Sbanken? Or what about Storebrand or Sparebanken Øst with Nybygger?

For the regular customer this surge in competition is good news. As new players enter and established banks adapt, we will most likely see more competitive pricing and improved digital offerings.

AI: Powerful, but imperfect

Large enterprises are hitting pause on Microsoft Copilot implementations due to significant security and data governance concerns. According to Jack Berkowitz, Chief Data Officer of Securiti, around half of the 20+ CDOs he surveyed in New York have either halted or severely restricted the use of Copilot in their organizations. The primary issue lies in Copilot’s aggressive data summarization capabilities, which may expose sensitive information—like salary details—that employees technically have access to but shouldn't be able to view. The dilemma is particularly acute in large corporations with complex permissions structures built over time, making it difficult to maintain clean, secure environments for deploying such AI tools.

However, the situation isn’t beyond resolution; Berkowitz suggests that robust observability and governance mechanisms are key to making AI systems like Copilot work as intended. But without these safeguards, initiatives to implement such technologies will likely remain grounded. No wonder we haven’t seen widespread implementation of AI in consumer banking yet. 😅

Real vs AI-generated

It isn’t always as easy to guess if something is real or AI-generated. Try out this mini-game where you're supposed spot the real vs. AI-generated Insurance companies: