Cross-border retail clients soar 39% in Europe as number of firms falls

The number of retail clients served by firms in the EU/EEA providing cross-border services surged by 39% between 2022 and 2024, increasing from 7.6 million to 10.5 million, the latest figures from the European Securities and Markets Authority (ESMA) shows.

This is despite the total number of firms providing cross-border services reducing slightly from 380 to 370.

There has also been a marked increase in outgoing crossborder activities from some jurisdictions that saw limited activity prior to 2022, notably Estonia, Latvia and Lithuania.

The number of crossborder retail clients increased from 13,000 to 138,000 in Estonia, from 1,000 to 190,000 in Latvia, and from 500 to 2.5 million in Lithuania.

Crossborder retail clients also rose 884% in Slovakia, 360% in Portugal, and 169% in Ireland.

In some jurisdictions there was also a high concentration of cross-border activities from a limited number of firms, such as Lithuania where the increase in retail clients served abroad from Lithuania is attributed to a single company.

This means Lithuania is now the second-largest jurisdiction in terms of cross-border retail clients and complaints, which rose from 0 to 1,562.

The findings come from a follow-up report by ESMA looking mainly at the actions taken by six National Competent Authorities (NCAs) to address the recommendations from the 2022 peer review on the supervision of cross-border activities of investment services.

The original peer review identified shortcomings in the authorisation, supervision and enforcement related to the activities of Czechia, Cyprus, Germany, Luxembourg, Malta and the Netherlands.

A total of 220 firms provides cross-border services from these jurisdictions, offering them to over six million retail clients, representing almost 60% of the total EU/EEA cross-border market.

In 2024 these firms received 7,128 complaints in relation to cross-border activities, the majority of which were in Germany (4,936) and Cyprus (1,103), with these two countries representing 65% of the total number of complaints. In Germany a single investment firm reported 3,179 complaints while all other firms reported the remaining 1,757 complaints.

Overall, the number of firms active cross border in the six NCAs was a stable or slightly lower number, the number of active clients was overall stable or increasing, and most jurisdictions saw an overall stable or decreasing number of complaints. The paper noted that while Germany saw a steep increase in complaints this could have been partially due to interpretational issues.