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The 2021 Nordic Report is live

A joint undertaking between Fintech Mundi and findexable and with FCG, Huawei and Mastercard, the report seals the success of the Nordic fintech community, which stands strong, with investors and innovators hard at work across the space.

The region’s early success at moving away from cash, its embrace of collaborative models for the development and distribution of innovative financial services long before fintech became every bank’s favourite bandwagon, and commitment to digital services have created the foundations for a thriving fintech ecosystem.

Global Fintech Index

Fintech Mundi has teamed up with long-standing partner MagnaCarta Communications and a coalition of other global partners to identify, compare and track the development of fintech everywhere – even in the furthest corners of our planet.

Launching in October, the Global Fintech Index, presented under the banner of Findexable, will be the first fully global index of cities ranked by fintech activity.

Fintech Mundi’s Susanne Hannestad explains the needs of the fintech sector in the Nordics and how accurate, tangible data can help raise the Nordics’ status as a hub of fintech innovation globally.

Fintech after 2020

• The Nordics are a fintech powerhouse but new report shows that progress is at risk of stalling without effective partnerships
• Confidence in the region as home to great ideas stands at 68% in 2019 (14% up from 2018)
• 67% of survey respondents feel the region needs greater access to investor capital to realise its potential
• 52% believe greater bank openness to partnering will help the region become a global fintech hub

The Nordic and Baltic region has all the building blocks to generate wealth and opportunities and is punching above its weight in terms of producing unicorns, moving from start-up to critical scale-up phase and it leading the rest of Europe on Open Banking and PSD2 progress. Results from the fourth Nordic Fintech Disruptors Report launched during Money 2020 in Amsterdam finds confidence in abundance at 68%, 14% up from 2018.
 
The report produced by MagnaCarta and Fintech Mundi in partnership with Mastercard and BDO, is a comprehensive review of the current position and future trends in Nordic and Baltic fintech. It features extensive interviews with banks, fintechs, regulators, accelerators and leading innovators, alongside the results of an industry-wide survey.
 
Although more than half the survey respondents believe that the Nordics and Baltics will dominate the fintech landscape after 2020, the confidence is tempered with realism and a recognition of key challenges. 67% of respondents feel the region needs greater access to investor capital to realise its potential (24% higher than 2018), while over half believe that greater openness to partnering will help the region compete on the global stage.
 
Against this background, this year’s report is more of a manifesto, setting out a vision for how the region can fully realise its strengths and take full advantage of the new era of integrated digital finance. Much of the answer still lies in viable, effective partnerships and a better connected fintech ecosystem which offers the best chance to:
 

• Attract skills and talent required to continue developing the marketplace
• Bring more customers on board to create sustainable businesses
• Serve and support new businesses to create more winners
• Fertilise new ideas at scale and shorten times to profit
• Grow the region’s reputation to create a virtuous circle for success

“Since we started the research in 2014 we have seen a region that has outperformed many in developing and nurturing fintech innovation but true collaboration and trust across the ecosystem remains an issue which has to be addressed if the region is to fulfil its potential as a global fintech hub, ” comments Simon Hardie, author and publisher of the report.

The report is a call to arms for banks, investors, regulators, public bodies and for the fintechs themselves,” says Susanne Hannestad, CEO of Fintech Mundi, a prominent Nordic based fintech accelerator. “The Nordic and Baltic regions are ideally placed to out-perform their peers in Europe, but only if we can find a more effective way to work together. We are not there yet.”

New mobile money propositions could reduce the world’s unbanked population by more than a third

A new report from Mastercard confirms the power of mobile technology to improve financial inclusion. The research shows that 15 countries account for over 60% of the global unbanked population, where 607 million people have a mobile phone, but do not yet have a bank account. Mobile technology could therefore provide them with immediate access to the benefits of financial inclusion.

In 14 of these countries, the number of people with a mobile phone outnumbers the number of people with a bank account by several million (rising to 204 million in China). The only exception is India, where more people have a bank account than a mobile phone.

However, the report emphasises that simply providing access to financial services is not enough to address financial exclusion. To achieve any real impact, people also need to become active users of financial products. Globally, 20% of people with a bank or mobile money account have not used it for more than a year, and many more people only ever use their account on an occasional basis.

In the absence of banking services, or if financial products are rarely used, people inevitably turn to informal providers, such as neighbourhood savings clubs, local money lenders, and unlicensed remittance services. Most people on low incomes tend to be experienced users of these informal financial products, and to have intricate and well-ordered financial lives. However, they do not have legal protection, face significant risks, and may pay more for a vastly inferior product.

As the report says, “the battle for inclusion is not about creating completely new behaviours or building entirely new markets. Nor is it about providing simple access to the financial mainstream. It is about how bona fide players and regulated providers can do a better job of out-competing the informal sector.”

Another important consideration is a deep gender gap, which could be exacerbated if mobile and digital technologies were to become the predominant delivery channel for financial services. In developing countries, for example, there is already an eight-percentage-point gap in account ownership (67% or men have an account compared to 59% of women). This gap extends to double-digits in many countries, such as Morocco and Peru, and reaches 30% some countries, like Pakistan and Bangladesh. Women are much less likely to have made or received a digital payment, more likely to have used informal financial products, and less able to come up with emergency funds in the face of an emergency.    

The report, Unravelling the Web, was commissioned by Mastercard and produced by MagnaCarta Communications. It was launched at the Financial Inclusion Summit in Oslo on 28 March 2019, where speakers included Ann Cairns, Vice-Chairman and President International Market of Mastercard, Greta Bull, CEO of CGAP (World Bank) and James Mwangi, CEO of Equity Bank Kenya.

New report reveals rapid growth in Nordic Fintech Industry over past year

• Collaborations between banks and fintechs experience rapid growth; specialisms are emerging in Nordic markets, and a first wave of consolidation in the sector is predicted by 2020.
• Nordic markets’ focus differs significantly from the rest of Europe, suggesting heightened sophistication and familiarity with fintech in Nordic markets.

A new report released today reveals that 74% of Nordic banks intend to collaborate with fintech firms in 2017. This finding is in sharp contrast to 2016’s study, which found that less than 50% of Nordic banks had any defined strategy for fintech. Evidence is also emerging of fintech specialisms in Nordic markets, and there’s strong belief in the region’s future as a fintech hub, with 72% of this year’s respondents seeing the Nordic region as the world’s leading hub by 2020.

According to the “Innovation. Delivered: Fintech Disruptors 2017 Report” sponsored by DNB, 42% of financial institutions surveyed want to expand their existing partnerships with fintech firms in addition to the 74% that want to create new partnerships, a finding that suggests a healthy relationship between banks and fintechs. 42% of banks surveyed also intend to set up fintech incubators, nearly double the 24% of banks seeking to create incubators across the rest of Europe.

The report also reveals evidence of emerging fintech specialisms in Nordic markets. Norway is developing a specialism in authentication and security with companies such as Encap, Zwipe, Promon, Signicat and the bankID consortium; Sweden is becoming recognised for e-payments thanks to companies like Trustly, Klarna, iZettle and Wrapp, while Denmark’s specialism in blockchain is seen in companies such as Chainalysis, Blocktech, Brainbot and WeMoveCoins. For Finland, Holvi, Zervant and Arex underline the country’s expertise in e-invoicing and electronic banking for SMEs.

Other findings suggest different approaches between Nordic markets and the rest of Europe which point to the Nordics’ heightened sophistication and familiarity with fintech. Whilst 56% of respondents from other European countries remain concerned with payment technologies, Nordic markets cite security and fraud management (37%) as their major concern, reflecting the fact that electronic payment is already a reality for Nordic markets. Looking ahead to 2020, Nordic respondents see a wave of fintech mergers and acquisitions (36%) and the emergence of a new banking business model (36%) as the most significant developments – whereas 43% of respondents from the rest of Europe cite real-time payments as the biggest development.

The growing partnerships between fintech and banks described in this report are not without their challenges, however, with both sides recognising that the conservative culture of some Nordic banks must change if these partnerships are to prove successful. As Halvor Lande of DNB notes, “The winning banks of the future will be those that emulate the working practices, culture and methodology of successful tech companies: smart existing banks will have to learn from fintech start-ups.”

Susanne Hannestad, CEO of Fintech Mundi, which conducted the research, said: “Nordic markets are home to a number of “unicorns” – fintech start-ups now valued at more than US$ 1 billion. This fact is reflected in the confidence of our survey respondents, and in the growing evidence of partnership between financial institutions and fintechs. Challenges remain – but our report showcases a fast-growing sector that is making its presence felt across Europe and beyond.”

Click here to download a copy of “Innovation. Distributed: The Fintech Disruptors Report 2017”

Successful Norwegian Fintech booths at Slush with Fintech Mundi

Norway’s promising fintech companies Cloud Insurance, Prego and Payr had booths at Slush in Helsinki early December in collaboration with Fintech Mundi. The Crown Prince of Norway visited our booths at Slush and had good entrepreneurship conversation with all the Norwegian fintech companies.

Slush is held during the darkest time of the year in Helsinki, Finland, Slush has always been characterized by a unique energy and enthusiasm. The very core of Slush is to facilitate founder and investor meetings and to build a world-wide startup community. More than 17,500 ATTENDEES, 2,300 STARTUPS, 1,100 INVESTORS and 600 JOURNALISTS were present.

• “We are amazed by how many bank and insurance companies visited us at our booth,” says Axel Sjøstedt, CEO Cloud Insurance a Norwegian Fintech startup already having footprint in 19 countries and four continents. Cloud Insurance is a Software-as-a-Service platform for the insurance industry, with extensive policy and claims management capabilities.
• “We plan for an IPO,” says Ronald Eriksen, Chairman at Prego International which is an international Fintech with everyday banking for the unbanked. Started in Malaysia with additional hubs in the Nordics and UK, total invested capital so far is in excess of USD$ 7 million with global investors. Meeting investors and customers at Slush is great for Prego.
• “We are here to attract investors and customers,” says Espen Grimstad, CEO Payr. “We have just received e-money license from NFA Norway and Payr is the next generation payment platform app empowering consumers to pay invoices in flexible and smart ways. Our customers can pay any invoice using bank account, debit or credit card or digital wallets, saving time and money. You can even save up bonus points on your credit card, while paying your regular invoices.”