Nordic Fintech Magazine September 2023

SEPTEMBER 2023

p.12-13

Challenging the Nordic Narrative on Fintech p.42-45

Generative Ai Redefines Finance: Outsmarting Fraud and Traditional Tactics p.30-35

Banking’s Evolution: Real Innovation or Illusion? p.70-71

Attracting the Best Talents in Tech with Nordic Digital Prowess

The greatest Fintech event in the Nordics

Join Nordic Fintech Week 2023 and take part in unlocking the future of finance.

2,000 Attendees | +70 Investors Nordic Fintech Week opens the doors to a journey like no other. Come face to face with the forces reshaping finance in the Nordics Baltics and Beyond. Featuring our boldest agenda yet, learn how Finance is blending with other industries and how Fintechs and Financial Institutions are embracing Open Finance, WEB3, Decentralisation and Ethical Finance to build the next generation of financial services.

Open Finance Track

Decentralised Finance Track

Open Banking has transformed the banking industry, sparked innovation, improved experiences, and reduced costs that benefit customers, and financial institutions alike. The time has come to supercharge Open Banking principles to a new level. Enter Open Finance, the next evolution expanding beyond banking, to unlock a world of possibilities where hird-party providers can access diverse customer data savings, pensions, investments, insurance, mortgages and offer ultra-personalised financial products. Open Finance will redefine our understanding of finance, giving consumers control over their data, transforming financial services for unparalleled convenience.

Join us at Nordic Fintech Week 2023 to explore the boldest ideas in this industry shifting new trend!

Welcome to the world where individuals control their data, transactions are secure, and trust is inherent. The emergence of a decentralised alternative financial system that operates on smart contract platforms is upending what we’ve known about finance until now. Decentralisation in Financial Services brings a new range of secure alternatives to traditional finance empowering users with true ownership of assets and platforms but also providing new and exciting services made possible, only now, through decentralisation technologies. Get ready to embrace the limitless potential of DeFi and Web3 and learn what the decentralised future of the industry looks like, only at Nordic Fintech Week 2023.

September 27th & 28th nfweek.com

+100 Speakers | +200 FinTechs Ethical Finance

The Future of Finance

Blended Finance

Ethical Finance stands out for its commitment to community-focused values. It goes beyond just sustainability and actively uses people’s money to support projects that benefit society, promote local growth, and show international solidarity. In this track we will look at the efforts that financial organisations are going through to make a positive impact in business and society, catering for the needs of those overlooked by traditional financial institutions and meeting the growing demand from savers and investors who want their money used ethically. Join us at Nordic Fintech Week 2023 and find out what the industry is doing to combine doing good while doing well.

Join us for an exhilarating track that will take you on a journey through the cutting-edge realms of banking, regulation, insurance, payments, lending, and wealth. From reimagining the way we bank to uncovering the latest regulatory trends, this track is packed with excitement and innovation. Discover how exponential technologies like AI, machine learning and robotics are reshaping the financial landscape and paving the way for a more inclusive and seamless financial ecosystem. Be provoked to see the future of our industry like never before and here directly from those reimagining the global financial ecosystem, right here from the Nordics.

Brace yourself for the thrilling synergies unfolding at the crossroads of financial services, ecommerce, retail, mobility, travel, and entertainment. As boundaries blur, a new era of extraordinary value propositions emerges, surpassing our wildest dreams. Experience the awe-inspiring collaborations where industries combine their expertise and capabilities to delight customers in new and exciting ways.

Witness the birth of groundbreaking innovations that once seemed impossible and get ready to learn how the convergence of finance and various sectors is creating bleeding edge experiences, through the extraordinary fusion of possibilities!

4

NFM’S NORDIC FINTECH DISTRIBUTION COMMUNITY Nordic Fintech Magazine exclusively works together with selected Nordic Community Partners for insights and distribution, giving us unparalleled reach with audiences across the Nordics and Baltics

Editor in Chief: Chris Crespo Journalists: Jakob Frier, Paulo Delgado, Henrik Malmgreen, Marria Qibtia Sikandar Nagra Layout: Vratislav Pecka Exclusive partner:

Published by Nordic Fintech Magazine Contact: Stian Faber, Head of Partnerships stian@nordicfintechmagazine.com

5

Thank you to all the fintech heroes contributing to this magazine!

6

Content

08-09 The Age of Disruption, The Only Constant

10-11

Amplifying Impact: Visa and Rocker Join Forces to Offer Revolutionary Customer-Centric Banking Solutions

12-13 Challenging the Nordic Narrative on Fintech

14-17

Fintech’s Digital Dance: Revolutionizing E-Commerce, Entertainment, And Trust

18

Worldline’s Omnichannel Solution: Empowering Small Merchants in The Nordics

19

Efficiency, Reliability, And Innovation: Focalpay’s Integrated Platform Redefines Merchant Payments

20-21

: “The Nordics Are a Powerhouse for Innovation” - Mastercard Evp

22-25 Nordic Fintech Frontiers

26-27

European Expansion Relies on An Innovative Nordic Fintech Environment

28-29

Flatpay and Finaro: A Partnership to Change the Payment Landscape in Denmark and Europe

30-35

36-37 38

Generative Ai Redefines Finance: Outsmarting Fraud and Traditional Tactics Close Development Collaboration Between BEC and Nykredit Has Created a Completely New Esg Universe Securing the Digital Economy: Telesign’s Commitment to Online Identity Protection

39 Copytrader: A New Era in Investing

40

Open Banking Takes the Wheel: Neonomics and Spense Supercharge Automotive Payments

41

How Normative Is Helping Businesses Lead the Way in Sustainable Finance

42-45 Banking’s Evolution: Real Innovation or Illusion?

46

Bridging Markets for Inclusive Finance: Inpay’s Approach to Financial Empowerment

47

How Payment Cards Enable Equality, Empowerment, And Scientific Innovation

48-49 BNPL Boom: A Financial Revolution or A Debt Trap

7

50-51

Fueled by Hunger: How Latvia’s Insatiable Appetite for Innovation Is Transforming Its Industries

52

Latvian Fintechs to Watch

53

Beyond-One-Size-Fits-All

54-55

What Does It Mean to Partner as a Startup with Tryg?

56-57

Fintech’s Best-Kept Secret: How Idemia’s Technology Is Fueling the Future of Payments

58-59

Danske Bank Unleashes Groundbreaking Digital Strategy After Survey Of 20,000 Personal Customers

60

Banking Circle Partnership Provides Pleo with Streamlined Payments for Business Expenses

61

Huddlestock Enters Denmark to Power Modern Investing Experiences

62

In Times of Uncertainty: Sme Lenders Should Tap into Open Finance

63

Lithuania Bet on Fintech and Won. Now It’s Doing It Again

64-65 Ai, Data, And Globalisation 2.0

66-67

Redefining Profitability in Fintech’s New Era

68

How Ai Company 2021.Ai Empowers Responsible Ai Use Across Industries

69

Achieving Win-Win Outcomes: Sprintform’s Digital Solutions Redefine Success Beyond ZeroSum Games

70-71 Attracting the Best Talents in Tech with Nordic Digital Prowess

72-73 74 75

Digital Wallet for Europe: A Leap Towards Integration or Cultural Clash of Practicality?

Salv: To Beat Financial Crime, You Need to Collaborate

Decta’s Off-The-Shelf Banking Platform Lets You Start a Digital Bank in Months

76

Alior Bank: Winning Through an Innovation-First Approach

77

The Tuum Advantage: Rich Functionality and Tailored Solutions for Diverse Markets

78-79 80-81

Competition Distortion Hampers International Growth for The Danish Fintech Environment

High-Performance Payments: The Hidden Billion-Dollar Opportunity

8

The age of DisrupTion, The Only Constant It’s that time of year again, as we gather for the second installment of Nordic Fintech Week, the crown jewel of fintech events in the Nordics. The outpouring of support from visionaries, regulators, academics, entrepreneurs, service providers, and investors has been nothing short of phenomenal.

By Chris Crespo

9

Editorial also underscored how technology

Chris Crespo Head of Content at Nordic Fintech Magazine

can safeguard our access to services, promote fairness, and preserve openness.

Open finance is knocking on our door, and it’s bringing a tidal wave of innovation. Through open banking, we’ve witnessed a remarkable fusion of financial products with the customer experiences of diverse industries. This future, though disruptive to some, illuminates the boundless potential in merging value propositions, technologies, and industries.

We are shifting the epicenter of activity away from the individual, who once served as the convergence point for finance and non-financial services.

Instead, through seamless digital “handshakes”, value chains unite to deliver real, outcome-focused solutions, bypassing cumbersome isolated and disjointed processes.

The rise of Generative AI, previously underestimated, has showcased the astonishing power of technology that learns and evolves at breakneck speed.

While AI may have claimed the spotlight, blockchain and DLT-based innovations continue to mature, addressing early hiccups.

Regulations are catching up with crypto and digital assets. Earlier this year the Markets in Crypto-Assets Regulation (MiCA) came into effect in Europe providing a much needed framework for greater clarity, transparency, uniformity and security in the world of digital assets. And central banks are not standing still, a study by the Atlantic Council think tank reports that 130 countries, representing 98% of the global economy have started projects that explore the use of central bank digital currencies (Source: Reuters). These exciting times are ushering in an era where money becomes a programmable tool, AI becomes an integral part of every decision, and our humanity is challenged as technology transforms not only how we work but who we are.

The good old days, when change was the only constant, are long gone. We now live in times where disruption reigns supreme as the sole constant force. It’s a

T

force we must adapt to and learn to master if we are to continue thriving in

his year is a continuation of

continue to face, reminding us of our

this ever-evolving landscape. Welcome

the unprecedented challeng-

increasing reliance on digital technol-

to Nordic Fintech Week 2023—where

es markets around the world

ogies. Yet, it is times like these that

the future unfolds today.

10

Amplifying Impact: Visa and Rocker join forces to offer revolutionary customer-centric banking solutions Collaboration stands at the heart of amplifying the impact of the banking landscape.

And when it is between two industry powerhouses like Visa and Rocker, making waves through their ground-breaking solutions, it is something that deserves the limelight.

From frictionless digital payments to empowering financial tools, this dynamic duo is propelling us into an era of unparalleled innovation and convenience.

By Marria Qibtia Sikandar Nagra

S

o, we got into a conversation

technologies to provide our customers

hotel industry, and Spotify in the music

with Andreas Norberg, VP

with user-friendly and cost-effective

industry. Our goal is to provide inno-

of Product at Rocker, and

products. We strive to empower them

vative products and to achieve this we

Fredrik Lindquist, Country

by giving them the right tools for their

rely on excellent partners who share in

Manager Visa Sweden to uncover the

finances. They may find it cumbersome

our vision.

driving motivations behind this strate-

at first similar to when they start a new

gic collaboration and how it is propel-

exercise regimen but we are here to

What were the challenges you

ling both companies to the forefront of

provide guidance and ignite their

encountered before partnering with

the Fintech revolution.

interest in the economy and the

Visa and what were the obstacles

potential impact it has on their lives.

you sought to overcome through this

Andreas, could you begin by

We believe that open banking

collaboration?

expanding a bit on Rocker’s vision

presents a revolution in the banking

For us, one of the main challenges

and mission and how it positions

industry. While the best product hasn’t

was our limited understanding of the

itself uniquely in the market with its

been developed yet, we anticipate a

payment landscape and how it operates.

value proposition?

similar transformative impact as seen

While we had previously worked with

in other industries with companies like

Visa as a third party, this closer partner-

Uber in the taxi industry, Airbnb in the

ship has significantly enhanced our

At the core of our business mission, we aim to leverage cutting-edge

Andreas Norberg VP of Product at Rocker

11

strategy? Have you observed any

as we strive to provide access to our

achieve and the innovative solutions we

notable differences or impacts

network and fuel innovation through

can offer. Collaborating closely with VISA

resulting from this collaboration in

collaboration. When conducting due

has opened numerous opportunities for

terms of your strategic approach?

diligence, we take into account various

comprehension of what we can

us to improve and provide more

Certainly, prior to the partnership, our

factors, including the nature of the part-

cost-effective and cutting-edge

understanding of customer payment

ner, whether they are a financial

products to our customers.

methods and opportunities was limited.

institution, fintech, or a payment service

We could only speculate about the

provider The evaluation process

What specific benefits have

available possibilities. However, since

involves assessing risks, environmental

you observed as a result of your

establishing this close partnership with

impact, and overall compatibility of a

partnership with Visa?

Visa, we have gained access to a

company with our standards, While the

Our main goal was to gain a deeper

wealth of information. This has sparked

specific requirements may vary, Visa

understanding of how Visa, being such a

numerous ideas for innovation in our

maintains rigorous standards across all

prominent company, operates and to

product offerings and has allowed us to

types of businesses we onboard.

see if working with them is as easy as it

provide a superior card experience for

seems. Initially, we had the expectation

our customers. So yeah, the direct

What were the key factors that

that they would function like traditional

partnership with VISA has been instru-

influenced your decision to partner

banks, which can be quite cumbersome.

mental in expanding our knowledge

with Rocker?

However, our experience with Visa has

and insights.

Partnering with Rocker feels like a

been completely different. Throughout

natural step for us. We collaborate with

the entire summer, which is not typical in

numerous Fintech’s on a daily basis and

Sweden where we usually enjoy five

Fredrik, we are all familiar with

onboard various businesses to fuel

weeks of vacation time due to limited

Visa as a prominent global digital

innovation within our network. As a

holidays, we have actively collaborated

payment provider, facilitating

Fintech and payments technology

with them on all our products. This has

transactions among customers,

company, it is crucial for us to onboard

been an incredible experience for us.

financial institutions, and

entities like Rocker and support their

government entities across 200

innovative ideas. We’re truly invested in

vided us with invaluable insights and

countries. However, I am curious to

the Fintech sector and want to be a part

learnings. We now have absolute con-

hear your thoughts on VISA’s broader

of driving its growth and success. So,

fidence in Visa and eagerly anticipate

philosophy and vision. From your

partnering with Rocker was a no-brainer.

what we can achieve together in the

standpoint, what principles and

upcoming autumn season and beyond.

aspirations define Visa’s identity and

How has this partnership

purpose?

contributed to Visa’s overall mission?

This stage of collaboration has pro-

Did you encounter any specific

Visa’s overarching vision is to uplift

challenges in establishing this

individuals and communities every-

instrumental in helping Visa fulfill its core

partnership, particularly considering

where by facilitating convenient and

philosophy and vision. We have a strong

the differences in culture, vision,

secure payment solutions. Our ap-

belief in uplifting everyone and creating

and working methods between

proach involves fostering inclusive and

an inclusive environment in our network

Rocker and Visa?

sustainable economies through the

and ecosystem. By adding partners like

establishment of an extensive infra-

Rocker, we continuously develop and

have successfully adapted to each

structure network. By ensuring broad

introduce new experiences. We have

other’s differences. In the initial stages,

accessibility, we enable companies to

also gained valuable insights that other

there were noticeable cultural dispari-

innovate and thrive, promoting inclusiv-

Fintechs can learn from. I also believe

ties between the two organizations. For

ity and driving the utilization of this

that it’s not a one-on-one interaction. It’s

instance, Visa utilizes a significant

infrastructure for innovative purposes.

a collaborative effort across teams and

Yes, I believe both Visa and Rocker

I feel this partnership has been

people. We have also seen the positive

number of abbreviations and internal terms which presented a challenge

What is Visa’s philosophy about

impact of leveraging the knowledge,

initially. However, once we became

partnering with other players in the

experience, and processes within Visa. It

acquainted with these terms and

ecosystem?

has been a game-changer in onboard-

abbreviations, we were able to quickly

Certainly, when considering partner-

ing clients and executing projects

familiarize ourselves and integrate

ships, Visa upholds a robust ecosystem

smoothly. I must say, that I have

that emphasizes standards and

personally gained an immense amount

resilience. We conduct due diligence

with Rocker has been a remarkable

of knowledge and experience within a

on all potential partners to ensure they

journey. We’re thrilled to support them

remarkably short period of time.

align with our measures and ethical

and contribute to their growth, while

guidelines. This applies to sourcing

also advocating our own mission.

How has the partnership between

providers who assist us in delivering our

Together, we’re making a difference in

Rocker and Visa contributed to

services, as well as businesses we

the Fintech landscape and paving the

Rocker’s overall vision and business

onboard. Inclusivity is a key focus for us,

way for future innovations.

successfully.

Overall, I would say, our partnership

Fredrik Lindquist Country Manager Visa Sweden

12

Challenging The Nordic Narrative on Fintech In the picturesque landscapes of the Nordic region, a compelling story travels. It’s not just about the serene fjords, the enchanting Northern Lights, or the legacy of the Vikings. It’s about fintech, the financial technology industry that the Nordic countries pride themselves on. And for a good reason: this small region has made a big splash on the global fintech scene. With robust economies, tech-savvy populations, and a supportive governmental framework, the region has become a fertile ground for fintech innovations and exports. At least, that’s how we like to think.

By Jakob Frier

T

o address the prevailing

to consider global expansion from the

design inherently leans towards being

narrative about the Nordic

beginning.

intuitive, simple, and deeply focused on the consumers.”

region, we discussed with Sopnendu Mohanty, Chief Fin-

Mohanty has over 20 years of experi-

“This leads me to another observa-

Tech Officer of the Monetary Authority

ence in technology and finance across

tion. Despite the pronounced digital

of Singapore, presenting four theories

both public and private sectors. He’s

consciousness and liberal, open-mind-

for discussion.

instrumental in launching initiatives like

ed society, the Nordic region’s public

Proxtera, PayNow, Project Ubin, API

digital infrastructure in financial ser-

Exchange (APIX) and the Singapore

vices is not pervasive. If I’m correct,

FinTech Festival while advising global

most of their digital payment systems

bodies on Fintech and Inclusion.

are predominantly bank-driven and not

Hypothesis 1 The Nordics stand as one of the most digitally advanced regions globally,

a public infrastructure. Comparing this

providing us with a distinctive competiThomas Krogh Jensen (TKJ): Is it

to India, with its ‘India Stack’ or Aadhaar

accurate to say that the Nordics are

Stack, many transactions in India go

among the most digitally advanced

through a streamlined set of APIs. Due

regions worldwide, and does this confer

to the scalable and efficient public

most sustainable nations, a quality

a distinctive competitive advantage to

infrastructure, businesses in India can

reflected in the developed fintech

us, especially in the fintech sector?

start operations within days.”

solutions.

Sopnendu Mohanty (SM): “People

tive edge, particularly in fintech.

Hypothesis 2 The Nordics rank among the world’s

“In the context of public digital

often view the Nordics as highly

infrastructure, the Nordics wouldn’t be

digitalized, judging from their move

my first thought. However, the Nordics

The Nordic countries are among the

towards a cashless society. Cashless

undoubtedly excel and stand out when

world’s most innovative nations, and the

signifies a high level of digital engage-

discussing private sector-driven digital

size of our domestic markets enables

ment with the community and a robust

evolution and collaborative initiatives.”

us to think globally from an early stage.

usage of digital platforms for transac-

Hypothesis 3

Hypothesis 4 The Nordics are globally recognized

tions. This is an achievement the Nordic

TKJ: What is your perspective on the

countries should take pride in.”

claim that the Nordics are among the

“This gives them a significant edge

world’s leading sustainable nations,

as hubs of innovation, and the size of

in crafting products relating to digital

and is this sustainability evident in their

our local markets gives us the insight

services. The essence of their product

fintech solutions?

Thomas Krogh Jensen CEO, Copenhagen Fintech

13

believe it’s connected to the market size.

Sopnendu Mohanty Chief FinTech Officer of the Monetary Authority of Singapore

Nor do I think global connectivity is the sole reason for their success. Simply put, they produce outstanding products.”

“Furthermore, I’d like to share a personal perspective, though I’m uncertain how widely it’s shared. To me, Nordic societies appear to be among the kindest globally. They exude empathy, hold liberal views, respect individual boundaries, and are incredibly accommodating. Such evolved societal values likely influence product design. Being a society that’s more open-minded and freer from the common prejudices related to race, religion, and gender sets them apart.

And I’m convinced that this societal advancement contributes to the superior quality of their products.”

TKJ: Are the Nordics internationally acknowledged for being centers of innovation, and does the size of their local markets equip them with the foresight to think about global expansion right from the outset?

SM: “I often circle back to a foundational belief of mine: excellent products stem from an enlightened mind. When the mind embraces social inclusion, when it their sustainable foundation. Due to their

exudes empathy, and when it genuinely

ronmental, Social and Governance) is

economic strengths, Nordic compa-

cares for its environment and communi-

primarily an economic concern, encom-

nies work seamlessly with responsible

ty, innovation naturally flourishes.”

passing sustainable farming, power and

partners. However, their solutions aren’t

water maintenance, and waste manage-

directly applicable in Africa or Asia. Asia,

in the Nordic regions. The progression

ment. Nordic countries have long prac-

in particular, needs a shift from a ‘brown’

towards being an incredibly empathetic

tised sustainable principles, naturally

economy to a ‘green’ one.”

society undoubtedly provides a com-

SM: “Sustainability and ESG (Envi-

“This is what seems to have transpired

placing them ahead of many nations.”

“I’d like to see Nordic companies de-

petitive edge. However, my earnest

“The Nordic countries’ natural, sus-

velop tailored solutions to guide Asian

hope, not so much a critique, is for the

businesses’ sustainability journey.”

Nordics to extend their wisdom and

tainable edge in their economy is now

values, emphasizing the significance of

visible digitally. By digitally showcasing their sustainable practices, they en-

TKJ: From your viewpoint, are the Nordic

an empathetic society in fostering inno-

hance transparency, making their sus-

countries among the world’s most inno-

vation, especially to parts of Asia that are

tainability progress clearer and more

vative nations? And do you believe the

grappling with myriad social challenges,

accessible. This gives their sustain-

size of their domestic markets allows

including race, gender, and class dispar-

ability transparency index an intrinsic

them to adopt a global mindset from an

ities. Overcoming these hurdles is crucial

advantage in detail and precision.”

early stage?

for creating exceptional products.”

“From our experience, sustainability

SM: “Nordic nations are truly privileged.

“For Nordic fintech firms looking to

data primarily comes from payment and

It’s not the market size that made Nordic

enter Asia, I recommend Nordic compa-

ERP systems used by businesses. Nordic

products stand out. Instead, it’s the sheer

nies focus on the B2B segment. They

countries’ inherent sustainability gives

quality of their offerings. Nordic prod-

can act as the backbone for local B2C

their fintech firms an edge, allowing

ucts excel because of their meticulous

entities, offering solutions like fraud

them to develop unique ESG soft-

design, thoughtful engineering, and

prevention, insurance, pension schemes,

ware solutions on easily available ESG

excellence.”

and wealth advisory. Navigating the B2C space might be challenging due to

related data. Where other regions lag in

“This superior quality spans various

sustainability, Nordic fintechs can guide

sectors, from food to gaming and other

cultural differences, but Nordics excel in

them, setting standards in disclosure,

solutions. The consistent quality of

product innovation and can thrive in Asia

benchmarking, and transition based on

Nordic nations is undeniable. And I don’t

with a B2B strategy.”

14

The fusion of fintech with various industries, such as e-commerce, automotive and entertainment, is reshaping the digital landscape.

Fintech’s Digital Dance: Revolutionizing E-commerce, Entertainment, and Trust

By Jakob Frier

The fusion of fintech with e-commerce and entertainment is undeniably reshaping the global digital landscape. As businesses harness the power of advanced technologies, they’re tasked with ensuring the security and privacy of their consumers. The future rests on this delicate balance: innovating for convenience while fortifying trust.

A

s digital platform usage

efficient, and cost-effective but has also

bank accounts, insurance, and loans.

increases among consum-

introduced new services like embed-

While major tech giants have ventured

ers, businesses are modify-

ded finance. This transformation has

into this realm, we see more companies

ing their customer service

boosted several industries through

branching out across all industries.

approaches. Concurrently, with growing

mobile payment apps, digital wallets,

A 2021 survey from German Solaris-

customer expectations, there’s a trend

and contactless payment solutions,”

bank and Handelsblatt Research Institute

where companies, through “embedded

remarks Dr. Anamika Datta, an e-com-

shows that 61 per cent of Germans would

finance,” can now offer financial ser-

merce tech professional drawing upon

purchase financial services from online

vices, transforming the way they cater

her rich experience and industry obser-

shops. The willingness will affect other

vations from Zalando and Amazon

platforms and providers with whom both

to financial needs.

“Traditional banks, known for their

To realize this vision, companies will

consumers and businesses have estab-

brick-and-mortar branches and manual

aim to equip their customers with a

paperwork, have been revolutionized

range of banking and financial tools.

E-commerce giants like Zalando,

by fintech. Fintech has not only made

These tools will encompass standard

Asos and Farfetch are working to create

banking services more accessible,

bank services like digital payments,

a seamless online shopping experience

lished trustworthy relationships.

Dr. Anamika Datta E-commerce tech professional

15

for customers in everything from browsing to delivery.

“Traditionally, the e-commerce customer journey has multiple steps, with payment being a crucial step that could enhance or hinder the overall customer experience. With the introduction of

$15 trillion

2 thirds

30 per cent

global digital payments revenue is expected to reach $15 trillion by 2027.

Source: Dr. Anamika Datta, E-commerce tech professional

of adults globally use digital payments, and digital wallets make up half of all e-commerce sales, excluding the 20 per cent from credit cards.

With data-driven insights, e-commerce giants witness a whopping 30 per cent increase in customer engagement.

half of all e-commerce sales, exclud-

transaction experience, eliminating the

ing traditional banks to e-commerce

30 per cent increase in customer

ing the 20 per cent from credit cards.

cumbersome process of fishing out

platforms, it offers multiple payment

engagement. With transactional

This advancement in payment meth-

physical cards. Lastly, thanks to ad-

solutions. This allows SMEs to provide a

data, SMEs can make more informed

ods offers customers a multi-channel

vanced encryption and anonymization

variety of payment options for their cus-

purchasing, pricing, and discounting

shopping experience, allowing them

techniques, digital wallets provide a

tomers, catering to diverse preferences

decisions. This leads to better de-

to buy from various platforms seam-

safer alternative, sidestepping the risks

and ensuring they can service a broader

mand forecasting, which increases

lessly, including through conversa-

of theft or loss associated with cash

audience. Just like we see it with Paytm

the likelihood of repeat purchases

tional commerce.

and physical cards.

in India,” Dr. Datta says.

and fostering customer loyalty,” Dr.

fintech and digital payment methods, the online shopping experience has been significantly improved.”

According to Dr. Datta, global digital payments revenue is expected to reach $15 trillion by 2027. Two-thirds of adults globally use digital payments, and digital wallets make up

Embedded finance, in collaboration

Datta says and concludes:

Empty carts filled

Fintech empowers SMEs through data

with fintech, offers real-time transaction

Transactions become a natural part

In the dynamic world of e-commerce,

data. For SMEs, this immediate data

en analytics transform e-commerce

of the shopping journey without any

the entry of fintech has acted as a

access enables quick adjustments to

companies into customer-centric, prof-

hurdles. According to Dr. Datta, 35 per

bridge connecting traditional financial

products, pricing, or marketing strat-

it-making juggernauts. From

cent of consumers check available

institutions and e-commerce plat-

egies based on current market trends

fraud-busting to dazzling recommen-

payment methods even before placing

forms, enabling small and medium

and customer behaviours and can give

dations, these analytics elevate the

an order. Zalando, Amazon Fashion and

enterprises to gain access to more

SMEs a competitive edge.

game, leaving customers enchanted

Asos publicly published reports nearly

financial services.

half of the customers have abandoned a purchase due to the absence of their preferred payment method.

“The abandoned cart phenomenon is decreasing by a steady rate thanks to adding digital wallet payments to your e-commerce store; you are more likely to end up offering at least one of a customer’s preferred and trusted payment methods. Being able to meet customers where they’re comfortable is a major advantage when it comes to winning a sale and securing repeat customers,” Dr. Datta says.

The evolution of payment methods has come a long way from the traditional catalogue days when individuals had to send money orders or make payments at post offices physically. Today, the rise of digital wallets, exemplified by platforms like Apple Pay, offers many advantages. According to Dr. Datta, there are three reasons for this: Firstly, they reduce the margin for error as users no longer need to input lengthy card details manually. Secondly, these platforms offer a seamless

“As fintech is a bridge connect-

“With data-driven insights, e-commerce giants witness a whopping

“In a nutshell, fintech and data-driv-

and operational strategies oh-sosmooth.”

Local vegetable sellers become e-commerce companies The Indian Paytm capitalized on a unique situation in India when the government demonetized larger currency notes to combat corruption.

Amidst a scenario where the nation had numerous micro-businesses - from street-side stalls selling vegetables, coconut water, and flowers to chai vendors, all usually dealing in meagre amounts - Paytm introduced an easyto-use QR code system.

These vendors, many of whom are illiterate, could now bypass cash transactions, as customers simply scanned these QR codes to transfer payment directly into the seller’s Paytm account. Realizing that many vendors couldn’t read notifications, Paytm incorporated voice authentication to announce received payments. Even vendors without traditional bank accounts benefited, bringing a substantial portion of India’s 80% unorganized market segment

online. With Paytm’s innovation, even the humblest local vegetable vendor could step into the realm of e-commerce.

Unlocking entertainment’s future The transformative power of fintech isn’t limited to e-commerce. The entertainment industry is also getting a taste of the revolution.

The advent of digital currencies, e-wallets, and blockchain systems has made global transactions almost instantaneous. As a result, international audiences can easily access content or services without geographical limitations. For creators, this means that they can now reach and monetize their content in markets previously out of their reach.

And especially for small and medium-sized businesses, these novel payment methods are a boon.

“They lower transaction fees,

diminish the reliance on traditional banking systems, and enable microtransactions, making it feasible for businesses to monetize even the smallest digital goods or services.

Additionally, blockchain’s transparent nature can foster trust between businesses and consumers, making it easier for emerging companies to establish credibility,” explains Morten Rongaard, CEO and co-founder of Reality+, who advises brands and companies on the opportunities in the new paradigm for applications on the internet – the so-called Web3.

Fintech offers means to streamline transactions, which has revamped the monetization methods available to entertainment platforms. This is evident through the rise of in-app purchases, virtual goods sales, and premium subscriptions that have become revenue staples for many entertainment providers.

16

Bringing fintech into new industries poses privacy challenges as fintech platforms store a lot of personal and financial data, making them attractive to cyber threats.

The intertwining doesn’t just stop at

Financial institutions, recognizing the

stored by fintech platforms makes them tempting targets for cyber threats.

transactions. The vast data

immense potential of the entertainment

entertainment companies possess,

industry, have begun to diversify their

The use of blockchain technology

from how users consume content to

operations. They’re either forging part-

presents an avenue to address many of

their spending habits when coupled

nerships with successful entertainment

these concerns, according to Rongaard:

with fintech, opens the door to

ventures or directly investing in them.

tailored financial products.

Simultaneously, the vast audience

“Data breaches involve unauthorized access to sensitive data. With block-

base of entertainment platforms is

chain’s decentralized nature, data isn’t

“Imagine getting a unique credit offer

being tapped into to promote financial

stored in a singular location, making

based on your favourite movies or a

education and literacy, which is es-

it less susceptible to breaches. Every

savings scheme aligned with your music

sential in an increasingly digital world.

transaction on the blockchain is record-

streaming habits. The melding of these

“We’re also witnessing an uptick in

ed on multiple nodes, ensuring that

two sectors also leads to innovative

joint ventures between these sectors,

data remains intact even if one node is

marketing strategies, such as cross-pro-

leading to co-branded products that

compromised.”

motions and loyalty programs, where

intertwine financial benefits with en-

Phishing attacks and transaction

tertainment perks,” Rongaard says.

fraud have also seen a rise with the

the lines between entertainment and

digitization of transactions. Again, Ron-

finance blur. You could be offered exclusive show tickets as a banking reward or

Battling fintech’s cyber threats

gaard argues that blockchain’s trans-

get special deals on a streaming service

Merging fintech and new industries

parent ledger system can be leveraged

when using a particular payment chan-

introduces various privacy challenges as

to verify the authenticity of transactions,

nel,” Rongaard explains.

the extensive personal and financial data

making unauthorized or fraudulent

Morten Rongaard CEO and co-founder of Reality+

17

activities easier to spot.

tial. They’re the keystones to cultivating

approvals often coming within a day.

“Each transaction is recorded in an

trust in this digital dance,” says Dr. Datta.

Such speed and convenience have made them a preferred choice for

immutable ledger, which means once

many SMEs,” she says.

a transaction is added, it cannot be

A new canvas

altered, reducing the scope for fraud,”

Not only payments and transactional data

he says.

are shaking up the e-commerce indus-

reshaped the e-commerce terrain for

Fintech-driven alternative lending has

Also, e-commerce faces growing

try. Alternative lending models, enabled

SMEs. With these platforms offering them

security and privacy hurdles due to in-

by fintech, have been a game-changer,

unparalleled access to capital, rapid loan

tegrating and using transactional data.

particularly benefiting SMEs.

processes, bespoke financial solutions,

According to Dr. Datta, 64 per cent of

With traditional lending tightening its

an expanded customer base, and the

consumers are uneasy about potential

grip, alternative lending stepped onto

means to undergo a digital revolution,

data breaches. And the numbers speak

the stage, helping SMEs. According to

SMEs are better positioned to thrive in

louder, with 86 per cent pausing trans-

Dr. Datta, 32 per cent of SMEs found it

the ever-evolving digital marketplace.

actions due to security reservations.

easier to secure funds through fin-

“Alternative lending has painted a new

What does this mean for the burgeon-

tech-powered lending platforms, fueling

canvas for SMEs in the e-commerce

ing e-commerce landscape?

their growth ambitions.

landscape. With easy access, speed,

“To address these concerns elegant-

“Fintech has transformed the

flexibility, global reach, and digital

ly, businesses must embrace robust

lending process, eliminating the need

transformation, these businesses waltz

encryption and stringent authentication

for burdensome paperwork and long

confidently into the digital marketplace,

protocols. Laws like GDPR and CCPA

waiting times. These modern platforms

embracing growth and flourishing like

aren’t just best practices; they’re essen-

boast a remarkable turnaround, with

never before,” Dr. Datta concludes.

18

Worldline’s Omnichannel Solution: Empowering Small Merchants in the Nordics In the world of payments, it’s easy for companies to get carried away with mega trends and aggregated data, forgetting that underneath those summarized figures sit individuals, small businesses, and micro-entities who buy and sell to survive.

By R. Paulo Delgado

W

orldline is the fourth

merce omnichannel payments platform.

“We’re not a bank, and have no inten-

largest payment play-

Worldline’s goal with One Commerce

tion of becoming one,” says Mette Lykka

er in the world, and the

was to give merchants a single con-

Vibe. “But we can fill a gap where new

number one payment

tract, rather than separate contracts

businesses just need a small loan for

and small businesses—the local butch-

simply into a product that, actually, is

er, hairdresser, coffee shop—found it

quite complex in the background,” says

very difficult to understand what they

Mette Lykke Vibe. “The complexity in

were paying for their payment pro-

the back-end of payment solutions

cessing solution, and to whom,” says

shouldn’t be the merchant’s problem.”

Our purpose is to onboard merchants simply into a product that, actually, is quite complex in the background.

The complexity in the back-end of payment solutions shouldn’t be the merchant’s problem.”

Worldline Global. “These merchants

Helping merchants during the pandemic

Mette Lykke Vibe Head of Denmark at Worldline Global

had multiple contracts and vendors,

Although the simplified solution was a

merchants to have a simple overview

and we wanted to simplify this.”

major achievement in itself, the value of

of all their payment activities, and also

processor in Europe, yet its approach

for the device, the EPSP, and possibly

to micro-entities and small businesses

even the acquirer. Merchants also only

reflects the care that often sits behind

deal with a single interface, regardless

major success stories.

of whether they accept their payments

In 2015, the company saw a gap in the Nordics: “We saw that micro entities

online or offline.

“Our purpose is to onboard merchants

Mette Lykke Vibe, Head of Denmark at

some extra tables and chairs or additional personnel for the summer season, or just some minor repairs.”

Worldline’s solution to that is called Growth Finance, a program that offers transparent terms and competitive prices for loans, letting businesses invest in their business when they’re still growing.

Worldline provides these loans to existing customers and then takes a percentage out of the merchant’s monthly fees for using its system.

“The solution makes it easy for

an adaptable, omnichannel, single-ven-

nichannel platform. Merchants could

to stick with a single supplier,” says

move all the complexity from payments

dor platform became apparent during

then share that link on social media

Lykke Vibe.

for merchants, and give them a single

the COVID pandemic.

to start receiving payments. Because

Growth Finance was also crucial

Worldline’s purpose was simple: Re-

payment solution to use regardless of

After the lockdowns went into force,

our solution was already multichannel,

after the COVID lockdowns because it

whether the merchant’s customer is

closing merchants’ stores, Worldline rec-

it wasn’t a major technical challenge.

helped businesses get started again

ognised that its Omnichannel solution

But I’m proud of the team’s effort to get

after a period of no income. Banks

could allow the company to quickly cre-

on the phone and tell our customers

were understandably hesitant to issue

ate a payment option to get merchants

directly about it.”

too many loans at the time, but it

paying offline or online.

The result was Worldine’s One Com-

created a catch-22 situation for

selling again.

Mette Lykke Vibe Head of Denmark at Worldline Global

Quick access to small loans

merchants who needed cash in a

have an online store or the budget and

Beyond the Omnichannel solution,

hurry. “We were glad we could step in

skills to create one,” Mette Lykke Vibe

Worldline also identified another financial

and help,” says Lykke Vibe, “and now

tells NFM. “So, we created and inte-

challenge that individual merchants were

Growth Finance is an ongoing part of

grated a Pay-by-link option in the Om-

running into: Quick access to small loans.

Worldine’s offerings.”

“Many of those merchants didn’t

19

Efficiency, Reliability, and Innovation: Focalpay’s Integrated Platform Redefines Merchant Payments With the ever-changing retail industry, merchants need solutions that can easily incorporate emerging technologies, cater to various customer requirements, and quickly adapt to market shifts.

enable consumers to shop however, whenever and wherever they want, and move their shopping basket and products seamlessly between contexts,” adds Veigarsson.

Ultimately, Focalpay’s philosophy remains rooted in openness. Merchants are free to cherry-pick the specific tools and functionalities they require from them. They don’t enforce a lock-in effect but instead enable the market by ensuring merchants have the best tools available, regardless of whether they come from them or other providers. Hence, Focalpay seeks to provide a flexible and comprehensive commerce platform that empowers merchants to tailor their experience, embrace new technologies, and optimize their operations based on their unique requirements.

Minimizing environmental impact Focalpay’s cloud-native checkout, backoffice, and payments services provide businesses with efficient and

By Marria Qibtia Sikandar Nagra

seamless payment processing and

T

consumers, including credit alterna-

ning on the phone, traditional sales

its clients to avoid investing in physical

and legacy infrastructure, has made

tives and inventive fintech ventures,

counters, or even e-commerce click-

equipment such as cashier terminals,

implementing new retail solutions cost-

weren’t adequately meeting the

and-collect. “We empower merchants

conveyor belts, and other hardware to

ly and challenging. Consequently, only

requirements of the retail industry, they

with the tools to leverage the best

reduce overall material consumption.

a limited number of players cater to this

decided to confront this obstacle and

that the fintech space offers, without

market. This is where the need for open

adopted a unique strategy. “We aimed

requiring significant upfront investment

Forging the path to market leadership

architecture in retail becomes more

to create a software that could co-exist

or extensive negotiations with their exist-

As a tech company, Focalpay deems it

pronounced. By lowering the thresh-

alongside architecture, eliminating the

ing suppliers. This is the essence of our

integral to embrace new trends,

old and embracing open architecture,

need for complete replacement if the

robust payment and checkout platform

challenge its architecture, and contin-

the retail industry can foster a more

market wasn’t ready. Simultaneously,

for merchants,” states Veigarsson.

uously evolve its products. Engineer-

dynamic market and create a better

we wanted to offer a wide range of

So, Focalpay developed a robust

marketplace for all stakeholders.

payment methods, particularly at the

commerce platform that empowers

their focus as they strive to stay ahead

point-of-sale for merchants. Our goal

merchants to connect their payment

in a competitive market. “Two key

provider in the world that integrates

was to enable merchants to easily

journey wherever needed. “Our focus on

aspects that have proven exceptionally

payment, checkout, and backoffice

select payment methods in-store or

merging retail and e-commerce spaces

beneficial are our transaction-based

functionality into one harmonious

online with a simple click in their admin

is best exemplified by our approach

business model and our commitment

commerce ecosystem, Focalpay’s

panel, without disrupting the cashier

to bridging the gap between physical

to standardization. Our business

commitment to openness has allowed

system or customer journey,” shares

stores and online shopping. Suppose

model, which means that merchants

it to deliver innovative software that

Birkir Veigarsson, CEO and Co-Founder

you visit a store and find that a particular

only pay when they use the system,

empowers merchants and enhances

of Focalpay.

item is unavailable. With Focalpay, you

offers merchants flexibility, allowing

This constitutes the core strength of

can use your phone to scan the item,

them to start with us at no cost and

Focalpay’s commerce platform, since

access the e-commerce site, place an

later optimize costs. This unique

it provides a unified checkout experi-

order, choose a delivery option, and

approach sets us apart from others in

ence for different wallets, in addition to

complete the purchase. While in the

the industry. Additionally, we prioritize

less integration of various payment

store, if you find other products that

integrating third-party solutions into

methods, both in-store and online,

you would like to purchase, you can

our product portfolio, ensuring that our

providing a unified interface for all

add them in the same virtual basket

merchants always have access to

contribute to a greener future. Their

raditional brick and mortar

the ground-breaking progress in the

payment options available to merchants.

platform’s architecture boasts 40-90%

retail’s limited innovation

financial technology sector. Upon

They can choose any checkout method,

lower energy consumption than tradi-

and inclusivity, hindered by

realizing that the different options for

whether through a cashier or self-scan-

tional industry systems. It also allows

complex hardware systems

Leading globally as the first software

customer experience.

Fusing payments and retail Focalpay’s platform allows for a seam-

ing excellence is at the forefront of

retail processes. The team’s initial area

Birkir Veigarsson

as the other product that you selected

emerging technologies. With these

of concentration was mobile transac-

CEO and Co-Founder of Focalpay

for home delivery. Thereafter, you can

strategies in place, we’re confident in

easily select how you want to pay for

our ability to maintain a leading

and receive each product. This way, we

position,” affirms Veigarsson.

tions in the physical store. It prompted them to investigate the factors driving

20

“The Nordics are a powerhouse for innovation” Mastercard EVP Exclusive interview: Mastercard EVP for Open Banking says the rest of the world looks to the Nordics to learn and recognise the benefits of Open Banking.

By Paulo Delgado

I

n an exclusive interview with NFM,

In Europe, Open Banking had a slow

the deployment of further services in

Bart Willaert, Executive Vice Pres-

start. But Mastercard showed a

Open Banking?

ident of Mastercard Open Banking

visionary culture of embracing Open

The Nordics have always been a

International Markets, sheds light on

Banking early-on and making it part of

powerhouse for innovation. We’ve seen

its services. Why is that?

that in payments and traditional

Mastercard’s trailblazing efforts in the Open Banking initiative, as well as how

Mastercard saw opportunity because

business—adopting electronic pay-

the Nordics’ high level of digitalisation

we believe that Open Banking is the

ments, digital payments, mobile

provides an example to new markets

way to truly bring innovation, new use

payments, and so on. It’s a continuation

to learn from.

cases, and more convenient ways for

of a solid drive to make life easier for

consumers to experience payments.

consumers and businesses.

Chris Crespo (NFM): Payments has

Many concrete use cases have already

exploded with innovation over the

taken off, such as paying bills through

Banking—we see adoption happening

past 12 to 18 months. What role

Open Banking or doing e-commerce

strongly as well as new use cases. Some-

has Open Banking played in this

payments. Credit-decisioning is an

times, we don’t even “see” them because

accelerated pace of innovation?

emerging use case we’re seeing more

they’re embedded in our daily lives.

Open Banking is an excellent way for

of, and it’s extremely powerful.

We’ve seen the Nordics leading in Open

Open Banking is still in an early

Mastercard can play a powerful role

stage, so there’s much more evolution

with third parties, and that creates

in these opportunities because of our

and many more use cases to come. But

innovation. It also creates new flows,

history in building quality networks.

the Nordics show where we’re headed.

and those new flows add value to

We’ve been doing networks since we

The UK also has high adoption—sev-

consumers and small businesses.

started, which puts us in an excellent

consumers to share their data securely

en million users use Open Banking.

When you’re making a payment—

position to add value, do it correctly,

Beyond that, things are in a more

rather than going from one part of a

and focus on quality and security for

nascent stage. In those zones, they’re

flow, such as when you get a bill or

our customers.

looking at the Nordics, and considering

invoice in your digital mailbox—you can

the benefits of Open Banking.

The Nordics and Baltics are highly

I’m meeting with customers from

But it’s not only about payments.

advanced in terms of digitalisation and

Australia, where Open Banking is

Fundamentally, a new ecosystem

the use of digital IDs. So, Open Banking

gaining traction, and they’re coming to

exists where Open Banking allows new

has really taken hold in the region.

the Nordics to learn what’s happening

now immediately pay it.

players to innovate and benefit back to consumers and businesses.

What’s Mastercard’s vision for the Nordics and beyond, when it comes to

here, how it’s happening in Europe, and what’s driving it.

Bart Willaert Executive Vice President, Mastercard Open Banking International Markets

21

thinking about broadening scope.

We’re moving away from just Open Banking to open finance and smart data. The end goal is for consumers to have the right set of data in their hands so they can share it securely, and benefit from it.

Tell us why fintechs should consider partnering with Mastercard.

Mastercard is a relevant actor here.

We started early in Open Banking, and that’s not by accident. Open Banking is a core part of our strategy because our third pillar is our new network. But to play in this network, you must do it correctly. And we’ve focused heavily on quality from the start.

To be on top of Open Banking, a company needs a reliable network underneath.

The second thing is that we’re touching the data and lives of consumers and businesses. How companies do that matters. We have a principle of doing everything in a data-privacy-compliant way.

Next to that, we need to bring and enable innovation. We’ve been in the payments industry for the last six years.

Bringing that knowledge and those assets to the Open Banking world is very relevant. It’s a massive benefit that our customers can tap into.

We’re also the only player in the space thinking of it from a completely global perspective. With our assets in the US and our presence in Austra-

Chris Crespo, Head of Content at Nordic Fintech Magazine & Bart Willaert, Executive Vice President of Mastercard Open Banking International Markets

lia and other markets, we’re able to leverage experiences and gain access across multiple regions. That’s a significant benefit for our customers.

Finally, we really love to partner.

We’re a network, which means we’re

When I look at all the advancements

a new network, and not everything is

going to do certain things, but there

on the back of Open Banking, I wonder

perfect yet. But there’s a strong drive

are many things we’re not going to

what else can be innovated on the

from the players and regulators in the

do. Not every innovation is built by

back of this. And yet we hear that we’re

ecosystem to make it more secure,

Mastercard, luckily. But we have great

just scratching the surface of what can

slicker, and more robust.

partners that do innovate and whom

be done with Open Banking.

What can we expect to see in the

Secondly, I believe we’ll see much more adoption in the coming years.

we partner with to co-create.

So, we’re looking forward to the Fin-

The use cases are there, and the play-

Tech forums to partner and invite cus-

The key message is that the solu-

ers are positioning themselves, but it

tomers to work with us and bring these

tions are already happening today. It’s

takes a bit of time for consumers to

innovations to their own customers.

not something that we need to wait 20

use it, try it, and recognise the benefits.

short term?

years to see.

The third dimension is that we’ll see

Thank you so much for taking time to

many more use cases opening up in

talk to us today. We look forward to

Firstly, we’ll experience a lot more

the existing datasets, but also with

seeing Mastercard and your

maturity in quality. Open Banking is

new datasets. The regulator is also

colleagues at Nordic Fintech Week.

But there’s still much more runway.

22

23

Nordic Fintech Frontiers The Nordic countries have emerged in fintech with each country’s distinct strengths and innovations. From Sweden’s unicorn factories to Norway’s resilient banking technologies, Finland’s vibrant startup ecosystem, Denmark’s robust digital infrastructure and beautiful products, and Iceland’s unique challenges and successes — each nation presents a fascinating piece of the larger Nordic fintech puzzle.

Dive into this overview to discover fintech dynamics, challenges, prevailing trends, and prospects across these northern European nations.

By Jakob Frier

Denmark Central to Denmark’s fintech narrative

2022 saw the inception of Denmark’s

in uncharted markets and the perennial

is its tight-knit community. With mutual

maiden fintech-specialized venture

challenge of talent acquisition.

trust-binding fintech founders, the

fund, Upfin, earmarking €30 million for

established financial sector, and other

early-stage Nordic fintech ventures.

stakeholders, Denmark enjoys a rapid knowledge-sharing ethos.

“There are no specific subsectors of fintech that currently lead significantly

“A deep-seated ‘born global’ ethos is somewhat lacking, nudging startups to

Simon Schou

align with astute international VCs for a

Chief Innovation Officer, Copenhagen Fintech

grand global leap,” says Schou.

in funding, but a strong funding signal

Another Denmark-specific hurdle

other creates faster pace knowledge

is how close you are on product-mar-

is the presence of numerous small

sharing, fosters an experience-sharing

ket-fit. It is challenging to fundraise sim-

and medium-sized banks operating

culture, which in the end creates higher

ply on story-telling nowadays; you must

on jointly owned data centres. Schou

speed of execution for the sector as

also showcase significant client growth

explains that this intricate landscape

a whole,” says Simon Schou, Chief

over a period of time,” Schou adds.

sometimes complicates partnerships

“Having a community that trusts each

for fledgling fintech ventures.

Innovation Officer at Copenhagen Fin-

“Forecasting the Danish fintech

tech, a focal point in the Danish fintech

Navigating Growth: A Delicate Phase

ecosystem with back up from estab-

According to Schou

trajectory, two arenas seem ripe for dis-

lished financial industries, supporting

Product-market fit and scaling are

ruption: climate fintechs and the Web3/

industries, startups, investors, research

essential parameters for growing

metaverse space. The intertwining of AI,

institutions and policymakers.

startups: “It’s a universal struggle for

Big Data, tokenisation, and Blockchain

Denmark shines brightly for both do-

most startups, especially European

within the Web3 and Metaverse is poised

mestic and international investors. Not-

ones; these challenges are amplified

to redefine financial services,” Schou says.

withstanding market perturbations due

by cultural nuances when expanding to

to COVID-19 and geopolitical fluxes,

new terrains.”

Denmark’s fintech realm has lured tier-1 international venture funds. Notably,

As these startups flourish, they grapple with understanding client cultures

While trading applications are just the tip of the iceberg, Denmark’s fintech ecosystem appears ready to plunge into broader financial service innovations.

24

Iceland Amidst the Nordic landscape, Ice-

Nordic countries, mainly Denmark, do.

expansion, especially in team dynamics,

land emerges with a distinct fintech

A case in point is the slow roll-out of

is crucial. Additionally, breaking into the

ecosystem. Its relatively small size,

independent payment solutions, even

market and selling their products can be

approximately 400,000 people, juxta-

with PSD2 in place.

complex. Some start-ups also deal with the classic “chicken and egg” problem,

posed with a dynamic, innovative spirit reminiscent of its Nordic neighbours,

Startup growth is a tightrope walk.

especially if their value becomes more

renders it a unique hotspot for fintechs.

Iceland is seeing more partnerships

apparent as they grow.

“While Iceland’s compact nature en-

between regular banks and new

sures closer connectivity and stream-

stand to gain significantly by taking a

lined product testing, it also poses

investing and working with these tech

more open approach, weaving fintech

challenges. Fewer market players

companies, starting a clear trend to-

innovations into their online services.

make predictions a tricky endeavour.

ward closer ties. Like banks worldwide,

Beyond the regular banking landscape,

However, this constraint becomes

Icelandic banks aim to provide a wide

blockchain in Iceland shows immense

Iceland’s strength, propelling Icelandic

range of services.

promise.

firms to gaze globally, emboldened by

“While they face challenges due to

“While it’s in its infancy and some-

affiliations with prominent Nordic clus-

their smaller structure, they also benefit

times seen as unconventional, its ability

ters,” says Gunnlaugur Jónsson, CEO of

from being more flexible and making

to transform the nation’s daily financial

Reykjavik Fintech Cluster.

decisions faster. This creates an inter-

dealings is vast. Blockchain introduces

esting backdrop for future growth and

a level of openness in banking that out-

change,” says Jónsson

paces any existing Icelandic regulations.

Adapting European rules can take a long time because only a few people

CEO, Reykjavik Fintech Cluster

Going forward, Icelandic banks

FinTech companies. Many banks are

Iceland faces regulatory dilemmas.

Gunnlaugur Jónsson

Start-ups face several hurdles as

If our banks embrace this, the future is

they grow. Staying flexible during fast

rich with possibilities,” says Jónsson.

While Finland is known for its strict

mirrors the global trend,” says Janne

it a lucrative choice for international

interpretation of EU regulations, this

Salminen, CEO at Helsinki Fintech Farm.

investors. However, the challenges

rigidity offers stability and predict-

Finland’s banks, renowned for their

faced by the global venture capital

ability for fintech firms. The regulatory

innovative spirit, have been included in

market have prompted local startups

Janne Salminen

environment, though stringent, can be

the fintech revolution. While they prior-

to tread cautiously, focusing on sus-

an advantage for companies looking

itise revamping their legacy platforms

tainability,” Salminen explains.

CEO, Helsinki Fintech Farm

to operate in a stable and predictable

and adapting to ever-evolving regula-

The future shines bright for the

tions, there’s been a marked interest in

Finnish fintech sector, with several

embracing fintech innovations.

areas earmarked for potential growth.

work on it. They often follow what

Finland

framework.

But when it comes to startup, it adds layers of complexity. The coun-

“An exemplary initiative in this space

Innovations considered standard in

try’s stringent interpretation of these

is DIAS. Here, major Finnish banks

Finland, like digital accounting and

regulations often prompts businesses

partnered with a startup, aiming to

invoicing, are deemed cutting-edge

to consider more lenient European ju-

digitise housing shares via blockchain,”

in markets like Central Europe. Such

risdictions for licensing and operations.

Salminen says.

areas offer Finnish startups immense opportunities to globalise their

Apart from that, funding is the primary challenge in the ecosystem. Those

From local legends to global

solutions, bringing their expertise to

with revenue streams have weathered

game-changers

untapped markets.

the storm, albeit at the expense of valu-

Finland boasts a robust startup ecosys-

The Finnish strength lies in product

tem, mainly active in the early stages.

development and engineering. Yet,

“However, early-stage companies

Given its small market size, the country

startups often overly focus on these

still in the process of finding their prod-

often looks beyond its borders to for-

aspects. The real challenge arises

uct-market fit face headwinds amidst

eign investors for larger funding rounds.

when they transition from product

ations compared to previous years.

the current market dynamics. This slowdown isn’t unique to Finland but

“Our track record of startup successes and reasonable valuations makes

refinement to aggressive market entry, a shift many find daunting.

25

Sweden Sweden’s fintech landscape is a marvel

market share,” Blyablina says.

and international investors. Yet, trends in 2023 suggest a dip in deals, mirror-

of interplay between innovators, gov-

That forces many fintech startups to

ernment bodies, established finance

aim for broader global markets where

ing a broader European movement

houses, and young startups. The eco-

they often grapple with complex reg-

with a significant focus on growth-

Anna Blyablina

system thrives on a unique culture of

ulatory terrains, diverse cultures, and

phase companies eyeing expansion.

collaboration, ensuring a rapid trajec-

operational dynamics.

Co-founder and chairwoman of the board, Stockholm Fintech

“Mergers and acquisitions are on the rise. Noteworthy transactions include

tory towards success.

Collaborations and a pledge to

Sambla Group’s acquisition of MyMon-

constant, with professionals moving

sustainability

ey and Francisco Partners’ acquisition

seamlessly within the financial industry,

Despite these challenges, the tradi-

of Macrobond. Parallelly, there’s a

many evolving into the next generation

tional finance industry in Sweden has

surge in fintech startups aiming for

of entrepreneurial pioneers,” says Anna

shown commendable adaptability.

the Sustainable Development Goals

Blyablina, co-founder and chairwoman

Faced with regulatory pressures, these

(SDGs), reflecting Sweden’s commit-

of the board at Stockholm Fintech.

traditional entities have found allies in

ment to sustainability,” Blyablina says.

A distinct advantage that Sweden en-

fintechs, which craft regulatory tech

The future radiates promise. Swe-

joys is its tech-savvy populace. As one of

solutions that simplify compliance.

den’s advanced digital society continu-

“The cycle of talent development is

the world’s earliest tech adopters, Swed-

“In essence, the challenges are fos-

ally presents opportunities, especially

ish consumers are enthusiastic about

tering increased collaboration between

in the financial sector, according to

engaging with innovative providers. This

traditional and modern finance entities.

Blyablina. As the world battles cli-

acceptance from consumers offers B2C

While fintechs view these collabora-

mate change, the finance sector in

fintech startups an opportunity-rich plat-

tions as revenue generators, traditional

Sweden is harnessing fintech to direct

form to gain solid market traction.

institutions see them as gateways to

investments towards sustainability,

However, the local fintech market is

strategic advantages,” Blyablina says.

aligning with the Paris Agreement.

saturated with innovative startups and

The nation boasts a strong repu-

This evolution reaffirms the nation’s

tation, producing startups rivalling

forward-thinking approach, laying

Silicon Valley in unicorn statistics.

the groundwork for a fintech industry

ing for new entrants to differentiate

This success, especially in the fintech

deeply committed to global Sustain-

themselves and capture significant

realm, has caught the eye of both local

able Development Goals.

One of the defining features of Nor-

Finance Innovation has received wide-

fintech startups, launching incubators

way’s fintech landscape is its col-

spread backing. This national fintech

and accelerators, and collaborating

laborative spirit. Norway’s tight-knit

cluster draws support from stakehold-

in initiatives like the fintech sandbox.

business environment encourages

ers, including traditional financial insti-

This collective approach culminated

Bent Gjendem

synergies between fintech startups,

tutions, Innovation Norway, regulatory

in the launch of the Norway Fintech

established financial institutions, inves-

bodies, startups, and other ecosystem

Festival, which was met with significant

tors, and research bodies.

participants.

acclaim,” Gjendem says.

CEO, Norwegian Fintech Cluster NCE Finance Innovation

Norway’s world-class payment system,

From Hurdles to Heights

reputation as a trustworthy nation pro-

which stands out as highly efficient.

However, the journey is challenging.

ducing world-class products positions

Leading this charge is Vipps Mobile

Fintech startups in Norway often need

it attractively for both local and interna-

Pay, a predominant player in the

more access to capital, reduced reg-

tional investors. Being an open, small

Nordic region known for its swift and

ulatory support, and a comparatively

economy with a deep-rooted history in

straightforward payment solutions.

lower focus on innovation, especially

exports further boosts its allure.

incumbents.

“This competition makes it challeng-

Norway

On the investment front, Norway’s

The collaboration results from

“The sense of collaboration is rooted

when benchmarked against Sweden

Norway seems poised to leverage

in the longstanding tradition among

and Denmark. These constraints can

the AI revolution in fintech. The suc-

Norwegian banks and insurance com-

pose hurdles for scaling ventures.

cess of AI, particularly within financial

panies to work together, forging a con-

Yet, the traditional finance sector

institutions, hinges on comprehensive

ducive atmosphere for innovation,” says

in Norway is very much aligned with

datasets and reliable data-sharing

Bent Gjendem, CEO of the Norwegian

fintech advancements.

mechanisms. Given its strengths, Nor-

Fintech Cluster NCE Finance Innovation.

Established half a decade ago,

“Financial institutions are readily entering partnerships, investing in

way is well-placed to assume a pivotal role in this arena.

26

European expansion relies on an innovative Nordic Fintech environment Following a successful merger, Vipps MobilePay is ready to expand and strengthen its market position in the Nordic region. The initial focus is on Finland and Sweden, but soon the company will also set its sights on other European markets. This effort will heavily draw upon the experiences gained in the Nordic region.

By Henrik Malmgreen

I

n the autumn of 2022, the EU

time and resources to create an even

the contrary, we need to be sharply

Commission approved the merger

stronger, faster, and more agile organi-

focused on both the further develop-

between Danish MobilePay and

zation that can make life easier for both

ment of our existing services and the

Norwegian Vipps. Based on an

our private and business customers,”

creation of entirely new ones, which will

agreement between Danske Bank and

says Rune Garborg. He also emphasiz-

be done in close collaboration with the

the consortium of banks behind Vipps

es that the merger opens up possibili-

Fintech environment. In the past few

in Norway, the two mobile payment

ties for expansion, not only in terms of

years, we haven’t been good enough

companies have since embarked on

a strengthened presence in Finland,

at looking beyond our own nose, so

a journey to create the best and most

where Vipps MobilePay already have

going forward, we need to become

comprehensive digital mobile payment

more than 2.5 million users, but also in

much better at keeping an eye on the

solution in Europe. The goal is to have

relation to a completely new market

innovative companies emerging on

a unified platform in place by the end

like Sweden. Additionally, there are

the scene. I can only recommend that

of the year, and according to Rune Gar-

plans for further expansion into the rest

these companies get in touch with us

borg, the CEO of the new entity, there

of Europe.

if they want to discuss collaboration,” continues Rune Garborg.

will be significant synergy effects, both

Especially when it comes to expan-

in terms of optimizing daily operational

Fintech environment thrives

costs and, most importantly, in terms of

in the Nordics

sion plans, both in the Nordics and

future development strength.

“We are pleased that the merger has

the rest of Europe, he stresses the

“There has been a quite extensive

finally been concluded, but it also

importance of being closely connected

approval process. Now we have the

means there’s no time to relax. On

with local Fintech communities. This is

Rune Garborg CEO, Vipps MobilePay

27

Vipps MobilePay boasts 11,5 million users and serves more than 400,000 stores and webshops as customers. The platform facilitated more than 1 billion transactions last year. According to CEO Rune Garborg, local FinTech environments have much to contribute to the ongoing development of services and solutions.

the best ammunition in the compe-

they are our best ambassadors. There-

to grow, and when a Dane sees the

tition against global tech giants in the

fore, it’s important that we encourage

MobilePay logo or a Norwegian sees

mobile payment market. From a Nordic

them to provide feedback and com-

the corresponding Vipps logo, it

perspective, Vipps MobilePay is privi-

ment on the user-friendliness of the

signals trust. Outside the Nordic

leged to operate in a part of the world

solutions we develop. The close and

region, the success of mobile payment

where both citizens and businesses are

local contact, as well as the region’s

solutions hasn’t been as substantial,

digitally mature. Furthermore, there’s

digital readiness, are crucial compet-

but we naturally hope that with our

a flourishing Fintech environment,

itive factors for our expansion further

platform, which I won’t hesitate to call

and according to Rune Garborg, this

into Europe,” explains Rune Garborg.

the best on the market, we can change

provides an excellent foundation for

He also sees collaboration with local

that,” concludes Rune Garborg.

the creative force needed to develop

partners as a significant factor. Addi-

Currently, the focus is on increasing

simple and powerful solutions.

tionally, he views close cooperation

efforts in the Finnish e-commerce

with regulatory authorities and a closer

market, and soon they will strategize

Users are our best ambassadors

interaction between the private and

for the Swedish market. But after-

“At present, we have a total of 11.5

public sectors as important.

wards, they will truly start looking

million users in the Nordic region, and

“As known, e-commerce continues

beyond the Nordic region.

28

Flatpay and Finaro: A Partnership to Change the Payment Landscape in Denmark and Europe In fintech, innovation often emerges from the most unexpected places. Such is the story of Flatpay, a disruptor in the POS payments scene in Denmark, and its partnership with Finaro, a global cross-border payment provider and fully licensed bank.

By Paulo Delgado

T

he story of their collaboration

Carlsen, CMO of Flatpay. “We did some

saw that Flatpay’s innovative approach,

demonstrates how a startup

mystery shopping and then investigated

coupled with Finaro’s payments solu-

with minimal fintech experi-

deeper for a few months, and discov-

tions, would enable us to create an

ence can succeed by pairing

ered that merchants were experiencing

immensely straightforward payment

with the right payments partner to

a high level of payment complexity,

process where everyone wins.”

bring a brilliantly simple POS solution

coupled with obscure pricing.”

to the market.

Before Finaro, merchants had to

Finaro, with a proven track record

navigate a confusing maze of working

of supporting payments, is a global

with several providers, for what the

Flatpay and Finaro:

cross-border provider that facilitates

Flatpay team felt should be an integrat-

Payments Made Simple

international commerce through

ed POS solution. The existing setup was

Flatpay is the brainchild of four digital

easy-to-implement payment solutions.

expensive and inefficient, and pricing

entrepreneurs and payment solution

“Finaro’s mission is to simplify complex-

was obscure. Merchants had to pay dif-

experts who were also ex-colleagues—

ity in payments,” says Ruben Nielsen,

ferent fees depending on the card their

Sander Janca-Jensen, Peter Lüth,

Finaro’s VP of Sales and Business De-

customers used for payments.

Rasmus Busk, and Rasmus Hellmund

velopment for the Nordics. “We do that

“The idea around Flatpay was to

Carlsen. Together, they sought to dis-

by creating multidimensional payment

create a super simple, all-in-one pack-

rupt the market with a simple, transpar-

solutions that generate growth and

age solution,” says Carlsen. “The name

ent, and affordable payment solution

enable peace of mind for merchants.”

Flatpay was inspired by the fact that

for small and medium-sized merchants, thereby challenging the status quo.

Flatpay wanted to make payments easier, it was a natural synergy with

merchants would pay one fee regardless of the card their customers used.”

After studying various industries, Flat-

Finaro’s core purpose. “Finaro has

The problem was that although the

pay recognized that there was an oppor-

invested immense resources into

founders had payments and entrepre-

tunity around payments for brick-and-

simplifying payments,” says Nielsen,

neurial expertise, they still lacked greater

mortar stores, says Rasmus Hellmund

“and we do it exceptionally well. We

financial technology experience.

29

After making countless calls to

ground and discovered that each found-

gaining market share in Denmark. Ad-

understand the market, the team

er had an excellent track record and

ditionally, they’re now active in Finland

business reputation. “We recognized the

and Germany, with plans to grow even

Finaro offered a white-labeled, one-

potential for Flatpay to become a mar-

further abroad thanks to Finaro’s global

stop payments and acquiring solution.

ket challenger, and we gave the green

presence. Furthermore, they’ve now

And Finaro also firmly believed in the

light to move forward,” says Nielsen. “We

started working with Finaro’s Account

Ruben Nielsen

Flatpay team and their concept.

also saw the partnership as a potential

Management Team, who continue

VP of Sales and Business Development for the Nordics, Finaro

for us to learn. We had dealt with large

working closely with them to support

A Mutually Beneficial Partnership

players in the Nordics before but never

their business’s needs.

The Flatpay team was impressed by

a startup, so the relationship was clearly

Finaro’s speed and responsiveness.

mutually beneficial from the start.”

discovered Finaro.

France Blanchard, SVP Account Management has noted: “Flatpay and Finaro’s end goals were one and the

“When you’re a startup made up of team members who’ve all quit their

The Journey to Becoming a Challenger

same—transparency and simplifying

jobs, speed is crucial,” Carlsen says.

After a few months, the Flatpay team,

payments —so we are able to learn

“Finaro understood us and took us

with the help of Finaro, had an MVP.

from each other and build something

seriously from the beginning.”

There were two reasons why Finaro

Finaro helped the team debug minor issues as they arose, but initial live-test-

together that works for all parties and enables us to thrive and grow.”

There is no doubt that in the current

took the team seriously, Nielsen tells

ing made it abundantly clear that the

NFM: (1) Finaro grants all serious

product and pricing had an excellent

landscape, the Nordic and European

requests the attention they deserve. (2)

market fit. The team was motivated to

markets are ripe for consolidation in the

The Flatpay team had a solid concept

push ahead. “Finaro had to adapt based

payment sector. The two regions only

backed by market research.

on market insights obtained from hands-

have a few specialized POS players,

on cases while working with Flatpay,

and Finaro considers its partnership

tells NFM. “They wanted to go to the

and that helped us better recognize

with Flatpay a strong strategic move to

market with free terminals, which we

what’s needed to disrupt the Nordic and

expand in these markets.

hadn’t seen in most of Europe. Starting

European payment landscape.”

“Their concept was unique,” Nielsen

Together, we believe the Nordics and Europe will eagerly adopt trans-

in POS instead of eCommerce was also

In summer of 2022, Flatpay went to

untraditional, as the POS market is com-

market, during which they fine-tuned

parent solutions in the payments

plex and not 100% digital. That excited

the customer experience, and then

sector, ultimately freeing themselves

us because it meant more potential op-

they started focusing on scaling in late

from the constraints of outdated

portunities for challenging the market.”

2022. Since then, they’ve onboarded

legacy systems. And when that

Finaro checked the team’s back-

over 2,500 customers and are steadily

happens, we’ll be ready.

Rasmus Hellmund Carlsen CMO, Flatpay

30

Generative AI Redefines Finance: Outsmarting Fraud and Traditional Tactics The financial landscape could undergo a seismic shift in an era driven by generative AI. AI’s role is undeniable, from predicting market trends to enhancing customer experiences. Institutions that adapt to this transformative technology position themselves to thrive in a dynamic and increasingly competitive market, armed with the tools to outpace fraud, streamline operations, and navigate complexity.

By Jakob Frier

31

F

or 150 years, one looming

forecasting, and fraud detection by

concern has echoed across in-

processing and integrating information

dustries: Will machines replace

from varied data sources.

humans in the workforce?

Financial institutions, like banks,

This old narrative is re-emerging with

have a historically complex techno-

greater vigour as generative AI enters

logical infrastructure and many banks

the scene, potentially sidelining human

are stuck in long, inefficient processes

decision-making power.

of manually moving and restructuring

“’ Throughout history, while some

data. Instead, they should be investing

jobs have been made obsolete, new

in AI systems to automate these tasks.

ones have always emerged. But there is

“The adoption of generative AI will

a substantive difference this time. And I

replace outdated manual processes,

do believe that a business owner might

leverage its unparalleled analytical

have AI entities heading major depart-

prowess, and harness its predictive ca-

ments like marketing, finance, and HR

pabilities for better decision-making,”

within three years,” says Casper Skern

he argues and continues:

Wilstrup, CEO and founder of Abzu.

“Many of today’s banks are engaged

Generative AI, often referred to as

in extended 5-year projects to manually

transformer models, can produce out-

move data from one system to another, a

puts like text, images, and videos based

process that is not only costly and prone

on the given input. These transformer

to errors but also lacks a strong business

models, when prompted with a question,

justification. Were I in a bank’s position

generate a response. However, the fas-

today, I would redirect funds from data

cinating aspect is the generation and the

reorganization efforts towards systems

model’s ability to evoke and present an

that can automate this task for me?”

appropriate answer to the user’s query.

Drawing parallels with historical

And according to Wilstrup, early

research methods, like Johannes

adopters of AI in this domain are likely

Kepler’s synthesis for planetary mo-

to have a competitive edge over others.

tion, Wilstrup points out that AI can

A prime example of this influence is

analyze enormous data amounts and

visible in customer service.

extract meaningful insights, like what

“At present, when a customer inter-

researchers do. He emphasizes that

acts with their bank via a chatbot, the ex-

AI’s ability to “crunch” data and derive

perience can sometimes be impersonal

synthesis is unmatched, making it

and limited. These chatbots cannot

invaluable for financial analyses.

frequently recognize the user, cannot re-

“With the complexity of generative

trieve specific user data, and often fail to

AI, financial institutions can make more

grasp the nuances of individual custom-

informed decisions, predict market

er agreements or contracts,” he says.

changes with higher accuracy, and

Enhancing these digital agents

ensure they’re one step ahead in the

with AI can provide a more tailored

ever-evolving financial landscape.”

and seamless experience and make chatbots resemble something akin to

Improving investment risk modeling

ChatGPT, understanding individual user

In an industry where timely and accurate

history and providing targeted respons-

information is crucial, generative AI pro-

es. Wilstrup anticipates a shift from the

vides the tools to stay ahead of the curve.

current web interfaces to more interactive, question-driven interfaces:

Given the capabilities of generative AI in risk modelling and management,

“Advanced algorithms can analyze a

financial institutions that adopt these

customer’s transaction history, prefer-

technologies are likely to be at a sig-

ences, and behaviour patterns. This da-

nificant advantage. Investors can make

ta-driven approach can enable financial

faster, more informed decisions, identify

institutions to offer bespoke financial

emerging risks, and tailor their services

products, advice, or notifications that

to individual customer needs.

cater directly to an individual’s needs.”

The technology offers a flexible and more encompassing approach to

Outsmarting Banking Dinosaurs

estimating the likelihood and nature

Another critical area is data analysis,

of negative investment scenarios than

encompassing credit risk, financial

traditional methods.

Casper Skern Wilstrup CEO and founder, Abzu

32

Due to traditional models’ simplicity, they do not capture the full spectrum of market behaviour and are merely a subset of what generative AI can do.

“Generative AI can produce a better risk input to existing investment analysis frameworks. With a better risk input, you should be able to produce better investment output even with existing frameworks. But the best solution is, of course, to use new and improved analysis frameworks that allow you to reap the full benefit of the improved risk input stemming from generative AI,” says Anton Vorobets, CEO and founder at Fortitudo Technologies, a fintech providing innovative investment software to institutional investors.

Using generative AI for risk prediction and management in financial markets presents specific challenges. A primary concern is avoiding model overfitting to historical data, ensuring the model identifies and captures structural patterns rather than temporary, non-recurring noise.

“The only way to address this issue is to educate people in rigorous use of generative AI methods, focusing on avoiding overfitting. There are also some challenges with people becoming comfortable using generative AI methods because these are new and more advanced compared to traditional methods that are perhaps a bit easier to interpret,” Vorobets explains.

Vorobets points out that the optimal datasets for training generative AI for investment management come from liquid markets that are updated frequently and promptly. The quality and volume of the data play a crucial role in ensuring precise forecasts and risk evaluations.

More stable and resilient financial markets The advanced technology excels in understanding the intricate details of financial markets, especially during times of significant losses.

Traditional investment strategies often operate under the misconception that asset dependencies remain the same regardless of market conditions. However, generative AI provides clarity on how these dependencies change during adverse situations versus standard or positive market scenarios.

33

With the complexity of generative AI, financial institutions can make more informed decisions, predict market changes with higher accuracy, and ensure they’re one step ahead in the ever-evolving financial landscape.

Casper Skern Wilstrup CEO and founder, Abzu

“Once investors have a good understanding of these scenarios, they can better tailor their risk mitigating strategies. With traditional methods, the assumption is that asset dependencies are the same no matter if it’s an adverse market scenario or not so risk mitigating strategies tend to be biased by this false assumption also,” Vorobets says.

Generative AI models are designed to generate data that resembles real-world data. In portfolio management, they can simulate how different assets might behave under various market conditions, including during financial market turmoil. Vorobets explains that this ability can be instrumental in understanding the potential diversification benefits of various assets - essentially, how different assets might offset each other’s risks.

When managing financial portfolios, having a reliable risk model that reflects reality as closely as possible is imperative. A good risk model can guide decisions to minimize losses from adverse scenarios. Conversely, a flawed or inadequate risk model can lead to underestimating risks, resulting in significant unexpected losses.

Vorobets explains that such considerable losses can trigger a chain reaction in the market. When one major player starts to panic because they’re losing money, other players can interpret this as a signal that something’s amiss, causing them to panic. This snowball effect can escalate, leading to widespread panic and even larger losses across the market.

34

“It’s like the Silicon Valley Bank run, but

selves to outsmart detection systems.

just in financial markets. Hence, better

However, generative AI can actively

risk management should lead to more

generate data similar to real-world sce-

stable and resilient financial markets,” he concludes.

AI outsmarts financial scammers The generative AI also offers a promising approach to fraud detection in financial markets. Traditional fraud detection often relies on pre-defined patterns and reactive measures that come into play after a fraudulent pattern becomes evident. This means the system is always trying to catch up to the newest methods employed by

It’s like the Silicon Valley Bank run, but just in financial markets. Hence, better risk management should lead to more stable and resilient financial markets.

Anton Vorobets CEO and founder, Fortitudo Technologies

narios, simulating countless variations of transactions and identifying potentially suspicious patterns before they become evident.

“It can pinpoint anomalies based on diverse data sources, which may signal fraudulent activities. By doing so, it’s capable of capturing not just known patterns of fraud but also novel patterns which haven’t been explicitly defined,” Wilstrup explains.

Compared to traditional fraud detec-

fraudsters. Moreover, fraudsters are con-

tion mechanisms, the most intriguing

stantly evolving and even using AI them-

facet of generative models and

Anton Vorobets CEO and founder, Fortitudo Technologies

35

transformer technology is their

Taxing automation’s dominance

value-added taxes.”

“intuitive” capability. Wilstrup uses the

Returning to Wilstrup’s opening point:

Wilstrup suggests a rethinking of

analogy of a chess player recognizing

we’re in a time characterized by deep

this structure. By proposing a poten-

patterns on the board. Instead of cal-

shifts due to automation, especially

tial scenario with no income tax and a

culating every possible move, human

its dominance over routine tasks, he

higher value-added tax, wages might

players often rely on their intuition

reflects on the potential to halt this

decrease, making human labour more

based on patterns they’ve seen before.

development.

competitive compared to machines.

“Similarly, generative AI models can

“Since the 1800s, machines and

“This, in turn, could shift the balance

spot transactions that might not match

automation have had a systemic advan-

back to human labour in certain

any known fraud pattern but still raise

tage. By taxing human labour but not

industries, such as service sectors.

suspicion because of some inherent

directly taxing the work of machines,

Adjusting the taxation system could be

characteristics,” he explains.

there’s been an embedded financial

a tool to balance the rapid pace of

This intuitive property of generative

incentive for businesses to prefer auto-

automation and its potential impacts

models, with their capability for pattern

mation,” he says and continues: “While

on employment. It’s certainly a per-

recognition at an abstract level, makes

machines don’t pay taxes in the tradi-

spective that is not discussed enough

them a potential game-changer in the

tional sense, they indirectly contribute

in current debates,” Wilstrup con-

fight against financial fraud.

to the economy through other forms of

cludes.

36

Close development collaboration between BEC and Nykredit has created a completely new ESG universe As customers, our demands for the services we expect are increasing. This also applies to our banking operations. There is a constant demand for new features. Among the trends is that trend sustainability has become a competitive parameter for banks. Therefore, Danish bank customers can now see how their investments perform in terms of ESG.

By Henrik Malmgreen

E

ven though we are no longer in

opment in this area. As one of the first

question then was how we should ap-

Accessibility and democratization

physical contact with our bank

deliveries we have developed a solution

proach the situation and how we could

This resulted in a development project

or bank advisor as often as

– a so-called ESG score - that allows

not only match but also surpass our

based on customer wishes for new

before, it doesn’t mean that we

customers in Danish banks, through

colleagues in the industry. In principle,

features, and according to Tonny Thi-

can settle for less service. On the con-

their mobile banking solution, to see

we knew where we wanted to go when

erry Andersen, ESG and sustainability

trary. Both individuals and companies

how their investments perform in terms

it came to the new functionality in our

will bring significant change in the fi-

expect not only more service but also

of ESG, Environment, Social, and Gover-

mobile bank, but at the same time, we

nancial sector in the coming years. Not

more specialized and customer-specific

nance. The solution is the first of its kind

had to ensure an agile organizational

just because customers want it, but

service. The competition for customer

in Denmark, several banks have already

structure whose primary purpose was

also because the business world con-

favor has simply shifted from physical

started using the new feature, and Lars

to support the new features,” explains

tinually faces new requirements when

bank branches to digital ones. This is

Malmberg expects that more banks will

Tonny Thierry Andersen.

a company needs to demonstrate

evident at the Danish IT company BEC

join in a relatively short period.

Financial Technologies, which develops

Møns Bank, a smaller Danish bank in

sustainable behavior. We can mention

the BEC ‘community’, was also among

the new EU taxonomy, a classification

solutions for Danish financial institutions.

ESG as a competitive parameter

the very first to introduce the new ESG

system for economic activities that

Deputy CEO Lars Malmberg is confident

Tonny Thierry Andersen, member of the

score to their customers:

qualify as climate and environmentally

when he studies the feedback from the

Executive Board and Head of Banking

“If you wish to change the world to-

sustainable, the equally new CSRD

17 banks in the BEC community.

at Nykredit, explains that in their daily

wards the better, you need to start some-

directive (Corporate Sustainability

“Customers are continually de-

interactions with customers, they have

where, and that could very well be by

Reporting Directive), and the so-called

manding more from their bank and

experienced general satisfaction with

looking at how your investment portfolio

ESRS standards (European Sustainabil-

the services it can offer. We have seen

Nykredit’s mobile banking solution.

can contribute to push towards sustain-

ity Reporting Standards), which set out

this very concretely in connection with

However, there was a need to improve

able development. With this new tool

specific reporting requirements.

the increased focus on sustainability in

functionality in the investment area.

we support our customers do that – this

“But our private customers also care

recent years. This has led us, in close

“Market dynamics meant that we

is very much in line with the trends and

about sustainability, and therefore it is

collaboration with one of our member

not only wanted to improve in this area

interests among banking customers”Per

important that ESG is not just for the elite.

banks, Nykredit, to speed up devel-

but also, to do it relatively quickly. The

Sjørup Christiansen, CEO Møns Bank.

There needs to be a democratization

37

steering groups and various working

emerging as rapidly as mushrooms in a

groups, paves the way for future devel-

damp forest floor. According to Lars

opment projects. Not only between BEC

Malmberg, they are in constant dialogue

and Nykredit but also between differ-

with several of these startups, and he has

ent actors in the financial sector. These

no doubt that solutions from external

collaborations will largely be built on

partners will eventually be integrated into

partnerships, where transparency in both

BEC’s platform architecture. So, the

data and architecture is a necessity.

development collaboration between BEC

Both Lars Malmberg and Tonny

and Nykredit has in several ways helped

Thierry Andersen see significant

shape the future of coming develop-

opportunities in the interaction between

ment collaborations, where develop-

established actors in the financial sector

ment and business strategy merge in

and the FinTech startups that are

an agile environment.

How the ESG Score Works

“In the future, I’m confident that we’ll collaborate with a number of exciting companies from the FinTech environment when developing new solutions. Partnerships are the way forward for BEC – it’s at the core of our strategy, and for that reason, we’re proud to be engaged with Nordic FinTech, which can drive inspiration and foster partnerships in the Fintech industry in general.,” says Deputy CEO Lars Malmberg from BEC Financial Technologies. process, and that is best supported

and their customers to use digital

by making the information accessible

solutions, especially because artificial

in an easy and simple way, including by

intelligence will shape the future.

adding the new features to our mobile

“Artificial intelligence is a mega-trend

banking solution. That’s where the cus-

that will redefine many of the solutions

tomers are, and it’s where most inter-

we need to develop in the future. They

actions take place, so it wouldn’t make

are becoming more and more sophis-

much sense to develop an app that

ticated, which essentially means that

might just gather dust in a corner of the

we need as many as possible on the

smartphone. We need to meet cus-

technology wagon, simply to ensure

tomers at eye level,” elaborates Tonny

that the solutions are actually used. At

Thierry Andersen, and he is confident

the same time, however, it’s important

that this development collaboration is

that users find the solutions we develop

not the last.

to be good, and therefore it’s important

BEC a major Danish IT provider, delivering IT to Danish banks and approximately 25% of Danish bank customers have their main banking relationship with a BEC financial institution. The new ESG score can be used by bank customers in both mobile and online banking, as well as by the financial institutions’ investment advisors in their interactions with customers, depending on how the individual financial institutions use the solution. With the new solution, customers can directly see an ESG score for each individual investment product they have invested in, including stocks, bonds, and investment funds.

Customers also receive ESG scores for their overall investments and sub-portfolios. The ESG score is developed by the globally recognized MSCI ESG Rating, which analyzes over 8,500 companies and 680,000 investment products worldwide. By comparing MSCI ESG ratings, investors and stakeholders can gain insight into how different companies perform in terms of sustainability-related metrics. A higher ESG rating indicates that a company performs better in these areas and incorporates sustainability into their business focus.

that we constantly focus on the good Many more development projects

customer experience as we extend

In addition to increased functionality in

technology collaboration to areas be-

mobile banking, experience has been

yond ESG,” says Lars Malmberg.

gained in form of new ways of collaboration and the team spirit and energy

Great opportunities for the

in this that can be used in other con-

FinTech environment

texts. Lars Malmberg from BEC agrees

He further emphasizes the importance

with this view. He expresses that this

of customers having trust in the solutions

contributes to a framework on how we

being developed, which is also high-

can make more frequent deliveries

lighted by Tonny Thierry Andersen from

to customers when desires for new

Nykredit. The very close development

functionality arise. On a more general

collaboration between BEC and Nykred-

level, he states that BEC has a soci-

it, which has meant that employees

etal responsibility to educate banks

have been at BEC, participating in both

“As we encounter new user requirements, it’s crucial to think about partnerships, and in that respect, I think BEC has been quite innovative and has made it easy for us to integrate the new ESG features into our mobile banking. We will see more and more partnerships, which will also be necessary to accelerate the power of innovation,” says Tonny Thierry Andersen, member of the Executive Board and Head of Banking at Nykredit.

38

This led Telesign to offer innovative solutions to prevent unauthorized access to phones. “We now offer services for SIM Swap Detection and Porting Status, which detects if and when a phone number may be subject to an elevated takeover risk. Our goal is to help businesses determine if their users are falling victim to social engineering tactics during these incidents,” states Lambert.

Telesign is developing industry-leading technologies to better detect and prevent fraud across the customer journey, ensuring end-to-end account security. Specifically, they’ve progressed from providing OTPs solely through

SECURING THE DIGITAL ECONOMY: TELESIGN’S COMMITMENT TO ONLINE IDENTITY PROTECTION Fortify digital experiences with Telesign’s customer identity and engagement solutions for Continuous TrustTM.

SMS to offering verification methods across multiple channels. They aim to meet users where they prefer to interact, even going so far as to ensure that verification occurs seamlessly in the background, requiring no additional effort from users.

“Our offering stands out from our competitors due to the exclusive nature of the data we use. This data is sourced exclusively from our network. By analysing this data, we can provide insights based on the traffic patterns across our extensive network. Also, with the latest technological developments, we can now analyse billions of transactions,” adds Lambert.

Prioritizing Compliance for Building Customer Trust Catering to a diverse, global customer base, Telesign adeptly manages the complexities posed by worldwide markets, regulations, and cultural differences. Their wealth of experience in markets across the globe sets them apart in terms of customer service.

By Marria Qibtia Sikandar Nagra

T

“Our dedicated team of customer and carrier service managers brings a ton tion solutions. We help the world’s larg-

Harnessing Network Data for

of expertise to the table. Additionally,

of cybercriminals and the

est brands secure onboarding, maintain

Actionable Insights

our early global presence and collab-

proliferation of new hacking

account integrity, prevent fraud, and

Telesign offers a distinctive technology

orations with international companies

techniques spell danger

streamline omnichannel engagement,

solution that analyses the behaviours

have equipped us to expertly navigate

for businesses and individuals alike,

to make the internet a safer place,” said

associated with phone numbers. Initially,

the intricacies of diverse cultures and

putting digital identities at risk. But with

Lee Lambert, business development

their primary objective was to assist cus-

countries,” said Lambert.

Telesign’s rapid identity verification,

director at Telesign.

tomers in safeguarding their consumers

he growing sophistication

Telesign’s ultimate goal is to offer

companies and their customers can

by implementing one-time passcodes

exceptional support for clients

easily safeguard their security and

(OTPs) for authorization and verification

throughout their journey and build

digital interactions—and protect them-

purposes. However, as this technology

lasting trust by meeting customer

selves against unauthorized account

became widespread, malicious actors

needs promptly and efficiently. This

became more adept at tricking people

commitment also extends to maintain-

into divulging their passcodes or inter-

ing strict adherence to the regulatory

cepting them through social engineer-

requirements governing their opera-

ing techniques.

tions across disparate industries.

takeovers.

“We offer developer-friendly APIs that provide user verification, digital identity, and omnichannel communica-

Lee Lambert Business development director, Telesign

39

Jeppe Kirke Bonde

of it, when you use CopyTrader, you

and property shares. However, despite

are making a new type of investment

the diversification, he sees one theme

decision. Instead of analyzing and

that will shape the stock market: artificial

researching various companies, you are

intelligence — or AI.

evaluating various investors to see who

“AI is one of the biggest themes — for

fits best with your investment goals.

the companies that want to make money

In deciding whom to copy, you

from providing services within artificial

can see an investor’s strategy in their

intelligence, but also the companies that

profile, you can also view their risk

want to make money from using the

score, current portfolio make-up,

technology,” says Jeppe Kirk Bonde.

past performance broken down into months and years, number of copiers,

How Jeppe views Nvidia

followers, assets under copy (AUC),

After explaining his strategy in theo-

check out their feed posts and even

retical terms, Jeppe gives an example

ask them questions. After analyzing

of how he implements it with the well

all of the information, it is your job to

known company, Nvidia. This company

figure out which investor best aligns

has become the symbol of this year’s

with your investment objectives and

AI boom, and is a stock that has been a

how much money you are willing to

fixture in Jeppe Kirk Bonde’s portfolio in

invest with them.

recent years. Recently, however, he sold his shares in the company.

Jeppe’s strategy Jeppe Kirk Bonde believes there is a

CopyTrader: A new era in investing Meet Jeppe Kirke Bonde, the most copied trader on eToro and get a glimpse of eToro’s innovative CopyTrader feature.

By eToro

E

Why? According to Jeppe, Nvidia’s valuation

formula for beating the market. He be-

has become overly optimistic. “A large

lieves in researching companies down

part of the value lies in the low probabil-

to the smallest detail and diversifying

ity that a huge amount of value will be

investments. Fundamental analysis is

created. Now Nvidia is not just priced

a key tool when you want to find the

to be a healthy company that makes

undervalued stocks.

chipsets. The price is based on the fact

“Too many investors end up looking

that Nvidia is a company with the smart-

at how the last quarter has been for

est engineers in the world, who work

the companies and predicting what

with the most exciting technology.”

will happen to interest rates, instead of

Jeppe Kirk Bonde warns that there

diving into the companies and under-

is a risk that others will win with the

standing them,” says Jeppe Kirk Bonde.

medal. He, therefore, prefers to look at

He has an insatiable desire for knowl-

companies that already have a healthy

edge and is willing to spend days on in-

core business, but have the resources

depth research. His process for choos-

to develop the solid AI solutions that will

ing companies can take about a month

be the winners.

where he sifts through numerous data using certain criteria before settling on

It’s about being smart

which companies to invest in.

CopyTrader adds another investing

“For me, it’s about what return a share

dimension to the many trading options

can deliver throughout its `lifetime’. What

and tools offered by eToro. It allows

are the companies ultimately worth?

you to benefit from the wisdom and

What do their strategic options, com-

experience of thousands of investors,

petitive situation, culture and manage-

and you have numerous tools to make

very time Jeppe Kirk Bonde

consider copying Jeppe in the first

ment look like? Next, I look at what they

an informed decision. Nonetheless, re-

makes an investment, more

place? Was it easy to foresee that some-

earn now and what they will earn in the

member that when you copy someone,

than 22,000 people all over the

one would have such a track record a

future. If the situation changes, I will sell

be smart about it, find the person that

world are automatically making

decade ago? These questions and more

the share,” says Jeppe Kirk Bonde.

best fits your investment goals.

the same investment. Jeppe is the most

go to the heart of the unique CopyTradJeppe’s portfolio

investor, just by looking at other

and has approximately $70 million of

Currently, Jeppe Kirk Bonde owns shares

people’s profiles with a profitable track

assets under copy (AUC).

record you become smarter. You see

copied investor on the eToro platform

ing feature that eToro offers.

Even if you choose not to copy an

Another way to invest

in 60 companies across a wide range of

Jeppe’s track record over time has le-

eToro’s CopyTrader feature gives you

sectors. The portfolio contains everything

the companies they invest in, their

gitimately earned him tens of thousands

another way to invest. Whether as part

from technology, banking and health-

strategy, their posts and you become a

of copiers. But, why would someone

of a traditional portfolio or in place

care shares to energy, raw materials

more informed investor.

Disclaimer: Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

40

Open Banking Takes the Wheel: Neonomics and Spense Supercharge Automotive Payments Integrating Neonomics’ open banking payment solution into Spense’s services offers the end user a seamless and cost-efficient payment experience.

The solution has proven to benefit both businesses and consumers when compared to traditional payment models. “With a traditional car purchase, the seller relies on a bank transfer to be made. When such a purchase is made through traditional online banking, the seller does not hold tracking of the payment, leading to potential errors throughout that process, which can also be time-consuming for both the seller and the buyer,” adds Andvig.

“With open banking, payments of large amounts can be handled seamlessly in a faster and more cost-efficient way for businesses and perform the rest of their communication with the car seller. Ultimately, this gives the seller and buyer full tracking ability of the payment.”

Streamlined Transactions At the heart of Spense’s payment solution development is a firm commitment to user experience. They understand the way in which customers interact during the payment process can directly impact their satisfaction and overall perception of their customers’

By Marria Qibtia Sikandar Nagra

T

services. Therefore, they’re dedicated to eliminating unnecessary complexi-

echnological advancements

open banking technology. Neonomics,

demands of the modern consumers.”

ties in order to complete transactions.

propelled by shifting consum-

a provider of open banking solutions,

Spense has to date built an impressive

“User experience is a cornerstone of

er expectations are driving

and Spense, an innovative player in the

customer and partner base including

our payment solution development.

significant transformation in

field offering financial solutions for the

Porsche, Skoda, and Cupra.

We prioritize creating intuitive and

the automotive industry. Within this

automotive sector, are joining forces

dynamic landscape, one area that pres-

to revolutionize the way payments are

Elevated Customer Experience

tomers,” shares Lisgård. “By providing

ents immense potential for improve-

made for high-value transactions such

With Neonomics Pay-from-Account

advanced open banking technology

ment is the user journey. If we look at it

as purchasing cars and settling auto-

feature, Spense has broadened its range

that streamlines transactions and offers

motive repair bills.

of customer journey options, in which

real-time tracking, we are delivering a

customers can easily conduct direct

more efficient, secure, and user-friend-

in the realm of payments, open banking is quickly mobilizing as a disruptor in

“We envision a transformative future

seamless experiences for our cus-

the payments industry offering a more

for open banking in the automotive

account-to-account payments using

ly payment experience, aligning with

seamless, secure and cost-efficient way

sector, marked by seamless and secure

BankID or other authentication methods

our commitment to elevate customer

for businesses and users to complete

transactions,” says Jonas Lisgård,

without leaving their web browser.

satisfaction continually.”

transactions, compared to card pay-

Founder of Spense. “As a forward-lean-

ments or manual bank transfers.

“The foremost advantages are the

ing company, Spense envisions that

time saved through real-time payment

A promising future

“With the increase of automotive

open banking payments will become

tracking, enhancing transparency and

As open banking is slated to become a

companies moving their purchase

one of the most popular choices for

reducing uncertainties,” adds Lisgård.

cornerstone of payment processes in

experience into online channels,

conducting financial transactions in the

“This solution provides streamlined

the automotive sector, the way forward

businesses must enable a seamless

automotive industry. Our partnership

transactions, and the convenience of

looks promising. “For Spense and

purchasing process in order to retain

with Neonomics provides the techno-

initiating payments directly from their

Neonomics, this trend presents ample

increased purchasing traffic, increase

logical foundation to offer our custom-

bank accounts. This ensures a seam-

opportunities,” concludes Lisgård. “For

conversion rates and stay competitive

ers a cutting edge and secure payment

less and efficient payment experience

Spense, it means being at the forefront

in the market,” states Christoffer Andvig,

method that aligns with the evolving

for the end user.”

of payment innovation, enhancing customer experiences, and expanding

CEO of Neonomics.

its user base. Neonomics benefits by

This realization forms the collaboration of Norway-based payment solution providers Spense and Neonomics, aiming to streamline open banking payments within the automotive industry by leveraging the capabilities of

Christoffer Andvig CEO, Neonomics

showcasing its technological prowess

Jonas Lisgård Founder, Spense

and expanding its footprint in a rapidly growing industry, further solidifying its position as a key player in the open banking ecosystem.”

41

How Normative is helping businesses lead the way in sustainable finance Normative is on a mission to help businesses track and reduce their carbon emissions, mitigate climate-related risks, and support businesses to succeed in a net-zero economy.

By Marria Qibtia Sikandar Nagra

T

he financial sector is indis-

of the industry, experience working with

gather accurate data on an institution’s

pensable in the transition to

similar businesses, and knowledge of

investments,” remarks Dr. Schmidt.

a net-zero economy. Accord-

best practices. Their experts guide finan-

This is where Normative’s product

cial institutions from the initial data col-

and expert guidance come through

“The net-zero transition: What it would

lection phase, to determining a baseline,

in helping companies comprehend

cost, what it could bring,” about $275

setting climate targets, and planning re-

regulatory frameworks and intelligently

trillion must be allocated by 2050 for

duction initiatives, and through the value

automate the screening of financed

this transition. This mandates efficient

chain engagement required to reach

emissions. A case in point is Zurich

direction of funds towards the right

net zero. Also, Normative continues to

Insurance Group, where Normative is

technologies and businesses to enable

expands its offerings for the financial

helping it drive sustainability through-

net-zero transition. However, a lack of

sector, recently launching a new product

out its supply chain. “They have set

access to data makes this hard since

release for venture capital firms, private

targets to ensure that 75% of their man-

data provides transparency and guides

equity companies, and other financial

aged procurement spend aligns with

decision-makers in determining where

institutions, automating the process of

science-based targets for emissions

investments should be directed.

calculating financed emissions.

reduction by 2030. To support their

ing to the McKinsey study

This is where carbon accounting

suppliers in achieving these targets,

becomes crucial “it provides businesses

Driving sustainable finance

Normative offers automated carbon

and financial institutions with a compre-

Normative helps financial institutions

calculations to Zurich’s suppliers to

hensive overview of their greenhouse gas

and other large enterprises go beyond

assess their progress. Suppliers can

emissions, reveals carbon-related risks

mere carbon emission tracking by

then craft their own net-zero strategy

in their portfolios and investments, and

providing comprehensive support in

and set Science-Based Targets. This

empowers them to track their emissions

developing effective sustainability strat-

not only enhances their reputation but

reduction progress. With the insights

egies. “Essentially, there are two key

also demonstrates their commitment to

gained from transparent, comprehensive

challenges that companies face when

sustainability,” adds Dr. Schmidt.

carbon accounting, organizations can

it comes to embarking on the path to-

make informed decisions to support the

wards sustainability. The first challenge

Ensuring regulatory compliance

net-zero transition”, shares Dr. Alexander

is to understand the intricate landscape

Addressing the complexities of the

Schmidt, Head of Science, Sustainability

of regulations, regional variations, and

sustainability space is crucial, especially

and Climate Research at Normative, a

standards. This understanding is vital,

considering the rapid evolution of

leading carbon accounting engine.

particularly in the realm of carbon

regulations and standards. Normative has

that we have the latest scientifically

accounting, where methodological

experts across the company who

vetted and transparent emission factors

guidance is much needed. The sec-

contribute to tackling these challenges.

available in our software. Lastly, we have

advisory services

ond challenge revolves around data,

“At the forefront, we have our climate

the science, sustainability, and climate

Normative presents a seamless in-

specifically related to financed emis-

strategy advisors who monitor potential

research team that stays closely con-

tersection of software and advisory

sions. This data is not readily available

changes to accounting standards and

nected with regulators, academia, and

services through carbon accounting

within a company’s system and requires

industry-specific requirements. They

NGOs. Our goal is to not only stay

solutions. They have dedicated climate

active efforts to make carbon emissions

ensure that customers are well-informed

updated on regulatory developments but

strategy advisors for each account spe-

transparent. And since financed emis-

and supported in their sustainability

also contribute to streamlining and

cializing in specific sectors. This means

sions can be 700 times larger than the

efforts. In the background we have

consolidating the industry by advocating

that the financial services industry advi-

emissions from a financial institution’s

sustainability engineers who work with

for comparable and consistent stan-

sors are assigned with deep knowledge

own operations, there is a dire need to

our emission factor databases, ensuring

dards,” concludes Dr. Schmidt.

Synergistic intersection of software and

Dr. Alexander Schmidt, Head of Science, Sustainability and Climate Research at Normative

42

Banking’s Evolution: Real Innovation or Illusion?

The dream of open banking shaking up the crusty old banking world hasn’t quite matched the hype. While the traditional banking giants drag their feet, stumbling through the maze of innovation, tech-savvy newcomers are swooping in, offering the underbanked a glimmer of hope.

As the saga unfolds, it’s clear: for banks, it’s evolve or risk becoming obsolete.

By Jakob Frier

43

A

istorically, bankers held substantial influence over various financial determinations. Their judgments

on loan approvals, interest rates, and terms often revolved around subjective evaluations, personal connections, and bank-focused standards.

Open banking emerged as a ground-

breaking idea, anticipated to transform the banking sector through intensified competition, nurturing of innovation, and the empowerment of consumers.

With the advent of third-party integration in consumer banking and the surge of digital platforms, the previously unchallenged centralized control of bankers was poised to be contested by fresh entrants and a merging of industries. However, the reality hasn’t precisely mirrored these expectations, according to Jóhannes Ágústarson, product manager for Open Banking at Íslandsbanki: “Much of it has been hype or overly optimistic anticipations. However, it’s clear that the landscape is still evolving, and we’re in the process of identifying viable business models.”

Jóhannes Ágústarson Product manager for Open Banking, Íslandsbanki

Ágústarson does view open banking as a domain with immense potential, not limited to traditional fintech partners. He recognizes the challenges in finding the right business models and

consumers due to the rise of digital

It’s about reimagining how various finan-

partnerships, emphasizing the involve-

platforms and the spread of API’s.

cial services and technologies converge

“One of the most profound changes

to serve the modern consumer. It’s often

is how technology has empowered the

not about creating entirely new innova-

The bank has had conversations

average consumer. They are no longer

tions but combining existing things in

with major retailers, conglomerates,

at the mercy of a select few bankers

new ways,” she explains.

and even gas station chains, pondering

or restricted by the limited offerings of

their role in facilitating open banking.

their local banks. With online plat-

fresh perspective, especially in bank-

A significant driving force is the intent

forms, they have a plethora of choices

ing. They aren’t restricted to traditional

to lessen reliance on card networks,

at their fingertips,” says Sarah Häger,

banking viewpoints.

which might also lead to cost savings.

CCO at Enable Banking.

ment of non-financial organizations in this new ecosystem.

For customers, this approach offers a

“Consumers may soon approach

“It’s not just about that; it’s about

Häger believes that true innovation

banking from a perspective driven by

enhancing the user experience and

arises from the combination of existing

their shopping habits or lifestyle needs,”

the wealth of information it provides.

elements. Using the analogy of how

Häger observes, and continues:

There are opportunities, but the killer

Apple combined the functionalities of

“This phenomenon isn’t new. Think

application is still not with us. Yet,”

different devices to create new products

of credit cards offered by retailers. I’m

Ágústarson says.

like the Apple Watch or the iPad, she

not looking for a credit card, I’m looking

emphasizes that merging various inter-

to optimize my finances or to make

Empowering customers

faces, competences, and technologies

secure transactions so that I can get

Regardless the doubts of open banking,

can birth unprecedented innovations.

my money back if there’s a fraudulent

technology has had a significant impact

“The first generations of an iPhone

payment. However, the scale at which

on the banking industry, bringing about

weren’t just a phone; it combined a

non-financial entities, from tech giants to

monumental changes. Among the

camera, GPS, music player, and more to

e-commerce platforms, are entering the

most notable of these changes is the

redefine smartphones. Similarly, open

banking sector through open banking is

empowerment of everyday banking

banking isn’t just about opening up data.

unparalleled,” Häger says.

44

Sarah Häger CCO, Enable Banking

An opportunity for the underbanked

when it comes to low-value transactions

“It went into the absurdum, where I

One of the intriguing prospects emerg-

that don’t warrant manual approvals and

escalated my case internally where I was

ing from open banking is the concept

highlights Danish Moneyflow as a good

handed an exemption when I explained

of alternative credit scoring. It presents

example of a startup that has managed

the story. But that was just because I was

potential opportunities, especially for the

to capitalize on the underbanked seg-

employed by the bank. Imagine every-

underbanked – those who are stuck in a

ment thanks to PSD2.

one else moving across the countries not

catch-22 situation: they can’t get credit because they don’t have a credit history,

Häger shares her personal experience with the challenges of being under-

being able to,” Häger says.

With PSD2, new platforms can assess

and they can’t build a credit history

banked, emphasizing the limitations of

a person’s creditworthiness based on

because they can’t get credit.

traditional banking systems in assessing

their financial behavior in another coun-

creditworthiness across borders.

try. But this is something most traditional

“The model could offer a middle ground, in contrast to the other ex-

Sarah moved from Germany to Swe-

treme of predatory lending, such as

den while being employed for 8 years

microfinancing that lends to almost

in total by the same bank. Upon her

to credit assessment can help newcom-

everyone but hikes up interest rates and

return to Sweden, despite her continu-

ers or individuals who frequently move

aggressively pursues repayments,” says

ous employment, she faced challenges

between countries. Residents in the

Ágústarson.

in obtaining a credit card because she

Öresundsregionen, where Swedes and

He also points to the fact that many

lacked a local credit history. This shows

Danes live and work across borders, as

SMEs might be underserved because

that even someone with a steady job

well as between Norwegians and Swedes

traditional banking models might not

at a bank can face challenges due to

also encounter these issues due to their

cater to their unique needs, especially

systemic limitations.

cross-border movements,” says Häger.

banks are not able to offer yet.

“A more flexible and inclusive approach

45

Partnerships beyond PSD2 VHow do established banks navigate

and owning the customer journey from

technical infrastructure with identity

start to finish.

features, APIs, and security. We’re also

“With the rise digitalisation and new

focusing on developing partnerships

technology, and what holds them back?

fintech ventures, banks are transitioning

with lower-risk entities that offer clear

Häger points out, traditional banks

from this direct ownership model to

benefits,” Ágústarson says.

often face challenges adapting to these

more of a partnership or “partner sales”

Ágústarson recognizes the sig-

innovative systems:

approach. This new model is something

nificance of Europe’s PSD2 in open

many banks are grappling with as they’re

banking but stresses the broader

not accustomed to it,” she argues.

potential of open finance. He believes

the evolving landscape of financial

“Banks typically take a long time to make decisions because they want to ensure they don’t commit any major

This decentralization of power is

there’s valuable data and functionalities

errors. A significant mistake could result

causing a significant change in the

outside the realm of PSD2, including

in a monetary penalty from the FSA

banking industry’s structure and envi-

processes like loan origination and

or ultimately result in a bank losing its

ronment, making it more competitive

digital identification.

license, effectively ending its business

and challenging.

operations.”

Häger believes that the naturally risk-

“From our perspective, leaning solely

Ágústarson acknowledges that com-

on standardized interfaces could push

petition has been looming and that many

us towards commoditization, diminish-

averse nature of banks makes them

banks are observing what competitors

ing our unique edge. Thus, we champi-

slower in adopting and benefiting from

and newcomers in the industry are doing.

on the idea of cultivating select

innovations like open banking. Tradi-

“It is risky, as you might fall behind.

partnerships, placing a premium on

tional banks once held the lion’s share

Therefore, we’re working to strengthen

bespoke solutions rather than generic

of power and customer relationships,

our foundation by establishing a robust

ones,” he concludes.

46

Bridging Markets for Inclusive Finance: Inpay’s Approach to Financial Empowerment Everyone deserves the opportunity to participate in a global economy beyond their own borders.

By Marria Qibtia Sikandar Nagra

I

n an increasingly interconnected

completion rate than many of our com-

Building trust through compliance

and globalized world, the impor-

petitors. Today, we complete more than

Inpay recognizes the critical role of

tance of access to financial services

99% of payments for our customers,”

regulatory compliance in building trust

on a democratic basis cannot be

adds Jul.

and fostering transparency, especially in underserved markets. These markets

overstated. This is where Inpay’s global payments network comes through

Serving underserved markets

often face higher risks of financial fraud

and catalyzes financial inclusion by

Offering a tailored set of capabilities to

and money laundering due to a lack

breaking down barriers and connect-

cater to the diverse needs of its clients,

of consumer protection measures. So,

ing financially advanced markets with

whether it is A2A (Account to Account)

Inpay strives to offer a robust regula-

underserved regions.

transfers, digital payment solutions, or

tory framework that goes above and

“We seek to democratize money

cash remittance services, Inpay stands

beyond the standard requirements.

transfers on a global scale by making

as a market-leading payout provider,

Their goal is to set clear standards for

them faster, easier, more secure, and

offering exactly the right global reach to

compliance, risk management, and

transparent. This is the core of our

penetrate markets that are traditionally

customer protection to eliminate cases

mission. By making payments acces-

challenging to enter. It acknowledg-

of financial scams.

sible, we empower individuals and

es the immense potential that exists

Their operations are regulated by the

businesses to participate fully in the

in these markets. So, by establishing

Danish Financial Supervisory Authority.

global economy. This approach aligns

partnerships and leveraging its net-

“Obtaining a Danish license is significant

with our belief that everyone with good

work, it enables its clients to navigate

for us. It demonstrates our commitment

intentions should have equal access

regulatory complexities, overcome

to operate within a highly regulated

to financial services, regardless of their

logistical hurdles, and access previous-

framework and provides us with a

background or location,” shares Thomas

ly untapped market bases.

trusted regulatory body to collaborate

“The main focus of our business is

with,” shares Jul. Hence, compliance

While traditional banks may suffice

addressing these kinds of challenges.

with KYC (Know Your Customer) and

for many, when transactions involve

While many others may find them too

AML (Anti-Money Laundering) regula-

moving out of SEPA or dealing with

complicated, we thrive on solving them.

tions are integral to their core opera-

complex scenarios, Inpay emerges

We have worked, for example, with a

tions as well as built into the core

as a far superior solution, providing

financial institution in the Middle East that

technology at Inpay to ensure that it

speed, security, and transparency. “Our

needed to transfer funds into harder-

cannot be circumvented. “Our risk and

solutions ensure that money transfers

to-reach parts of Asia on behalf of their

compliance department plays a critical

are transparent to the parties involved

customers. And we are working with the

role in overseeing these aspects,

in the transaction, and we ensure

Danish Red Cross, to address the high

supported by a three-layer approach.

affordability by minimizing the num-

costs and complexities of sending money

We put meticulous risk management,

ber of intermediaries in the chain. Our

into Myanmar. With us, they were able to

transparency, and robust regulatory

onboarding process may be thorough

reduce costs and simplify the payment

processes at the very heart of every-

but guarantees stability and a higher

process significantly.” shares Jul.

thing we do.” concludes Jul.

Jul, CEO of Inpay.

Thomas Jul, CEO of Inpay

47

How Payment Cards Enable Equality, Empowerment, and Scientific Innovation Payment cards play a significant role in promoting financial inclusivity and fostering empowerment. Enfuce, a payment card issuer and full-service payment solutions provider from Finland, recently executed three projects that illustrate the power for good that a comprehensive payment solution and card issuing service can bring to the table.

By Paulo Delgado Finnish Government promotes

Welcome Place

founded by a group of scientists who

inclusivity with cards

aids refugees in

recognized that many small amounts

The first of these projects was with the

France

can add up to significant contributions.

Finnish state treasury, which disburses

In a remarkable

Science Card uses a simple consumer

demonstration of

card but lets users choose science

agility, Enfuce, in

projects they’re passionate about and

Monika Liikamaa

collaboration with

round up their payments as contribu-

Visa, managed to

tions to these projects.

Co-founder and co-CEO, Enfuce

conceptualize and

The team behind Science Card has

distribute a “First

partnered with leading UK universities

Aid Card” in under

and ensures all projects it funds have

approximately 16 billion euros annually.

The Treasury opted for a more efficient system with Enfuce, choosing digital disbursements through the use of cards over traditional methods.

The project spanned several governmental departments, including

When we started Enfuce, our aim was more than just business—it was to make a positive impact.

Now, seven years in, we’re realising that vision.

six weeks. This initiative, undertaken with

been peer-reviewed by its panel of 200

Welcome Place—a French neobank

scientific researchers. All projects are

established by an Iranian refugee—en-

also aligned with the UN’s 17 Sustainable

potential abuse, while standing in lines

abled immediate relief for Ukrainian

Development Goals.

for handouts can also feel degrading

from friends or relatives. But Enfuce’s

refugees in Paris.

and dehumanizing.

fine-tuned payment control systems

the immigration unit, which provides relief for refugees. Issuing cash in such circumstances opens the door wide to

Monika Liikamaa Co-founder and co-CEO of Enfuce

The task wasn’t small. Some of the

Niche use cases with

“It’s about inclusivity and remov-

can block ATM withdrawals or even

complexities included translating

significant impact

ing stigmas,” says Monika Liikamaa,

limit the cards to spending in specific

terms and conditions into English and

The recent Enfuce use cases showcase

co-founder and co-CEO of Enfuce.

categories. For example, one card they

Ukrainian, as well as instructions on

how payment companies can make a

“Previously, recipients of government

issued was the “Pharmacy Card,” which

how to use the cards.

direct difference. But they also demon-

aid were identifiable and often margin-

can only be used at pharmacies, en-

“Everyone pulled long hours; every-

strate how implementing digital payment

alized.” With the new cards, recipients

suring the funds are spent on essential

one came together,” Liikamaa says. “We

solutions addresses the broader issue of

can now pay for groceries like everyone

medical needs only.

all had the focus and the purpose to pull

how a cash-based society will continue to

it off, and we did.” The project was com-

be vulnerable to misuse and exploitation.

else because the cards are accepted

“It’s hard for some of us to under-

at any point of sale, fostering a sense of

stand the pressure some of these

pleted just in time for the holiday season

Enfuce’s payment technology stands as

normalcy and dignity for them.”

people receive to give away their relief

and is now an ongoing action in France.

a direct defense of these vulnerabilities.

Cash also lends itself to abuses. No

“When we started Enfuce, our aim was

aid,” Liikamaa says. “By implementing

guarantee exists that the cash won’t

comprehensive controls, we empower

Science Card funds the future

more than just business—it was to make a

be used to fund vices or assist mon-

the recipient to use their funds for what

Another groundbreaking initiative is

positive impact,” says Liikamaa. “Now,

ey-mule activities due to pressure

they need to survive.”

the UK-based Science Card startup,

seven years in, we’re realizing that vision.”

48

BNPL Boom: A Financial Revolution or a Debt Trap The rise of “Buy Now, Pay Later” services presents a double-edged sword, offering convenience and flexibility but also potentially fostering impulsive buying habits and financial missteps. While companies like Klarna emphasize responsible lending and challenge traditional high-interest credit cards, concerns about consumer overreach and the normalization of debt, especially among the young, remain prevalent.

By Jakob Frier

I

t’s easier than ever before to spend

high-interest credit cards, and it creates

over, it suggests that many consumers

money you have.

superior products and services for

might not fully consider the implica-

consumers, ultimately pushing Klarna

tions of committing to these loans,” says

to be better.

Jacob Ruben Hansen, economist at the

The popularity of ‘Buy Now, Pay

Later’ (BNPL) services has surged,

with firms like Klarna, Anyday.io, and ViaBill providing interest-free pay-

“BNPL will benefit consumers over traditional credit cards that put con-

Danish Consumer Council.

According to Hansen, BNPL have

ment options for a wide range of

sumers into revolving debt of up to 40

stimulated a fast and rash deci-

items from associated stores, includ-

per cent interest a month. In the long-

sion-making spending for consumers,

ing everything from mattresses and

term, this is a positive confirmation that

when shopping online. As well as nor-

electronics to sportswear, apparel,

this form of credit is better than credit

malizing debt and having an economy

jewelry, and beyond.

cards that are charging high interest

where income and spending does not

These applications showcase a

rates and that are pushing customers

necessarily match.

plethora of top retail brands tempting

into borrowing more and more,” Erener

you with enticing deals, and the catch:

explains.

ly speaking have been unregulated and without a need for through creditwor-

It also highlights a trend in the

Consumer Council, when inquiring

thiness checks, therefore consumers

financial sector where banks are un-

about regrets after utilizing Buy Now,

who would not be able to loan other

dergoing a transformation.

Pay Later (BNPL) services, 56 per cent of

places have had the possibility to take

those with financial difficulties expressed

a BNPL-loan. That is clearly not sound

selves, and agile tech is moving into this

remorse over a purchase. In contrast,

financial decision-making.”

space. The growth in the sector is not

this sentiment was shared by 24 per cent

surprising. This will be the decade that

of the general consumer base.

“Banks are trying to reinvent them-

the banking industry which has failed

Similarly, when questioning whether

Myths and realities The BNPL model has significantly

consumers, is disrupted,” says Sebnem

BNPL options had prompted individ-

influenced consumer attitudes towards

Erener, managing legal counsel at Klarna.

uals to spend beyond their intended

debt and financial responsibility. This

But does spending with BNPL feel

budget, 56 per cent of those facing

shift has brought about various long-

too easy? And does it encourage

monetary issues admitted to over-

term consequences that need to be

excessive spending among certain

spending, compared to 33 per cent of

closely examined and understood.

consumers, potentially damaging

all respondents.

their credit scores, derailing their financial plans, and resulting in hefty

And that presents some ethical challenges.

“BNPL have especially influenced the attitude towards debt for young people, where we have heard people

“This data underscores the fact that

talking about it as “free money” or did

while BNPL can boost sales for busi-

not think about that they had to pay it

Normalising debt

nesses, it also encourages impulsive

back. The long-term consequences of

Speaking on behalf of Klarna, Erener

buying and potential debt for shoppers

that will be a very irresponsible market,

believes that BNPL is healthier than

who spend beyond their means. More-

where income and spending won’t

fees owed to the loan providers?

Managing legal counsel, Klarna

“This is especially since BNPL broad-

In a 2022 study by the The Danish

Immediate full payment isn’t necessary.

Sebnem Erener

Jacob Ruben Hansen Economist at the Danish Consumer Council

49

match and people must pay back loans from when they were young for the rest of their lives,” says Hansen.

But according to Erener, it is a misconception that BNPL is predominantly popular among the younger population or more vulnerable groups.

The average age of a Klarna customer is 40 years.

“Unlike credit card companies who make their money when people miss a payment, we don’t want people who are unable to pay. We carry out robust eligibility assessments each time someone wants to use Klarna to ensure that we only lend to those who can afford to repay. This means we take a real time view of someone’s financial situation,” Erener says.

According to Erener, Klarna conducts stringent eligibility evaluations every time an individual wishes to utilize their service, ensuring loans are only extended to those capable of repayment.

This approach allows Klarna to gain a real-time perspective on a person’s financial status.

Regulations must safeguard consumers In April, Denmark classified BNPL products as regular loans, requiring credit checks, capping interest rates, and setting loan cost and marketing standards.

The EU’s new Consumer Credit Directive introduces similar creditworthiness and marketing rules, though they vary from Denmark’s.

As a licensed bank, Klarna is used to operating in a regulated environment.

And Erener agrees that providing credit is an activity which absolutely should be regulated.

“Regulators must safeguard consumers by encouraging lower-risk, cost-effective alternatives. Klarna believes this is best achieved by focusing on outcomes—defining goals like reduced complaints or defaults—rather than specific requirements,” she adds.

According to Erener, inadequate banking regulation has the effect of limiting customer mobility, solidifying market barriers, and constraining access to preferable options.

“Rethinking regulatory approaches can break this cycle, fostering an environment where regulation drives positive change. Embracing this vision advances consumer well-being and industry growth through robust regulation.”

According to a 2022 study conducted by the Danish Consumer Council, 56 percent of individuals facing financial difficulties expressed regret about a purchase made using Buy Now, Pay Later (BNPL) services.

In contrast, only 24 percent of the general consumer base shared this sentiment.

50

Fueled by Hunger: How Latvia’s insatiable Appetite for innovation is Transforming its Industries Latvia, a small but fiercely ambitious nation, is on a mission to make a big impact in the world of technology and innovation. In an exclusive interview with Nikita Kazakevics the Director of Innovation and Technology Department at the Investment and Development Agency of Latvia, we delve into the vibrant startup ecosystem, the challenges it faces, and the hunger that fuels its growth.

By Chris Crespo

B

oth the government and en-

mindset and is the unwavering deter-

ogy startup operating in 31 countries,

trepreneurs in this ferociously

mination to compete on a global scale.

that provides data analytics solutions

motivated nation, share an

With a relatively small domestic market,

for banks and lenders, helping financial

insatiable appetite for suc-

Latvian entrepreneurs understand that

institutions make more informed deci-

cess. They are eager to nurture the next

success hinges on creating products

sions and improve their risk manage-

deep-tech unicorn and support innova-

and solutions that can make a mark

ment processes. Mintos, a peer-to-peer

tions that can change the world.

worldwide. “The key, is not just being

lending marketplace that connects

good but being truly amazing” empha-

investors with borrowers from various

The Quest for Excellence

sizes Nikita whose vision and enthusi-

loan originators currently operates in

In this, our third visit in twice as many

asm for things to come is contagious.

several European markets including

months to the Latvian capital Riga,

Several Latvian fintech companies

Latvia, Lithuania, Germany and Poland.

Nordic Fintech Magazine has been

have embodied this mindset fully.

And TWINO Group a financial technolo-

by hooked by Latvia’s entrepreneurial

Nordigen is a Latvian financial technol-

gy company that operates several plat-

51

One of the strategies in motion

Latvia’s hunger for success, combined with its unwavering commitment to innovation and sustainability, paints a promising picture for the future.

is an consistent country branding.

Latvia aims to position itself as a hub for sustainable innovation, a place where groundbreaking solutions are developed regularly. The nation’s representatives worldwide and a dedicated diaspora play a pivotal role in promoting Latvia’s achievements and opportunities.

Tourism to this Baltic Gem is not just about showcasing Latvia’s natural beauty but also about attracting professionals, investors, and entrepreneurs who could be instrumental in the country’s innovation journey. By highlighting the country’s unique selling points, Latvia is drawing attention to its untapped potential. The country has implemented various measures to support startups, including tax incentives, co-financing of employee salaries, and startup visa programs. These initiatives aim to attract and retain talent, ensuring a thriving startup ecosystem.

Latvia’s invitation to the world is powerful and clear: come join a sky-rocketing ecosystem that fosters innovation, sustainability, and growth. The nation seeks to become a global hub for sustainable innovations, welcoming entrepreneurs, startups, and scientists to join them on this exciting journey.

A Vision for the Future The vision for Latvian innovation remains as powerful as ever: to have Latvian technology recognized by the brightest minds worldwide. This ambition extends beyond Earth, with plans to introduce Latvian technology to space exploration.

Latvia is intent in playing a pivotal role in space exploration, aiming to put Latvian technology into the lunar Gateway Expedition. The country is me-

forms in Europe and Asia, including

Estonia and Lithuania. The goal is clear:

thodically working towards this goal,

TWINO, Viventor, and TWINO Ventures

create globally successful products and

showcasing its dedication to pushing

processing roughly €1 million in peer-

services right from the outset.

boundaries and expanding its pres-

to-peer loans every single day.

Latvia’s small market size can be

ence on the global innovation stage.

The Global Mindset with which its

both a blessing and a challenge. While

foremost proponents of Fintech and

it facilitates fast growth and innovation,

with its unwavering commitment to

Entrepreneurship launch new compa-

it also presents hurdles when it comes

innovation and sustainability, paints a

nies is a truly distinct characteristic that

to attracting investment capital and

promising picture for the future. As we are

sets this ambitious nation aside. Accord-

talent. Nikita points out that geopolit-

left with the lingering sense of excitement

ing to Kazakevics, this stems from the

ical factors, such as regional conflicts,

after listening to Nikita’s vision, it is evident

necessity to export their products and

have impacted foreign direct invest-

that Latvia is a star is on the rise, and the

compete with larger markets, a reality

ment. However, Latvia is actively work-

world should be ready to witness its

they share with their Baltic neighbors,

ing to change these perceptions.

unstoppable journey to greatness.

Latvia’s hunger for success, combined

52

Latvian Fintechs to Watch Fintech Latvia Association: Bridging Innovation and Regulation The aim of the Association is to unite the providers of financial services of the fintech sector based on financial technologies in order to ensure the representation and implementation of their interests at the national and international level, promoting sustainable development and growth of the Latvian financial sector. We aim to develop reliable, responsible and longterm industry practices that are positively assessed by consumers and market supervision authorities, while respecting the growth opportunities offered by financial technology companies and non-banking service providers.

FLEXIDEA FLEXIDEA online invoice financing company since 2017. We empower CEE entrepreneurs - sole entrepreneurs, micro, small, and medium companies in Latvia, Poland, Estonia, Lithuania, and beyond, ensuring survival and growth of their businesses. FLEXIDEA funds their customers within 24 hours or less.

FLEXIDEA performs risk scoring based on the probability of default and verifies each invoice with the debtor. That pays off as historically we have seen less than 0.4% of total invoice turnover defaulted.

The Latvian Blockchain Association (LBAA) The Latvian Blockchain Association is setup to facilitate collaboration between all market participants and stakeholders in the Blockchain ecosystem. It is designed to be an effective platform for members to engage with multiple stakeholders to find solutions to issues and to promote best practices in a collaborative, open, and transparent manner. It will represent the blockchain industry, uphold the integrity of its members, and support the building of relationships within the blockchain community, and collaborate with regional and as well as international blockchain organizations. In addition, it will educate, inform and communicate by developing a connected blockchain ecosystem, channeling effective and relevant information among members and externally; foster innovation among Association members and the European Union blockchain ecosystem; accelerate development of blockchain companies operating in or entering into Latvia, and their subsequent integration and acceleration into the Latvian blockchain ecosystem; and represent, align and support common interests by coordinating and catalyzing otherwise individual actions so that the Association can represent the blockchain community.

Crassula Crassula is a leading provider of White Label Banking as a Service (BaaS) software, empowering FinTechs to create neo-banks, integrate financial services, and manage transactions through a single API and low/no-code tools. With access to over 50 financial service providers and a comprehensive back-office suite, Crassula streamlines the FinTech industry and accelerates product launches.

Fintelligence Description of startup: Fintelligence helps financial institutions systematically evaluate customer reputation, thus accelerating the KYC process. We achieve this by gathering and analyzing data about each customer from online sources. This enables institutions to gain clearer insights into customer risks, fostering more informed and improved decision-making.

Indemo Europe’s sole MIFID-licensed real estate crowdfunding platform. We empower retail investors with discounted debt investments (DDI), once exclusive to institutional investors and high-net-worth individuals, revolutionizing income potential. DDI involves purchasing mortgage loans at significant discounts from retail banks when debtors cannot meet payment obligations. Join us in transforming real estate investments.

11xBoosters With two decades of unwavering dedication to the IT industry, we exude confidence in our ability to craft the optimal approach for every project.

Our secret lies in a trifecta of pillars: the knowledge and fervor, the cuttingedge tools, and the sheer beauty inherent in the way we consistently bring these visions to fruition. Our expertise shines brilliantly across a spectrum of pivotal sectors: from the transformative world of blockchain to the dynamic landscapes of FinTech and AI.

Meet them all at Nordic Fintech Week 2023

53

Beyond-One-SizeFits-All

institutions should prioritize under-

While the financial industry often approaches goals-based investing from a technical or mathematical standpoint, InvestSuite contends that addressing the human needs and psychology behind goal pursuit is a true differentiator. This informs the basis of InvestSuite’s recent research on goal-based investing trends in the Nordic region.

longer-term and potentially safer

and preferences. This tailored approach ensures better outcomes and fosters deeper client relationships. “So, for instance, the research also revealed that people in the Emirates prefer short-term investments in contrast to people in Europe where investments are more appealing, Investsuite gleans from this information to offer different investment portfolios tailored to specific horizons and preferences of users in different regions,” highlights Vanhaeren.

They are also focusing on engagement, recognizing that investors

By Marria Qibtia Sikandar Nagra

T

standing each client’s unique needs

appreciate staying involved. “While long-term investors don’t require

he concept of goal-based

Denmark, goals tend to be more general

intends to perform it. They are usually

constant updates, we plan to provide

investing relates closely to

and lacking in specific details. However,

described as ‘if-then’ scenarios. Such

regular news and information on

several of InvestSuite’s solu-

in the Emirates, we observed the

as, ‘If I receive my salary, then I will

portfolios. We may also suggest actions

tions. Be it their Robo Advisor

opposite, with individuals being much

invest 5% of it in my fund’ or ‘If there is

such as opening a portfolio for their

which serves as an accessible stepping

more specific about what they want to

a market correction and stocks are

family or updating their risk profile. We

stone for those seeking automated

accomplish. This disparity presents a

cheaper, then I will put more money

understand that posing too many

investment assistance or their reporting

challenge for European financial

into my investment account’.

questions can lead to user fatigue so

tool, StoryTeller, which provides a hu-

institutions, as vague or otherwise ‘fuzzy’

man touch by presenting a narrative of

goals may hinder progress towards

certain implementation intentions and

portfolio performance and key events,

desired outcomes,” shares Moons.

then sending them cues as opportu-

The findings from this research are

“By getting investors to first commit to

we’re mindful of striking the right balance,” affirms Vanhaeren.

their ultimate vision is to help investors

Another significant finding is on the

nities to react, financial institutions can

integral to InvestSuite’s design process

stay engaged, involved and motivated

time horizon of goals. “More than half of

automate good investment behavior.

influencing both significant and subtle

in their goal pursuits.

the people in the Nordic region ex-

The kind that helps them achieve their

aspects of its platforms. “Research insights even guide us in determining the placement of buttons, such as the

InvestSuite collaborated with Dr. Klaus

pressed uncertainty about their time

goals without too much hassle or need

Harnack, author of ‘The trust mandate’

horizon, with an additional 24% stating

for self-control” reveals Moons.

to embark on comprehensive research

only ballpark estimates of five or ten

by leveraging insights from behavioral

years. Specific dates for achieving goals

Key Implications on InvestSuite’s

which turns out to be considered very

studies to explore the trends in goal-

were rare,” adds Moons. So, when it

vision and strategy

important by users” adds Vanhaeren.

based investing. Conducted across

comes to goal-based investing, it is

Europe, including Denmark, Sweden,

important for financial institutions to

Sven’s research into their solutions to

The Way Forward

Finland, and the United Arab Emirates,

emphasize the importance of defining

continuously improve their solutions and

Looking ahead, InvestSuite has an

this research has yielded valuable

time horizons during the onboarding

offer a more user-friendly and effective

exciting initiative in the works- a

insights from the responses of thou-

process. This would involve encouraging

investment experience for their clients.

goal-based feature in collaboration

sands of participants. Bart Vanhaeren

individuals to consider their time frame

“Unlike other platforms that offer a wide

with Franklin Templeton. This joint

CEO and Co-Founder of InvestSuite and

together with their desired outcomes,

range of 20-30 goals for users to choose

venture, catering to clients in the

Sven Moons, Customer Insights Expert

risk tolerance and other variables, so as

from, InvestSuite aims to offer specific

Middle East, Europe, and the Nordics,

at InvestSuite share some of the key

to help them establish clear objectives.

goals to avoid overwhelming users with

aligns closely with their ongoing research and aims to assist individuals

withdrawal button in an investment app,

InvestSuite is integrating insights from

findings of this research and explain their

The research also explored the

an excessive number of options that

implications on both InvestSuite’s vision

psychological concept of implementa-

may confuse them”, shares Vanhaeren.

in achieving their specified financial

and its offerings.

tion intentions. Forming implementa-

This recent study on goal-based

goals. “Through this partnership, we’re developing a Robo Tracker that allows

tion intentions is a tactic that involves

investing has also highlighted the

Some notable insights from

specifying the behavior one will

importance of personalized strategies

users to set quantifiable goals. The

the Research:

perform in the service of a goal and

for financial institutions. Rather than

Robo Tracker monitors their progress,

the situational context in which one

adopting a one-size-fits-all approach,

provides recommendations if they veer

One notable finding from InvestSuite’s research relates to the specificity of

off track, and offers actionable steps to

investment goals. As per psychological

realign with their goal. It will definitely

theories on goal pursuit, setting specific

provide users with a clear path toward

and challenging goals tends to enhance

Sven Moons

Bart Vanhaeren

their financial objectives, enabling us

task performance, making it easier to

Customer Insights Expert, InvestSuite

CEO and Co-Founder, InvestSuite

to guide them and support them

track progress and stay motivated. “We discovered that in Europe, particularly in

throughout their investment journey,” concludes Vanhaeren.

54

What Does It Mean to Partner as a Startup With Tryg?

Partnering with Tryg’s Innovation Discovery team is a powerful opportunity for Nordic fintechs. Here’s what startups should know before preparing their pitch.

By R. Paulo Delgado

A

lthough the insurance sector

solutions and the API economy, aim-

work-related musculoskeletal disor-

is typically considered the

ing to seamlessly integrate insurance

ders (WMSD).

Fintech laggard, Nordic

into various platforms and products.

insurance giant Tryg A/S

Its purpose is to optimise operations,

saw immediately what value each

doesn’t fit that mould. The company’s

test new technologies, and thereby

could bring to the other, the co-cre-

Nordic Innovation Discovery depart-

drive product development.

ation process led to a recognition

Although neither Tryg nor PRECURE

ment, headed by Line Dalsfort, actively

But innovation isn’t a linear journey. By

that PRECURE’s tech could truly help

explores new trends and product de-

definition, it requires exploring unknown

educate people about how to take

velopment with a seven-year horizon.

territories to discover if they might lead

care of their bodies at work, poten-

Tryg’s partnerships in this space typ-

somewhere. Within the boundaries of

tially leading to higher efficiency and

ically cover the MVP phase only, with

the Tryg brand and the company’s long-

reduced sick days.

the option to proceed further if a clear

term goals, the company is willing to

value proposition exists for both parties.

consider unconventional partnerships to

pensation in the public sector,”

see where they might lead.

Dalsfort tells NFM. “ I saw first-hand

In an interview with NFM, Dalsfort

“My first job was in workers’ com-

One such partnership was a suc-

what damage many years of lifting

cessful co-creation with PRECURE,

things incorrectly can cause to a

a Danish manufacturer of wearables

worker’s body. This project made a

The program’s focus

that collect employee movement and

huge impression on me because I saw

Tryg’s Nordic Innovation Discovery

muscle data to determine if non-opti-

how co-creation can lead to such a

department focuses on embedded

mum patterns exist that could lead to

positive impact.”

sheds light on this program and what Tryg expects of potential partners.

Line Dalsfort Head of Discovery department, Nordic Innovation, Tryg

55

How does Tryg seek new partners?

No set rules exist about how Tryg finds its partners, and the initial approach between the startup and Tryg could originate from either party.

But the company does have set focus areas and targets and, within those boundaries, it looks for startups that might fit those criteria.

Tryg makes sure to be present and visible where those startups might be: For example, regularly visiting Copenhagen Fintech Lab or joining wellknown events such as TechBBQ and Nordic Fintech Week.

What should startups bring to the table?

Aside from the usual requirements of any partnership, such as mutual value and learnings, startups approaching Tryg should be aware of the following two key things: Firstly, Tryg is an insurance company, so it’s primarily interested in bundling insurance with another value proposition to possibly reach a different client segment. This isn’t only a sales matter: Regulatory requirements prevent insurance companies from straying too far into other sectors.

Secondly, startups can bring an even more important value proposition: Market Research aligned with Tryg’s customer base.

“No startup has ever researched Tryg’s target customer segment and then approached us with how their product and customers could bring value to that segment,” Dalsfort says.

Although startups are naturally enamoured of their tech, their pitch should focus more on market-research-backed data of how that tech could answer a potential partner’s needs rather than too much on the tech itself.

The purpose is the customer “Tryg’s purpose is to bring steadiness and peace of mind to people and businesses,” says Dalsfort. “We want to meet our customers where they are and where they might be in the future.”

Tryg has the aspiration to be the most innovative insurance company in the Nordics. An ambition that calls for an environment characterized by openness, curiosity and experimentation.

Startups that recognise this purpose and how they can help Tryg achieve it will have far better chances of securing a powerful partnership.

56

Fintech’s Best-Kept Secret: How IDEMIA’s Technology is Fueling the Future of Payments Built around advanced technologies used to secure billions of essential interactions for access control, connectivity, payments, public security and travel, IDEMIA has a global workforce of over 15,000 employees, with 3,000 of these dedicated solely to R&D. The company serves over 1,900 financial institutions and fintechs globally.

By IDEMIA

T

heir core of R&D specialists—

SDKs, banks and fintechs can build

tic schemes and private networks.

All done with a strong focus on

which includes a team of

digital-first customer journeys, instant-

IDEMIA Token Platform is omni-chan-

sustainability

biometric and crypto ex-

ly issuing digital cards so customers

nel by design and agnostic in terms of

IDEMIA’s long-term approach allows

perts—has helped to produce

can start shopping immediately.

payment use cases (proximity, in-app,

for continuous improvement with

IDEMIA’s Digital First services strike

remote, P2P), form factor used (mobile

a readiness to adapt according to

solutions such as biometric-enabled

the right balance between trust, se-

device or wearable), and the technol-

changes in legislation, trends, cus-

payment cards, API-first digital card

curity, and control—customers control

ogy selected for proximity payments

tomer expectations, global crises,

services and identity proofing and veri-

their own card while banks can ensure

(NFC or QR code).

and social movements that IDEMIA

fication services.

proper security, supported by IDEMIA’s

IDEMIA Token Platform is a com-

has a moral obligation to respond to

robust services back-end and secure

prehensive and field proven solution

and support. The success of the CSR

front-end components to be embed-

enabling payment means digitisation,

efforts relies on the contributions of

ded within mobile applications.

which embraces all sub processes

everyone at IDEMIA.

powered payment cards and innovative

IDEMIA has invested over €1 billion in R&D in the last five years and has over 1,500 active patent families.

“If we want to stay on top of the market, we need to invest in our technology,” says Lillian Grosman, Head of Strategic Sales at IDEMIA Denmark.

“That’s why innovation is such a strong

needed to make a complete digital

Since 2006, IDEMIA has supported

IDEMIA Token Platform

card (or payment token) ready and pro-

the UN Global Compact, the world’s

The second major aspect of its digital

visioned onto a device or shared with

largest corporate sustainability ini-

umbrella is the IDEMIA Token Plat-

a specific token requestor for various

tiative. Its IMPACT program is closely

form, which contributed in tokeniz-

use cases.

aligned with 12 of the UN Sustainable

part of IDEMIA’s DNA and has been for

ing and provisioning more than 400

“The Token Platform’s purpose is

many years.”

million payment tokens. IDEMIA is the

simply to enable the digitisation of

preferred token service provider of

payment cards on a given card network

developed with a strong sustainability

payment networks, such as domes-

Development Goals.

All products and services are

and provision these payment tokens

focus, and IDEMIA’s GREENPAY prod-

Customers today expect immedia-

across a variety of token requestors

ucts and services have become

cy, and one of IDEMIA’s solutions to

in order to secure in-store and online

extremely popular with card issuers,

answer this need is its suite of Digital

payments,” says Lillian Grosman.

e.g., the GREENPAY Planet payment

Digital First Services

First services, enabling card issuers to enrich their mobile banking app with digital card-related features. Using IDEMIA’s easy-to-integrate APIs and

Lillian Grosman Head of Strategic Sales, IDEMIA Denmark

In 2022, IDEMIA Token Platform won

cards produced from 100% recycled

the Gold Award at the Juniper Research

PVC are used for more than 70% of

Future Digital Awards for Fintech and

IDEMIA-issued payment cards in

Payments.

Denmark.

57

IDEMIA solutions ease and secure the interactions between people, objects, companies, governments, and everything in between in both the physical and digital world IDEMIA is everywhere, and the chances that we encounter IDEMIA-powered tech at least once every day of our lives are unbelievably high. If you live in the Nordics, there’s a solid chance that one of the cards in your wallet has IDEMIA-driven tech behind it.

T

o put it plainly: IDEMIA oper-

to give up their physical cards yet, and

comes just in time for Europe’s upcom-

market leader, IDEMIA works directly

ates behind the scenes as a

there’s a certain comfort in having a

ing Accessibility Act.

with Fintechs, Financial institutions,

foundational pillar underpin-

card on hand in case systems go down.“

But the card has an immense brand

service providers, payment schemes,

ning an immense quantity of

But there’s also a brand value to phys-

value in itself and is just waiting for the

authorities, and any other organisations with the same focus as IDEMIA.

infrastructures that drive our modern

ical cards. It’s the one thing customers

right fintech to pick it up and offer it to

digital world.

constantly have that shows a fintech’s

users. Who hasn’t forgotten their PIN at least once in the last 12 months?

It’s impossible to open a bank account,

logo. “Fintechs should leverage that by

get a phone subscription, or open a busi-

creating beautiful cards that people are

ness today without proof of identity. In the

willing to pay for.” Lillian Grosman tells a

Technology enabler, open standards

last few years, this proof of identity has

story of one company in Asia that creat-

and partnerships

grown considerably more advanced.

ed a card that lights up when users pay

IDEMIA has contributed to the launch

with it. In the US, another company has

of the White Label Alliance (WLA), in

a vital role in multiple sectors in the

mood cards that change colour, while

response to increasing demand for

Nordics including government, security,

a third company uses phosphor in its

next-generation, independent solutions.

telecommunications, and finance.

cards so they light up in the dark.

WLA sets vendor-independent stan-

IDEMIA’s identity technologies play

“We work a lot with concept devel-

“It’s all about bringing a branded and

• • • •

dards for contact and contactless cards,

opment and innovation within Identity,”

personalised experience for the user,

mobile, payment terminal acceptance,

says Lillian Grosman. “The Nordics are

and identity technology is deeply inte-

and other form factors. WLA is dedicat-

early adopters. We’ve always called

grated with that regardless of whether

ed to developing an open, independent

Denmark the Living Lab because con-

the card is digital or physical,” says Lillian

EMV standard that domestic payment

sumers are tech savvy and early to try

Grosman. “Using IDEMIA’s suite of tech-

networks and closed-loop retailers

new technologies. So, you can bring a

nologies, fintechs have everything at

can use without any fees. The standard

lot of cool stuff to the Nordics and test

their fingertips to create that experience

plugs into JCB’s licence-free kernel that

it before taking it elsewhere.”

across both physical and digital realms.”

already ships with payment terminals,

The special case in point is IDEMIA’s

allowing private-label brands to create

The Nordics are also almost cashless

IDEMIA

now—Google Pay and Apple Pay make

F.CODE card which uses a biometric

cards for any use, without the burden of

up approximately 25% of the payment

sensor instead of a PIN. Users thumb

card fees, and that will work with exist-

volume in the region. But the Danes still

the chip to authenticate a transaction.

ing terminals.

like to use physical cards, says Lillian

The card is in particular adapted to

Grosman. “I don’t think users are ready

assist visually impaired users, and it

IDEMIA uses its technology to make the world a safer place. As a global

• • • • • • •

15,000 employees with more than 80 nationalities More than €1B invested in R&D in 5 years 1,500 active patent families More than 3000 engineers, including 50+ AI experts and 50+ cryptography experts Serving customers in 180 countries 60+ years of experience in identity and security 500 mobile operators trust IDEMIA 210 eSIM platforms, live or qualified by major MNOs 25M cars connected 3,5B+ identity documents issued worldwide 250+ airports equipped with IDEMIA solutions worldwide

58

Danske Bank Unleashes Groundbreaking Digital Strategy After Survey of 20,000 Personal Customers The strategy took 9 months to prepare, and the bank says it’s dedicated to discovering what customers need, and providing that.

By R. Paulo Delgado

D

anske Bank’s Forward ‘28

and holistic advice for its customers in

them more than just products, but also

strategy is levelled at improv-

their everyday lives.

looking at their economy, and anything

ing the customer experience

The bank’s survey results revealed,

through providing a more tai-

among other things, that customers

lored and holistic advisory experience

expect banks to be better able to adapt

centred around a digital front door.

else specific to them.”

The digital front door aims to be the doorway to whatever customers need.

to their needs. Another revelation was

Regulatory factors come into play.

The bank invested significant re-

that customers want simpler offerings,

Banks are limited by regulations as to

sources into the strategy, which took

tailored to their individual needs. They

how wide their offerings can stretch, but

nine months of resource-intensive

also don’t want to be bombarded with

Danske Bank’s vision is to provide what-

planning to complete, and was based

offerings they don’t understand.

ever people need help with, within those

on a comprehensive survey of 20,000 people in the Nordics.

“Preparing for this strategy was one

Danske Bank intends to solve this

regulatory confines. Those needs could

through a modular solution that pro-

encompass family needs, safety, peace

vides a range of simple base offerings

of mind, health and well-being, genera-

of the bank’s most extensive efforts

that customers can choose, with the op-

tional transitions such as parents helping

I’ve ever personally observed,” says

tion to select add-on services for more

their children buy their first home, or

Christian Bornfeld, Head of Danske

personalised needs. The bank will use

life planning. It might even go as far as

Bank’s Personal Customers Unit. “Con-

customer data and interactions to best

recommending legal services or career

sidering what the bank has recently

propose suitable offerings based on the

coaches to help people transition into a

gone through, we wanted to take the

customer’s needs and preferences.

new career path or into retirement.

opportunity to truly take an outside-in

The Bank intends to fundamen-

“Not all of these offerings will create

perspective and thoroughly under-

tally change a customer’s banking

a financial impact for us,” says Born-

stand what customers are looking for.”

experience through its innovative

feld. “But it will increase our relevance

The bank is well underway in final-

engagement model. It will move over

towards our customers and ensure a

ising the challenges of the previous

to a “digital front door” solution where

deeper relationship with them.”

five years, and its Forward ‘28 strategy

processes are re-thought towards a

is its biggest move to strengthen and

digital-first model, with the flexibility to

Partnership with Infosys

reaffirm its long-standing history in

cater for specific needs or events that

Danske Bank already has one of the

Denmark and the Nordics.

require human-led advice.

strongest digital platforms in the Nor-

“We’re asking ourselves how we

dics. To strengthen that, it has partnered

Pushing relevance for the customer

can become a great bank for families,

with Infosys, a massive multinational

The bank is not “doing digital just to

young people, elderly people, and peo-

software services company with over

do digital” but rather developing a

ple with different preference profiles,”

300,000 employees, and Infosys bought

business model that combines strong

says Bornfeld. “Customers want us to

Danske Bank’s IT branch in India.

digital solutions to offer convenience

look at them more holistically, offering

Infosys offers Infosys Topaz, an AI-

59

first suite of services, but the bank did not express specific plans for this suite, although part of its deal with Infosys includes access to any and all internal technology, whether AI or otherwise.

also recognise that this is a regulated

Christian Bornfeld, Head of Danske Bank’s Personal Customers Unit

sector,” says Bornfeld. “We don’t do regulation because we enjoy it, but because it’s a characteristic of the industry.”

“Of course, we’re looking at generative AI like everyone else is, and we do see some potential use cases, but the technology is not mature enough for customer-facing interactions,” says Bornfeld.

Preparing for this strategy was one of the bank’s most extensive efforts I’ve ever personally observed.

“We take our correspondence with customers very seriously, and generative AI’s tendency to hallucinate means we’re only currently using it where that definitely wouldn’t pose a risk.”

Christian Bornfeld, Head of Danske Bank’s Personal Customers Unit

Generative AI’s “hallucination” is a technical term that describes the unexpected outputs derived from the multi-layered structure of neural networks that makes generative AI work. AI

Tradition balanced by agility

models receive inputs through one lay-

Danske Bank is a pillar of Danish soci-

er, process them, pass the results of that

ety, and has been a major contributing

process to deeper and deeper layers,

factor in Denmark’s transformation

and these finally combine into an output.

from a primarily agrarian society to the

The structure of those hidden layers is

economic force it is today.

what helps AI process both the meaning

In 1871, it was the first bank in the

and the context of a block of text, but it’s

country to directly serve the farming

a black-box process that data scientists

community, in contrast with the trends

still don’t fully understand.

of the time. That decision significant-

“AI isn’t a silver bullet, and it certainly

ly impacted the agricultural sector’s

won’t replace advisors in its current

ability to grow because it finally had

form,” says Bornfeld. “But it does have

access to capital, a move that would

use cases, particularly in summaris-

forever change the course of the Dan-

ing texts or consolidating inputs from

ish economy for the better.

external sources that advisors can then

Fast forward 150 years, and Danske

use, and we’re already using it for that.”

Bank has played essential roles through periods of deflation and inflation, hous-

Three things to know about partnering

ing booms, workforce changes, and

with Danske Bank

globalisation. It expanded into a Nordic

The bank recognises that partnerships

bank, and became the leading bank in

are essential in its new strategy. It

digital solutions about 7 years ago.

has historically pursued larger, more

The bank currently serves over 3

traditional partnerships, but is open

million customers, the largest number

to establishing new partnerships that

in Denmark. Its Forward ‘28 strategy

bring mutual benefit.

leans on the respect the institution has

When looking at assessing partner-

earned over 150 years of blazing new

ships, three assessment criteria are key

trails that others eventually follow, but it’s also adapting proactively to a new

1.

Goal alignment.

level of agility so it can better serve

2.

Ability to scale.

the customers that depend on it.

3.

Compliance.

“We’re relieved to finally be able to look forward after a few years of

“We have to make sure our visions are

having to be inwardly-focused while

aligned,” says Bornfeld. “That might

we repaired and restructured a few

sound simple, but we’ve experienced

fundamentals,” says Bornfeld. “We paid extensive attention to understanding

several examples where both parties

the customer in this strategy because,

had a different definition of success, so

the potential users should be in the

On the regulatory side, the bank has

that needs to be explicitly defined.”

millions rather than the tens of thou-

simplified much of its paperwork and

moving forward, we’d like people to

Fintechs should also consider their

sands, and fintechs should pay close

created several boilerplate documents to

assess us on our execution and daily

ability to scale. For a product or ser-

attention to how they can realistically

prevent overwhelming new fintech part-

delivery, unbiased by any precon-

vice to be interesting to a large bank,

scale to those levels.

ners with legalese. “But fintechs should

ceived ideas of our brand.”

60

Banking Circle Partnership provides Pleo with streamlined payments for business expenses Faster Payments Service on Banking Circle direct rails enables real-time payments that cut manual processes and internal resource requirements.

By Victoria Howard

S

eptember 2023– Pleo an-

lays in the evenings and over weekends

licenced bank, free of legacy systems,

business payments & card issuing, B2B

nounces partnership with

as payments through Banking Circle

Banking Circle enables payments

Buy Now Pay Later and account-to-ac-

Banking Circle for greater

don’t need to wait to be settled in bulk.

companies and banks of any scale to

count payment methods.

payment volume capacity and

“In the first month of our partnership,

seize opportunities in the new economy

faster settlement times. Banking Circle

we processed tens of thousands of pay-

is a member of the UK Faster Payments

ments through Banking Circle without a

Service (FPS), as a direct participant

single issue or delay.”

- quickly, at low cost.

Banking Circle S.A. is a modern

Banking Circle Group is owned by EQT VIII and EQT Ventures, in partnership with Banking Circle S.A.’s founders.

correspondent bank committed to

The Group entities have offices in

for GBP. Through its partnership with

Pleo is an end-to-end business spend

building a local clearing network for all

Amsterdam, Copenhagen, London,

Banking Circle, Pleo is enhancing its

solution focused on removing inefficient

major currencies, to deliver fast, low

Luxemburg, Munich, Singapore and

service with real-time direct clearing

finance processes so that teams are

cost payments with no hidden fees

Stamford, Connecticut.

and settlement for GBP.

freed up to focus on strategic work. The

for the beneficiary. It provides a suite

“Pleo was launched to transform the

Pleo solution also means that Finance

of unique and award-winning banking

tedious process of managing business

teams have immediate access to re-

solutions, including multi-currency

spending into something effortless and

al-time data and insights. Working with

banking accounts and Virtual IBANs,

futureproof,” commented Thorbjørn Fink,

Banking Circle, Pleo can now extend its

bank connections for local clearing

Chief Operating Officer at Pleo. “To en-

value chain with the addition of real-time

and cross-border payments, all under-

sure settlements are processed just as

local and cross-border payments.

pinned by market leading compliance

smoothly, we need a bank that can re-

Laust Bertelsen, CEO of Banking Circle

and security.

added: “With both GBP and EUR avail-

Through bespoke, flexible, scalable

quickly. The Faster Payments Service

able for direct clearing and settlement

and futureproof solutions Banking Cir-

with Banking Circle ensures payments

on Banking Circle’s payment rails, the part-

cle S.A. is enabling financial institutions

are made within five minutes, delivering

nership means we can help Pleo break

to help their customers transact across

efficient and streamlined transactions

down age-old barriers to fast, cost-effec-

borders in a way that was previously

and a great customer experience. And

tive cross-border payments for its clients.

not possible.

move complexity and process payments

the partnership future-proofs us for

“We are building a super-corre-

Headquartered in Luxembourg,

expansion with higher than industry-av-

spondent banking network to enable

Banking Circle S.A. has offices in Lon-

erage upper transaction limits.

faster and lower cost B2B payments

don, Munich and Copenhagen.

“The partnership is also critical for our service delivery goals. There are no de-

Laust Bertelsen CEO, Banking Circle

regardless of borders. Being a direct

Banking Circle S.A. is an affiliate

participant of Faster Payments for GBP is

company in the Banking Circle Group

an essential element in bringing that to

ecosystem which serves payment

fruition for ambitious, forward-thinking

companies, banks, global marketplaces

businesses like Pleo.”

and online merchants through a rich set of complementary eCommerce solu-

About Banking Circle S.A.

tions. These include global cross-bor-

Banking Circle S.A. is the Payments

der payments, accounts and liquidity

Bank for the new economy. As a fully

management, revenue based financing,

Pleo (pleo.io) Pleo is a smart business spending solution that offers company cards and automated expense reports for employees, enabling them to buy the things they need for work while giving finance teams full control and visibility of all company spending. Pleo catches receipts on the go, automatically categorises expenses based on previous behaviour and eliminates the need to do manual expense reports.

Pleo was founded in Copenhagen in 2015 by fintech veterans Jeppe Rindom and Niccolo Perra, both serial entrepreneurs with years of experience building successful financial products. Today, the Pleo team is +800 strong, with seven European office locations (London, Stockholm, Berlin, Madrid, Paris, Lisbon and Copenhagen). Today, over 25,000 companies are using Pleo across sixteen European markets.

61

Huddlestock Enters Denmark to Power Modern Investing Experiences The company also has its sights set on the Baltics, bringing its plug-andplay investment solution to help firms fulfil growing retail investor demand.

Interest in retail investment is growing massively. But technology has lagged behind the demand. Investment-asa-Service lets companies chop down the time-tomarket, allowing them to innovate rapidly enough to meet this growing consumer need.

Lars Thomsen Managing Director for Denmark and the Baltics at Huddlestock

incumbents—to integrate investment functionality either completely or modularly. Those modules allow everything from trading in global markets and funds, customer onboarding, reporting, settlement and reconciliation.

By R. Paulo Delgado

“We provide everything out of the

A

box that relates to the investment value

ppealing to retail investors

chain,” says Thomsen. “Those compa-

comes with unique chal-

nies that only want parts of the solution

lenges. The cohort wants

can select specific modules they want

diverse offerings, digital

to implement. This could be either risk

solutions, AI-powered advisory ser-

management, reconciliations, account-

vices, and a smooth user experience.

ing, fund administration, or whatever

Such solutions take time and resources

they need. Or they could implement the

to develop.

entire solution instead.”

Investment-as-a-Service (IaaS)—pro-

Huddlestock also offers a Europe-

viding investment functionality through

an regulatory umbrella and licensing

APIs and modules that companies can easily integrate into their offerings— opens the door to faster times to market.

From left to right: Lars Thomsen, Managing Director for Denmark and the Baltics & John Skajem, CEO of Huddlestock

“Financial institutions have found it

coverage for its clients. If those clients don’t have an investment banking licence, they can piggyback off Huddlestock’s licence, opening the European

challenging to digitise rapidly enough

first fintech to go public in Norway. The

“There’s a large merger wave hap-

to meet market needs,” says Lars

IPO resulted in a massive surge in stock

pening between Danish banks right

Thomsen, Huddlestock’s newly ap-

price, prompting Huddlestock to pursue

now,” Thomsen tells NFM. “Medi-

growing massively,” says Thomsen. “But

pointed Managing Director for Denmark

and close mergers and acquisition (M&A)

um-sized banks are acquiring smaller

technology has lagged behind the de-

and the Baltics. “An IaaS solution would

deals in Sweden, Germany, and now

banks, and there is also a strong

mand. IaaS lets companies chop down

help these institutions quickly tap into

Denmark. It also has offices in the UK.

movement to consolidate IT solutions

the time-to-market, allowing them to

in the investment banking sector. But

innovate rapidly enough to meet this

Market entry into Denmark

banks are starting to recognize that

growing consumer need.”

and the Baltics

this task is larger than expected.”

the rapidly evolving retail investment market without suffering a protracted time to market.”

Huddlestock began as a personal

In 2021, Huddlestock acquired Danish

The sheer quantity of resources

market to them.

“Interest in retail investment is

Huddlestock research indicates that the majority of neobanks offering

banking app in 2014 but, recognizing

Wealth Consulting firm Visigon, which has

needed to consolidate these IT systems

investment services as part of their

a gap in the market, it later pivoted to

over 10 years of experience in the Danish

makes it infeasible to do it rapidly enough

wealth solutions are doing it through

IaaS and other digital investment solu-

wealth sector, and is now opening a dedi-

to compete in such a dynamic sector as

IaaS. “Many neobanks are focusing on

tions. Their platform allows companies

cated Huddlestock office in Denmark.

retail investment, says Thomsen.

becoming profitable,” says Thomsen.

to embed fully white-labelled invest-

The company intends to bring the

ment products into their own offerings.

entire Huddlestock platform to Denmark

es this problem directly, allowing any

profitable new revenue streams while

and the Baltics.

player—from small fintechs to large

helping to reduce operational costs.”

In late 2020, the company was the

Huddlestock’s IaaS solution address-

“And an IaaS solution can introduce

62

In times of uncertainty: SME lenders should tap into Open Finance In a shaky market for SMEs, there’s an urgent need among lenders to understand borrower performance in real time. One key enabler for succeeding in this environment is access to Open Finance data.

46%

of SME businesses in Sweden (that use financing) say that accessing capital has become more difficult during the past year-and-a-half Source: Monto SME financing survey

37%

of SMEs in Sweden have recently used their personal savings or resorted to private loans in order to counter inflation and higher interest rates Source: Monto SME financing survey

By Tom Turula

A

cross the Nordics, small-and

being used in credit processes. Most

How real-time data from accounting

medium-sized businesses

lenders realise that historical snapshots

software can improve decisioning

(SMEs) are in survival mode.

from annual reports are insufficient to

In Sweden, Finland as well

gauge risk, so they are looking for new

as Denmark, bankruptcy rates have recently hit historical peaks.

•

ness’ profit margin, cash flow,

data sources.

Open Finance, an evolution of Open

Metrics and KPIs. How is a busiROI, developing?

•

Outstanding taxes. Are there

Banking, enables lenders to access a

government-funded tax pay-

are faced with challenging waters.

wide range of information and financial

ments due?

Whether it’s legacy banks, fintechs or

insights to form a more holistic picture

niche players, most lenders are evalu-

of businesses.

Lenders targeting the SME segment

•

Other lending. Does the business have active loans with other

ating their books more closely to avoid

“Real-time data sharing between

excess risk. A larger share of financing

lenders and borrowers is the best way to

applications are rejected.

close the insight chasm in SME lending.

ratio. Can the business tackle its

lenders?

•

Accounts payable vs. receivables

Open Finance provides a unique oppor-

cash flow shortage by selling or

keen to expand loan volumes. Now,

tunity for lenders to access the data they

lending against their outstanding

the priority is to maintain a healthy

need to remain competitive. This will

loan book,” says Leonard Schreij, CEO

also increase the pool of capital avail-

at Monto, a Stockholm-based credit

able for businesses, especially during

income statements to gauge

intelligence company. “That’s to be ex-

downturns,” says Schreij.

performance.

“In good times, lenders are generally

pected, but the problem is that many

Rolling balance sheets and

Financial APIs an easy way to

of the market.”

services, the amount of data sources

get started

grows. Data from accounting, invoicing,

So if the future of lending is Open

Open Finance holds promise

CRM, social media and other platforms

Finance data, how can lenders actually

for SME lenders

can provide the raw material for smarter

get started? That’s where providers of

The economic turmoil brings a renewed

lending services.

financial APIs come in.

Leonard Schreij CEO, Monto

borrowers”, says Schreij.

“It’s often better to start a local pilot with a provider than to get bogged down in a multi-year transformation project.”

As more and more businesses run their operations from cloud-based

“Having an up-to-date information

Source: Monto SME financing survey

invoices?

•

healthy businesses are being left out

focus on the type of information that’s

82%

of SME businesses in Sweden are open to sharing their real-time accounting data with lenders, in exchange for better pricing or a more seamless service

“As a lender, this is an ideal time to

flow empowers lenders to optimise

start connecting your customer base by

their portfolio and key processes such

working with a specialist data provider.

as onboarding. The better lenders can

Once you’ve integrated a data API into

understand how inflation and market

your process, it’s also important to

demand are affecting a business, for

design solid incentives to motivate data

instance, the better equipped they are

sharing, and to back that up with clear

to identify low-risk, high-quality loans.”

communication as to how this benefits

Monto Monto is a Stockholm-based fintech that helps Nordic SME lenders harness the power of real-time data. We combine smart tech and deep industry know-how to help fintechs, banks, lending brokers and BaaS platforms make better credit decisions, streamline processes and improve the customer experience.

63

Lithuania Bet on Fintech and Won. Now It’s Doing It Again Lithuania went from a few fintechs to hundreds in the last 6 years. Its new 5-year strategy now aims to achieve 30% average revenue growth for fintechs by 2028.

By Paulo Delgado

L

Lithuania is fast to adopt regulatory changes, allowing companies to have an innovative business model.”

Vaida Česnulevičiūtė-Markevičienė, Vice Minister of Finance for Lithuania

substantial tax incentives for qualifying companies. These incentives include: •

Triple-deduction of R&D costs.

•

Shorter depreciation periods for assets used in R&D.

•

“Innovation Box”—where taxable profit from inventions created through R&D activities is taxed at a reduced 5 percent tax rate.

•

Direct funding.

•

Further reduction of taxable profits (up to 100 per cent) through quali-

ithuania’s “Before and After”

monly known as Instant Payments.

nies to have an innovative business

fying costs for acquisitions serving

fintech success story was

Fintechs flocked to the country.

model,” says the Vice Minister. “For

technological modernisation.

initially driven by government

The country has now launched a

example, Lithuania was the first to

and public institutions to bring

fresh five-year fintech strategy with am-

introduce national crowdfunding

The purpose of the incentives is to

innovation to the Baltic state. Today,

bitious targets to grow its fintech sector

regulations. By the time the European

bring innovative products to the market.

the ecosystem they created is the one

even further.

legislators came out with its own ver-

The Government has recently proposed

driving the success story forward.

“The entire ecosystem has changed

sion, many of the Lithuanian compa-

to the Parliament even further incen-

“Before Lithuania’s fintech revo-

since then,” says the Vice Minister. “We

nies were already largely compliant

tives to encourage business growth

lution, we had a very concentrated

see it in how this new strategy was

because the European regulations

and investment.

financial market,” says Vaida Česnu-

created. The ecosystem itself drove

were so similar to ours.”

levičiūtė-Markevičienė, Vice Minister

the new strategy, and it was created

of Finance for Lithuania. “It made for

bottom-to-top this time.”

a stable market, but didn’t encourage

Plan will bring private and public sector

dialogue between the public and private

entities together in a joint program to

sector, encouraging a climate of coop-

create a green finance ecosystem, further attracting investment into the zone.

innovation, resulting in few products in

Why fintechs choose Lithuania

eration for the mutual benefit of both.

the market and forcing prices higher.”

When Brexit forced UK-based fintechs

Regulators are accessible and willing to

to look for new European head-

listen or provide legal clarity as needed.

At that time, Lithuania launched a

The country’s Green Finance Action

The country believes in a spirit of

As for talent and people, one example of the country’s dedication to this was

top-to-bottom fintech strategy, driven

quarters, many of those companies

by the Lithuanian Ministry of Finance

moved to Lithuania. The combination

have the necessary licensing services

petence two years ago, a joint effort to

and Central Bank to bring much-needed

of regulatory stability, a highly busi-

to support that, but fintech is about far

share experiences in the ever-evolving

ness-friendly environment, advan-

more than just licences—the ‘fin’ part,”

subject of AML, and also to offer training to raise competencies.

innovation to the country.

The strategy worked. Lithuania was

“Finance is a regulated sector and we

tageous positioning between the

she says. “It’s also about the ‘tech’ part—

one of the first eight countries to grant

Nordics and Europe, talent availability,

supporting companies that help those

access to the new SEPA scheme, and

and excellent internet speeds made

fintechs with core business needs.”

the Lithuanian Central Bank’s CEN-

Lithuania the obvious choice for com-

when it formed its AML Centre of Com-

“We’re also implementing Knowledge Hub Programs to increase competencies and make Lithuania a

TROLink Payment System was one

panies like Curve, Yapily, and Revolut.

The ingredients for fintech growth

of the first to implement SEPA Instant

Not only fintechs are moving to the

“We understand that the ingredients that

Minister. “This is also being done as a

Credit Transfer (SCT Inst), more com-

Baltic state to set up headquarters or

go into fintech growth are talent, regula-

cooperative effort between the public

branch offices. The country now counts

tion and funding,” says the Vice Minister.

and private sectors.”

Fintech Centre of Excellence,” says Vice

With its new five-year strategy, Lithua-

as part of its roster such major players

In the funding arena, Lithuania

Vaida ČesnulevičiūtėMarkevičienė

as Danske Bank, Oracle, Telia, Wix, and

attracted nearly €300 million in tech

nia isn’t just betting on fintech—it’s

many other major tech and financial

investment in 2022, with €67 million of

doubling down on a proven formula for

Vice Minister of Finance for Lithuania

companies.

that going to fintechs.

innovation, inviting the world to be part

“As a country, we’re fast to adopt

The Ministry of Finance also follows a

regulatory changes, allowing compa-

“growth-friendly tax policy,” with multiple

of its next chapter in financial technology leadership.

64

AI, Data, and Globalisation 2.0 An Interview with Ronit Ghose, Head of Citi’s Future of Finance Think Tank Ronit Ghose has been with Citi for over 26 years, serving first as an equity analyst, then moving on to Global Head of Banks and Co-Head of Fintech at Citi Research. Since, 2021, he’s headed Citi’s Future of Finance team, a Think Tank focusing on the future of tech and finance. Ghose also serves as an Advisory Board Member for several tech companies, VC firms, and one leading university.

By Paulo Delgado Ronit, thanks so much for joining us

vious form of globalisation had already

for this interview.

started unravelling back in 2010 with

Thank you. It’s a pleasure to be here.

some of the slowdowns in several meg-

menting 5G, 6G, and so on.

This globalisation will have profound economic impacts.

atrends caused by things such as rising What is the most transformative

protectionism, the Brexit vote, and

How would you summarise the

trend impacting global finance at

China/US tensions. But we’re already

difference between 1990s and

the moment?

seeing a bounce back of trade-to-GDP

2000s-style globalisation versus

ratios to almost previous peak levels.

what we’re seeing now?

The predominant trend I see is how the nature of globalisation has changed.

Globalisation won’t look the same as

That’s simple: In the 1990s and 2000s,

The globalisation we were used to in the

it did before. And what’s really interest-

globalisation was defined by container

1990s and the 2000s isn’t the same as

ing about this so-called Globalisation

ships. Today, it’s driven by data.

what we’re seeing today. We could call

2.0 is that we’re seeing huge amounts

this new form Globalisation 2.0.

of global flows.

Globalisation always has profound

For example, over 90% of Dubai’s

implications for finance, technology,

population is made up of foreigners.

and economics.

Vibrant, global cities such as Singapore,

What technologies are brewing at the moment that will change the way we bank in five years?

AI is the major technology affecting

In the 1990s and 2000s, we saw great-

London, and New York produce enor-

many sectors, not just banking.

er diversification of supply chains. Initially,

mous amounts of data and intellectual

Banking, for modern finance, is all

blue-collar jobs, then white-collar jobs

property that passes across borders

about data. And AI is, in many ways, all

started getting distributed around the

merely by the fact of the global nature

about doing things with data.

world. Large companies started using an

of people living there.

integrated setup, such as manufacturing in one place and design in another.

The best example of that is this. [Ghose

The GDP produced by trade ships moving from China to the West Coast

Despite some of the negativity surrounding AI, the great thing about it is that it’s a productivity boost.

of the US won’t necessarily grow faster,

New innovations typically lead

shows the back of an iPhone.] It used to

but we’re seeing other trade patterns

to massive productivity boosts, like

say something like ‘Designed in California’

emerging from this data transfer.

automobiles did in the 20th century

and ‘Assembled in China.’ This phone’s

The movement of physical goods

and steam engines and electricity did

might have slowed down during COVID,

before that. Historically, those boosts

People have said that globalisation

but the movement of data isn’t slowing

were mainly in the blue-collar sector.

is dying. We all certainly felt that way at

down. And it’s only going to grow more

the beginning of the COVID pandemic

once we give people even cheaper

likely see similar productivity boosts in

when the borders closed. But the pre-

mobile data and start widely imple-

certain white-collar parts of the

production cycle spans the globe.

What’s interesting now is that we’ll

Ronit Ghose Head of Citi’s Future of Finance Think Tank

65

Ronit Ghose, Head of Citi’s Future of Finance Think Tank, at Nordic Fintech Week 2022, on stage together with Thomas Krogh Jensen, CEO at Copenhagen Fintech

economy and in finance over the

about 10 years now in the back-end.

is the leapfrog effect: That is, markets

next five years. Even more interesting

One of the primary functions for back-

with less penetration suddenly jumping

is that jobs requiring physical skill

end AI and Machine Learning is in Risk.

ahead of more advanced markets.

might become more valuable. I don’t

For example, language processing

I experienced that in Korea about 10

know about you, but I don’t want a

has become sophisticated enough for

or 12 years ago. When we arrived, we

robot to cut my hair. So, prices will

banks to use it to carry out predictive

were given Korean phones when we

probably go up in those sectors.

analysis of conversations and flag

landed because our British phones only

The matter of disappearing jobs is a

potential risk cases. This has been hap-

supported 3G, but Korea had pro-

common economic trend. Many finance

pening in the US and the UK for about

gressed beyond this.

jobs that existed 20 or 30 years ago

seven or 10 years.

don’t exist today. This is just a general

Another example is India. The cost of hardware has gone down while real

trend over time: Jobs die, and then

Where do we stand with crypto

income has gone up in the last 10 years.

more jobs are created.

and blockchain? Do these still have

Data costs have also decreased, and a

relevance after the AI hype?

massive portion of the population now

Economists call this the Lump of Labour Fallacy—the belief that jobs are

Valid use cases for crypto and

suddenly has data access. A fintech

a zero-sum equation. There’s no such

blockchain still exist. The perceived

company from a more “digitised” mar-

thing as a fixed amount of work or a

slowdown in crypto hype isn’t only due

ket might be surprised to discover that

fixed quantity of jobs.

to AI, but also because of the regulato-

these lesser-developed countries have

ry clampdown, especially in the US.

now leapfrogged ahead of it.

Obviously, these transitions do cause pain for some individuals. There are

Several cases of fraud and market

some negatives. But AI opens immense

manipulation have also negatively

They’ve had real-time payments for

potential for the way we bank.

affected public perception.

about 10 or 12 years through an internal

In the UK, for example, it’s extremely

The majority of CBDC implementa-

Nigeria is yet another great example:

system called NIBSS, yet Nigeria’s inter-

difficult to get personalised service un-

tions that are currently being tested

net penetration is only about 40%. So,

less you’re very wealthy. Sophisticated

use blockchain. China has a centrally

it’s important for fintechs from digitised

generative AI chatbots trained exten-

controlled CBDC that isn’t block-

zones to not jump to conclusions when

sively on internal data could potentially

chain-based, but most CBDCs currently

entering a zone they feel is less.

help these customers gain insightful

in testing use blockchain, so there’s a

answers to their questions, thus further

definite future for the technology.

A huge divide exists in the level of

How are AI and Machine Learning

digitisation across markets. How

being adopted at the back-end

should Fintechs approach this divide?

in finance?

Flatpay is the brainchild of four digital Actually, banks have been using AI for

Ronit, thank you so much for taking time out of your schedule to answer

democratising finance.

We must define what we mean by

our questions.

Thank you. It was my pleasure.

Ghose is a featured speaker at Nordic

digitised. If we’re talking about internet

Fintech Week 2023 happening in

penetration, then one thing we’ve seen

Copenhagen from 27 Sep to 28 Sep.

66

Redefining Profitability in Fintech’s New Era As market dynamics shift, startups prioritize profitability over fast user growth. Industry experts highlight the significance of sustainable growth, profitability cycles, and the role of trust in finance.

By Jakob Frier

U

p until 2022, there was higher tolerance for startups prioritizing user acquisition and market

We are currently experiencing the aftermath of the exuberant events of 2021, which has left the startup ecosystem grappling with a painful hangover.

share over immediate profitability.

The market was characterized by favorable circumstances of near-ze-

ro interest rates, where traditional investment options offered minimal returns. That prompted major entities like large corporations, hedge funds, and sovereign wealth funds to channel their funds into venture capital (VC) and startups.

Consequently, the timeline for

Jelena Zec, director at Citi Ventures.

closing deals in 2021 dramatically shortened, often concluding in under a month. This acceleration had the unintended effect of diminishing the

potential to revolutionize financial ser-

emphasis on due diligence during the

vices, Citi Ventures has built an active

decision-making process. The prevail-

global portfolio of more than 100 start-

ing sentiment in the business world was

ups including more than 30 unicorns

one of apprehension about missing out

and 28 companies that have exited via

on potential opportunities.

IPO or acquisition. The team’s two most

The anxiety-driven mindset prompt-

recent European investments, Anyfin

ed many to invest without conducting

and Doconomy, have been directed

their customary level of thorough inves-

towards the Nordics.

Zec acknowledges that investors

tigation. However, as 2022 unfolded, a

are increasingly looking for fintech

new trend began to evolve.

companies that can achieve a bal-

“We are currently experiencing the aftermath of the exuberant events of 2021, which has left the startup ecosys-

ance between innovation and sound

Jelena Zec, Director, Citi Ventures

financial management, demonstrating a clear path to profitability and sus-

tem grappling with a painful hangover.

The present situation is characterized

to the realm of venture capital where

As a result, efforts are being made to

tainable revenue models. But to Zec

by a widespread downturn in various

funds are actively seeking investments

conserve cash on both fronts, reflecting

this shift is pivotal for ensuring the

sectors of the operating world. Both

from their limited partners. However,

the financial strains that currently define

success of partnerships:

valuations and deal volume have taken

this is proving to be an uphill battle.

the landscape,” Zec adds.

a significant hit, contributing to the

“The struggle to secure funds is not

“Just as in a marital relationship, it’s essential to comprehensively under-

prevailing downturn,” says Jelena Zec,

confined to startups alone. Venture

We’re living in cycles

stand one’s partner. This notion

director at Citi Ventures.

capital funds themselves are facing dif-

Founded in 2010 with mandate to invest

applies not only to VCs getting to

ficulties in raising capital from their LPs.

in category-defining startups with the

know startups but also for startups

Moreover, the challenges extend

67

to diligently assess VCs. This reciprocal process holds critical importance.”

She argues that the focus on profitability and its sustainability is cyclical,

Growth is still crucial, but it needs to be accompanied by a convincing path to profitability and healthy underlying unit economics.

much like the ebb and flow of trends.

“We should anticipate another phase where the emphasis shifts away from profitability and towards rapid growth. Eventually, this cycle will reverse as the drawbacks of neglecting profitability become evident.

This pattern is far from linear. Nonetheless, there’s a noticeable change in the priorities venture capital funds

Oliver Sjöstedt, Principal, Upfin

consider when evaluating potential investments,” she concludes.

Underestimating compliance costs

more late-stage fintech companies

Zec and the Citi Ventures team assess

prove that their business models can

various aspects when evaluating

become profitable, pressure to focus

potential investments, including

profitability will ease for early-stage

scrutinizing the potential market and

companies with similar models,” Sjöst-

competitive landscape. They also

edt says.

delve into the startup’s distinct value

But the single approach to profit

proposition, closely examining its

does come with some risk, as inves-

business model.

tors are shifting from a singular focus

“Our evaluation extends to con-

on user growth to a singular focus on profitability.

ducting a comprehensive financial

“In doing so, investors end up mis-

analysis, encompassing an in-depth review of revenues, expenses, and cashflow as well as a thorough understanding of unit economics. This

takenly encouraging behaviour that undermines the venture model, where

Oliver Sjöstedt, Principal, Upfin

ambition, simplicity and growth are sacrificed. There is a nuance beyond

process includes performing sensitivi“Constructing trust is a gradual

is no longer a feasible approach, and

the dichotomy of growth and profits;

process intertwined with consumer

in Sjöstedt’s perspective, this shift to-

what we’re trying to avoid is mindless-

Another crucial dimension is the

adoption. This process necessitates

wards sustainability is a positive one.

ly scaling businesses that can never

regulatory environment. Due to the

an investment of time, an aspect that

“Growth is still crucial, but it needs

become profitable, not create prof-

potentially substantial costs associated

startups often underestimate due to

to be accompanied by a convincing

itable businesses that never scale,”

with regulatory compliance, underes-

the misconception that trust can be

path to profitability and healthy un-

Sjöstedt argues.

timating these expenses can pose a

built over night,” Zec says.

derlying unit economics. As investors

But some things will never change,

regain their trust, they’ll become more

and venture capitalists typically invest

An era of extraordinary companies

receptive to lengthier and less pre-

in startups not for a modest return

At Upfin, a Nordic venture fund spe-

dictable routes to profitability. Really,

but for a potentially significant one.

focus on customer acquisition and

cializing in early stage fintech, principal

it’s a ridiculously basic perspective to

So founders should avoid getting so

expansion can inadvertently divert

Oliver Sjöstedt is adapting to the “new

ask yourself, ‘How could this business

focused on short-term gains or metrics

attention from cultivating this essen-

normal”. Even though requirements

ever become profitable?’ Hopefully we

that they lose sight of their larger,

tial trust.

for fundraising have increased and

won’t forget it again,” he says.

long-term vision. They should not let

ty analyses to assess different scenarios,” she explains.

significant hurdle for startups striving to achieve profitability.

Amidst hyper growth, the intense

immediate challenges or concerns

“This perspective is especially rele-

valuations are back to the level before

vant in the finance industry, where the

the heyday, Sjöstedt looks positively at

Scaling beyond mere profits

disruption of long-standing financial

the recent trends in the industry:

As early-stage investors, Upfin often

services clashes with the credibility of

“The past three years have been tur-

curtail their broader aspirations.

“I’d say that the aim in regard to

lack substantial data to evaluate profit-

profitability should be towards

established brands that have fostered

bulent to say the least, with for many,

ability. The priority for Sjöstedt and the

having the ability to choose it once

trust over centuries,” Zec says.

a very painful adjustment period.

team is to identify product-market fit

you’re at scale. Don’t fall into the trap

She points to the notable example

However, there are already signs of an

and ensure scalability. Nevertheless,

of becoming too shortsighted or

of Silicon Valley Bank, where a crisis

upswing. I am convinced we will look

the potential for robust unit economics

dampening your vision; VCs are not

prompted a reversion to trusted estab-

back at 2023 as a year where a new

is essential.

here to back safe paths to profitabili-

lished financial institutions like Citi. The

generation of truly exceptional compa-

significance of trust becomes evident

nies were being built.”

in such instances.

Growth without considering costs

“If a startup has three-month sales

ty. If you have a bold idea of how to

cycles with enterprises, we look for

reshape financial services for the

a payback period of under a year. As

better, let’s talk.”

68

How AI Company 2021.AI Empowers Responsible AI Use Across Industries AI solutions provider 2021.AI was in the AI game long before it became cool. Now, it’s inundated by requests to help companies implement AI responsibly.

chine-learning models so companies can (a) efficiently develop, deploy and operate models at scale, and (b) provide such comprehensive GRC support that even the most regulated industries, such as healthcare and finance, would have all requirements covered.

“All the models currently in use in the banking sector—like the models used for credit scoring—must provide full documentation and transparency to ensure fairness,” Munck says. “This is precisely what GRACE provides.”

Any organisation faces a tough decision when it comes to implementing the latest breakthroughs in AI—Large Language Models (LLMs). Should they implement current LLM solutions and risk regulatory violations, or ban it outright and miss out on the phenomenal innovation and growth opportunity these models offer?

“If the healthcare sector can

By R. Paulo Delgado

implement LLMs responsibly, any

F

sector can.”

or experienced AI companies

GRACE offers clients a complete suite

like 2021.AI, ChatGPT changed

of GRC solutions, including support for

everything. Business suddenly

in-house LLMs.

boomed.

“We were very happy about ChatGPT

for three reasons,” says Mikael Munck, founder and CEO of 2021.AI, an AI company whose GRACE Governance Platform ringfences AI models so they can operate compliantly. “One—our families finally understood what we had been doing. Two—everyone using ChatGPT intuitively realised they needed a governance layer or solution. And, three—all our investment in the GRACE platform now paid off. Being model-agnostic, it integrates nicely with ChatGPT or any other AI model.”

Before starting his AI company, Munck worked at a major Danish bank that was one of the first to implement

Mikael Munck, Founder and CEO of 2021.AI

machine learning models. Despite these models’ efficiency, they were

of platforms for Amazon and Uber, and

highly resource-intensive, complex,

provided valuable guidance.

and lacked the community code

GRACE’s LLM solution is currently

Competition has intensified in the Nordic fintech sector over the last few years,” says Munck. “For fintech companies to maintain an edge, they’ll have to develop solutions that are technically more difficult for competitors to replicate. AI and LLMs will play a significant role in helping them do this.”

deployed at Rigshospitalet, a highly

Mikael Munck, Founder and CEO of 2021.AI.

implement an LLM using GRACE LLM

specialised medical centre in Copenhagen. In this deployment, an LLM model trained exclusively on the hospital’s documentation will offer assistance to thyroid cancer patients and their families, even after hours.

Coupled with GRACE, the model strips all Personally Identifiable Information and answers pre-operational questions for patients. If it encounters a question it’s forbidden from answering, it directs the query to a doctor, and it’s been specifically instructed never to offer medical advice.

“If the medical sector can compliantly Governance, then any sector can—even the financial sector,” says Munck.

For fintechs in the Nordics, AI and

The company saw that its AI platform

LLMs might be the make-break of

support that exists today. Europe also

AI Governance tech ahead of its time

needed to do more than just support

success or failure, considering the

lacked the talent for AI, and the bank

After building for several years, 2021.AI

data scientists and organisations to

competitive landscape.”Competition has

had to source people from New York

became engaged with the EU three and

increase their efficiency in developing

intensified in the Nordic fintech sector

and London.

a half years ago to help develop guide-

and operating AI models. It also needed

over the last few years,” says Munck.

“For fintech companies to maintain an

After leaving the bank, Munck

lines for building trustworthy AI.

to deliver a full Governance, Risk, and

wondered if there was a less-resource

“We recognised that, globally, there

Compliance (GRC) engine within its plat-

edge, they’ll have to develop solutions

intensive way to develop such models.

would ultimately be many regulations,

form to ensure compliance with existing

that are technically more difficult for

That’s when he met Danny Lang, a ma-

criteria, and privacy needs around AI,

and future AI regulations.

competitors to replicate. AI and LLMs

chine learning expert in the USA who

both across jurisdictions and market

had engineered precisely these types

sectors,” says Munck.

They developed GRACE, which ringfences a company’s AI and ma-

will play a significant role in helping them do this.”

69

Achieving win-win outcomes: Sprintform’s digital solutions redefine success beyond zero-sum games Digital Consultant and software solutions provider Sprintform excels in delivering successful outcomes through partnerships, agile methodologies, innovation, and data security.

course whenever necessary quickly, and hence we can deliver value to our clients in a timely manner,” adds Andras.

Ultimately, embracing agile methodologies empowers Sprintform to stay ahead of the curve in the rapidly evolving software development landscape.

Innovating with emerging technologies While the transformative impact of AI in the product development landscape is yet to be fully established, Sprintform is actively exploring AI tools to prioritize customer experiences. With a proven track record of assisting in building AI platforms, they continuously research to examine and incorporate them into their services, aiming to enhance the speed at which they deliver products to the market.

“Although we acknowledge that there may be some overhyping of these tools, we firmly believe that they will revolutionize how we work in the future. Specifically, when it comes to potentially transforming text-based services, particularly those utilizing chatbots, implementing such innovative customer experiences can serve as a critical differentiator in the future. In the fintech and banking industry, where customer experience has often lagged, it is an opportune time to restructure strategies from the end-user’s

By Marria Qibtia Sikandar Nagra

A

perspective. Importantly, these advancements do not affect our partnerships with significant portion of our team possess-

audits, and technology-related aspects,

our customers. Instead, they empower

ware development compa-

es experience from both the vendor

including code reviews,” adds Andras.

us and our clients to accelerate product

nies in the market, Sprintform

and the client sides, enabling us to un-

This is best exemplified in Sprint-

stands a class apart. Their

mid an abundance of soft-

delivery,” states Andras.

derstand and cater to the needs of our

form’s contribution to a mobile banking

chief value proposition lies in their

clients effectively,” says Andras Berczeli,

project that had previously faced sever-

Ensuring transparency and privacy

collaborative approach towards client

Managing Director at Sprintform.

al delays and challenges. Through their

Sprintform implements rigorous

active involvement in product strategy

protocols to safeguard client data

projects, working with them closely and

By involving stakeholders throughout

embracing their projects wholehearted-

the development process, Sprintform

and code review process, they identified

security and privacy during develop-

ly. By going beyond zero-sum games,

ensures that their client’s feedback is

the issues causing inefficiencies and

ment. Their approach extends beyond

they understand that nurturing positive

continuously incorporated and they

financial losses. By addressing these

traditional data security measures and

relationships is essential for ensur-

deliver a product that meets their ex-

concerns head-on, Sprintform success-

implements robust cybersecurity

ing sustainable success. Sprintform’s

pectations. “Transparency and honesty

fully overcame obstacles and ensured

methodologies. Whether they’re working

experience of working with clients in the

are core principles for us. We believe in

a positive outcome. This is a prime

on web, mobile, or data projects, their

Nordics, UK, US, and Caribbean markets

being straightforward with our clients,

example of their ability to align digital

primary focus is delivering secure

is a testament to their dedication to fos-

never making false promises or claim-

channel development with clients’

solutions to their customers. “We

tering and ensuring client relationships

ing to deliver beyond our capabilities.

needs, ultimately leading to success.

guarantee the confidentiality and

beyond engineering projects.

This applies to both product-related

integrity of the information entrusted to

aspects, such as going live or con-

Channeling the power of

us by our clients. Our commitment goes

ducting customer experience-related

agile methodologies

beyond securing data; it extends to

“We prioritize forming strong partner-

Sprintform has essentially integrated ag-

developing a comprehensive approach

ships with our clients. We fully own

ile methodologies into the foundation of

that addresses all potential risks and

the products, projects, and services

its operations. Besides facilitating trans-

vulnerabilities. With this approach, we

Leveraging collaborative synergy

we choose to collaborate on. This

Andras Berczeli

parent communication within the team,

can offer a trustworthy environment for

approach ensures a deep commitment

Managing Director, Sprintform

this has enabled them to be flexible and

both ourselves and our clients to foster

adaptable to changing customer needs.

long-term relationships based on trust

“This flexibility enables us to adjust our

and integrity,” affirms Andras.

and responsibility towards achieving successful outcomes. Importantly, a

70

Denmark’s growing fintech sector is drawing top talent to its rich expertise and forward-looking digital environment.

Attracting the Best Talents in Tech with Nordic Digital Prowess In the race to harness the potential of fintech, Denmark has emerged as a magnet for top-tier talent, offering a deep pool of expertise and a forward-thinking digital landscape. As companies like Public.com exemplify, the synergy between Nordic innovation and a balanced labour market makes Denmark an attractive alternative to traditional financial hubs.

By Jakob Frier

W

all Street might

banks are ahead of their American

immediately come to

counterparts in adopting and imple-

mind when one thinks of financial hubs.

menting digital technology.

elevate service delivery,” Malling says.

Such a forward-thinking approach makes the Nordic region an increas-

“Nordic banks have been quick to

ingly attractive location for tech inno-

However, if you shift your gaze across

digitize, and there’s a strong emphasis

vation, especially when juxtaposed

the Atlantic, Denmark is making signif-

on innovative strength lacking in Ameri-

against the more traditional banking

icant waves in digital banking. Accord-

can banks. Nordic banks are proactively

methods observed in the U.S.

ing to Jannick Malling, co-founder,

leveraging it to enhance operations,

and co-CEO of Public.com, Danish

optimize customer interactions, and

“We should give ourselves more credit for that since it makes

71

The Danish labour market seems practical, allowing companies to take risks with new hires and easily part ways if necessary.

Jannick Malling, co-founder, and co-CEO of Public.com

an attractive environment for tech workers. That is why part of our tech team is in Copenhagen,” Malling adds.

Address challenges with code Public strives to offer clarity, knowledge, and community in individual investment.

With headquarters and leadership based in New York, the firm has raised over 310 million USD in funding and has witnessed significant expansion in the past three years, predominantly in the U.S., but also a growing tech team of 39 employees in Copenhagen.

“We are a company that aims to operate with as few employees as possible. We need just the right number to fulfill our operations. Especially in the fintech sector, we don’t believe in having excessive operational and customer service staff like many of our larger competitors,” says Malling.

Malling underscores that Public values having a good number of engineers, but they don’t want to overstaff.

It’s about having the best individuals capable of tackling tasks through coding.

With the strategy to address challenges with code, the Danish labour market has some appealing aspects.

“In the U.S., for example, there’s the

Jannick Malling, Co-founder, and co-CEO, Public.com

concept of “at-will employment,” which allows employers to terminate employ-

Pushing to millions

products directly into the hands of these

ees without much notice. However, this

Malling believes that the quality of de-

vast user bases and seeing the tangible

carries legal risks in the U.S., where any-

velopers in Copenhagen is exceptional.

impacts of their work,” Malling says.

one can sue for almost any reason. So,

They observe that while the U.S. has a

employers end up dealing with sever-

more comprehensive yet more superfi-

of long-term commitment and pas-

ance contracts,” Malling says and adds:

cial talent pool because of mass recruit-

sion for one’s work, contrasting with

ment by major companies like Google

the highly competitive job market in

designed. The standard three-month

and Facebook, Copenhagen boasts a tal-

places like New York.

notice period for terminations where

ent pool that may be smaller in breadth

either party can end the employment

but is more profound in depth.

“In Denmark, the system feels better

Malling also experiences a mentality

“In the startup culture, where we can’t always compete with giants like Google

agreement is fair and flexible. The Dan-

“Finding and retaining the right talent

and Goldman Sachs in terms of salaries,

ish labour market seems practical, al-

is always a challenge. But with us, the tal-

you need employees committed to the

lowing companies to take risks with new

ents get the unique opportunity to work

work and the mission, not just their

hires and easily part ways if necessary.”

on an app with millions of users, pushing

paychecks,” says Malling.

72

Digital Wallet for Europe: A Leap Towards Integration or Cultural Clash of Practicality?

A digital wallet for all of Europe promises a more unified, accessible, and digital-ready EU. But its success hinges on a delicate balance between security, user experience, and seamless implementation. The coming years will determine whether the initiative transforms into a cornerstone of European integration or faces the hurdles of practical implementation.

By Jakob Frier

I

magine this common scenario. A Danish entrepreneur has built a thriving fintech startup in Copenhagen and has now identified a lucrative

investment in Estonia. To facilitate this investment, she wishes to open a bank

Roland Eichenauer Vice President of Business Development in Digital Identity and eID Solutions, Nets Group

travel to Estonia for face-to-face verification with the bank.

According to Eichenauer, the digital wallet is an opportunity for financial

However, this scenario may soon be

institutions to think of possible identi-

a thing of the past with the European

ty-based use cases that can generate

Digital Wallet

new value streams by expanding on cur-

When the European Commission

rent service offerings delivered today.

account in Estonia and needs to go

proposed introducing a unified digital

“Based on what’s achievable, the

through the KYC (Know Your Customer)

ID across the EU in 2021, the goal was

digital wallet has the potential to be

process. Today, she would need to pro-

ambitious: a coherent system for the

both cost-effective and environmentally

vide a plethora of documents to the Es-

public and private sectors. Fast forward

friendly. For users, it’s about conve-

tonian bank, often in paper format, such

to today, the dream of a pan-European

nience, enhanced experience, and

as proof of address, identity verification,

ID system is slowly taking shape.

maintaining control over one’s data.

business documents, and tax records.

“Potential benefits could be faster

Sharing electronic documents or select-

The verification process could be

and better onboarding and KYC pro-

ing identity details swiftly and securely is

lengthy because the Estonian bank

cesses, better customer data, and the

essential for digital life,” he adds.

might not immediately recognise or

digital wallet could even help accel-

trust foreign documents. They may need

erate a financial institution digitisation

Safeguarding citizens’ data

additional confirmations or translations.

journey,” says Roland Eichenauer, Vice

The vision of the European Digital

The back-and-forth could delay her

President of Business Development

Identity is to give EU citizens, resi-

investment opportunity, and she may

in Digital Identity and eID Solutions at

dents, and businesses the ability to

face additional translation expenses or

Nets Group.

authenticate themselves or confirm

Thomas Rysgaard Christiansen Partner, Netcompany

73

specific personal data. Every citizen

want to use it. Christiansen acknowl-

can access and use a personal digital

edges the risk of creating marginalised

wallet within the Union for various

areas if the solution is not user-friendly

online and offline services.

due to the high-security standards

The wallet, set to be initially devel-

mandated by the EU. “In Denmark, we experienced how

oped as a prototype by Netcompany and their consortium partner from

the transition to a new digital ID (re-

Sweden, Scytales AB, will be present-

ferring to EasyID to MyID) can lead to

ed to the countries of the EU and other

numerous issues if users struggle to

interested parties to help implement

understand and use it,” says Christian-

the stipulations of the Regulation for a

sen and continues:

European Digital Identity.

“Inequality exists in the digital realm.

Thomas Rysgaard Christiansen, part-

This is true both among the population

ner in Netcompany, sees a natural evolu-

and in the commercial sector. New

tion in how citizens receive their services,

businesses, for example, will require

moving towards the digital realm.

guidance and support to get started in

“This is evident in Scandinavia,

this digital landscape. The same applies

especially Denmark, both in the private

to citizens; alternative channels must

and public sectors. While in other

be available since not everyone can

countries, this shift might be more

navigate or benefit from these digital

pronounced in the private sector. But

services, and the states must carefully

when using digital IDs, these might be

consider these nuances during design.”

created by other entities, be it banks

Christiansen emphasises that these

or tech giants. This results in data that

projects are about 20 per cent technical

isn’t directly accessible to the users

and 80 per cent organisational, gover-

and might not be used in their best

nance, competency frameworks, and

interest. Hence, there’s a desire in

other related aspects.

Europe to have greater control over

“We provide equal access by simul-

personal data and decide who to share

taneously making it entirely open-

it with,” he says.

source and available to all. However,

Netcompany is developing a stan-

companies already proficient in digital

dard framework to ensure interoper-

services and data structure will natural-

ability across member states’ digital

ly lead in this area,” says Christiansen.

systems. By 2031, every EU citizen should be offered a digital ID compli-

Trust, Tech, Transition

ant with these standards. According

Leveraging a digital potential on such

to Christiansen, the goal is for at least

a scale presents a unique challenge.

80 per cent of EU citizens to use this

While Europe, across various countries,

digital ID actively.

has historically lagged in providing digital services to its citizens, transi-

“Having an ID recognised in 27 countries would simplify matters for

able to use their ID and certified doc-

sive opportunity for businesses that

tioning to more digital interaction isn’t a

individuals. Whether it’s for education,

uments to access financial institutions

are early adopters and can grasp the

straightforward process.

obtaining a loan, or making purchases,

outside their home country. The EU

emerging market, especially in the

having a universally recognised digital

aims to simplify opening a bank ac-

financial sector.

ID in Europe makes life significantly

count in any member state. In theory,

“Much like the evolution towards

a sentiment not uniformly shared

easier for EU citizens,” he says.

a Danish citizen should find it as easy

mobile banking, there might be a shift

across Europe. Even if robust digital

to open a bank account in Spain as a

towards providing services directly

services are introduced, there’s still the

local Spaniard,” says Christiansen.

within these digital wallets. Innova-

challenge of trust: will citizens accus-

New borders for early adopters

“In Scandinavia, there’s a high level of trust from the public in digital systems,

For Christiansen, the goal of the new

While Denmark is advanced in this

tive and forward-thinking players will

tomed to traditional methods believe

framework is to make cross-border

digital transition, other EU countries

harness these technological advance-

in the security of a digital space?” says

business more seamless, viewing

aren’t. This digital shift may have a

ments in expanding their market reach

Christiansen.

individuals as EU citizens rather than

more profound impact in other EU na-

and redefining their service delivery

national citizens. That will ultimately

tions than in Denmark, offering Danish

methods,” Christiansen says.

Denmark, are not easily achieved.

impact financial industries, revolution-

fintech businesses expanded oppor-

cultural rather than technical. Solutions

Cultural shifts, like those seen in “For me, the biggest challenges are

ising everything from service delivery

tunities. However, it also introduces

Digital A-team and B-team

to processes like securing bank loans

heightened competition, making

While there’s a requirement to make

will emerge for technical issues, but

using digital and certified documents

business with Danish consumers more

the system available to citizens by the

gaining widespread trust and uniformity

and income statements.

accessible to others and vice versa.

member states, it doesn’t guarantee its

across countries remains to be seen,”

The digital wallet presents a mas-

use. If it’s too cumbersome, no one will

concludes Christiansen.

“In essence, individuals should be

74

Salv: To beat financial crime, you need to collaborate Salv’s real-time platform for fighting financial crime enables productive collaboration and improves the exchange of information.

private institutions to communicate with each other effectively. Thirdly, developing user-friendly software enables manual and automated encrypted message exchange. This software allows individuals and machines to share information securely, complete with comprehensive manuals and support, “ adds Tamkivi.

Supercharging banks’ fraud reduction efforts Salv has been actively collaborating with Nordic and Scandinavian banks for the past two years. During this time, these banks have utilized their platform and community to great effect. By exchanging information about potential criminals and how stolen funds move between banks, there has been a promising reduction in scams and frauds.

“Previously, when a bank’s anti-money laundering (AML) crime-fighting team

By Marria Qibtia Sikandar Nagra

F

identified a customer as a victim of fraud,

tomated push payment (APP)

the cases. However, after implementing

fraud, as seen in the UK alone, where

our Salv Bridge messaging platform and

victims lost half a billion pounds to this

pursuing funds through these messages,

crime last year. Amid this grave reality,

the rate of reclaiming money increased

financial institutions face the challenge

to an impressive 80%. This remarkable

of preventing such fraudulent activities-

success has resulted in the recovery

aren’t only embroiled in a reputational

of millions of dollars, potentially tens of

risk. Still, they are also being held finan-

millions,” affirms Tamkivi.

they would send messages to other

inancially developed countries

banks involved in the transaction, re-

are susceptible to the rise of

questing a halt to funds progression. This

financial crime, especially au-

only resulted in retrieving funds in 10% of

It is also worth noting that banks can

cially liable for reimbursing the victims,

promptly translate this success rate into

hence increasing their costs.

A deep dive reveals that the collab-

reduced costs when they become finan-

oration gap between fintech and banks

cially liable for these losses. Banks can

is at the core of this issue. This enables

mitigate financial burdens and protect

criminals to exploit the divide and

their customers by effectively combating

leverage multiple institutions, including

fraud and reclaiming funds.

crypto spaces to their advantage. This is where Salv comes through. It seeks

Enabling Dynamic Monitoring with

to address this problem by resolving

Advanced Schemas

the gaps and ensuring a more secure

Besides sanction screening capabilities,

financial ecosystem. ”We provide the necessary tools for efficient monitoring

Taavi Tamkivi, Founder and CEO of Salv

and analysis to empower financial insti-

Salv’s product portfolio encompasses transaction and customer-monitoring products. And in doing that, they offer swift verifications, data analysis, and

tutions to keep up with the complexi-

adaptability necessary in dynamic

ties of the modern financial ecosystem

against financial crime. While money

successful Fin-crime fighting- “Firstly,

to stay ahead in the fight against

moves within these networks, critical

we believe in fostering a community that

settings. “Our unique offering allows

financial crime,” shares Taavi Tamkivi,

information about potential criminal

brings together crime-fighting profes-

human operators to control the checks,

Founder and CEO of Salv.

activity often remains isolated. Salv

sionals within and across organizations,

enabling them to process intricate

addresses this obstacle by creating an

establishing trust, and encouraging

payment structures and complex KYC

environment that facilitates real-time in-

collaboration. Secondly, establishing

information accompanying the evolving

information sharing

formation exchange between anti-fraud

agreed-upon standards for data formats,

landscape of financial technologies.

Rapid information exchange among

and anti-money laundering teams within

legal frameworks, data controllers,

Flexibility, speed, and configurability are

network members and financial institu-

and between financial institutions.

privacy requirements, and more. These

our core strengths, setting us apart in

tions stands at the heart of a robust fight

It advances three core pillars for

standards allow different public and

the market,” concludes Tamkivi.

Preventing criminal money through

75

DECTA’s Off-The-Shelf Banking Platform Lets You Start a Digital Bank in Months All you need are the financial licences. The Digital Banking Platform takes care of the rest.

By R. Paulo Delgado

W

istically enter the competitive arena

these solutions with legacy systems be-

alongside established players like

cause there’s no one-size-fits-all option

Revolut, Starling, or Monzo as soon as

for them,” Belis says. “What many incum-

tomorrow,” says Belis.

bents are doing now is creating sub-enti-

He tells NFM that it usually takes up

ties with their own assets and P&L sheets.

to three hours to introduce the platform

In these greenfield situations, we’re a lot

at demos. A short article describing it

freer to navigate and be agile.”

barely scratches the surface.

hen DECTA’s CTO,

But DECTA is fully prepared internally

Aivars Belis, decided

The solution includes built-in cus-

to serve in both greenfield and brown-

to develop a full-scale

tomer service through chat, and allows

field scenarios, and has the resources

Digital Banking Plat-

companies to plug in their own AI-pow-

to scale its offering for projects of any

ered chatbots if desired.

size, legacy or not.

Possibly the only real solution for

DECTA handles the “tech” part of fintech

incumbents to go digital fast enough

DECTA’s extensive and specialist ex-

After 15 years of beating the drum for

pertise as a SaaS vendor in the finan-

digital, many incumbents still lag be-

cial services niche gives the company

hind while things get easier for fintechs

an edge, allowing it to create solutions

whose fundamental structures were

that are typically more polished than

built in a new age.

those created by newer companies

form, the idea was not to reinvent the wheel, but instead to integrate every required service necessary to let companies launch a digital financial services solution quickly.

All you need is your financial licence.

DECTA is marketing the platform to any entity interested in providing an integrated financial offering, not only fintechs.

This includes telecoms, major corporations, or even smaller businesses.

You could realistically enter the competitive arena alongside established players like Revolut, Starling, or Monzo as soon as tomorrow.

Aivars Belis, CTO of DECTA

Creating a new system from scratch also isn’t feasible.

In a race where the odds are already

“We set out to create a holistic solu-

in-house. The digital banking platform solution’s strengths include scalability, availability, and security, all of it provid-

tion for our end customers, determined

and even less for private customers,

stacked against them, a solution like

ed under the umbrella of guaranteed

to steer clear of vendor lock-in,” says

wherever feasible.” All onboarding is

DECTA’s Digital Banking Platform might

SLAs, with a 24/7 team that monitors

Belis. “Our platform allows clients to

done completely online without any

be the only realistic chance incumbents

and maintains it.

seamlessly integrate their own front-

need to visit a physical branch.

have of catching up to the fintechs

ends through our API, expand the

In certain jurisdictions, 30-minute KYC

solution’s back-end with their services,

might not occur until there are regulato-

or harness the benefits of our pre-built

ry changes. However, DECTA’s platform

front-end.”

makes it technologically possible.

And all of it is white-labelled.

Just one of the core elements the

Upon successfully completing the onboarding process, the end customer

platform simplifies is customer onboard-

gains immediate access to the plat-

ing, including KYC and AML checks.

form’s comprehensive banking services.

“AML and KYC are some of the heaviest

This includes opening accounts and

and most expensive aspects of building

payment cards, transferring money, and

a financial product,” says Belis, whose

managing e-commerce and point-of-

experience in financial services spans

sale businesses using DECTA’s mobile

over 25 years, both in the customer

and web applications..

and vendor side. “Our objective was to minimise the onboarding process to a maximum of 30 minutes for legal entities

Companies don’t need to enable all of it, but they’re all available.

“With our platform, you could real-

already far ahead in the game.

“It’s more challenging to implement

By letting DECTA focus on the “tech,” fintechs are freer to innovate on the “fin” side.

76

Alior Bank: Winning Through an InnovationFirst Approach Born amidst the 2008 financial crisis and now one of the largest banks in Poland by number of customers, Alior Bank sets the pace for agile innovation.

By R. Paulo Delgado

P

oland’s 30-year-old banking

using a locally developed system

er’s first point of contact when they call the

sector has an unexpected

called BLIK, a joint venture from six of

bank. If InfoNina can’t help them, the bot

advantage over more mature

the country’s banks to allow customers

sends the customer to a human rep.

markets. It was born in the

to pay with a mobile phone using a

1990s and therefore is unhindered by

unique numeric code.

But InfoNina is far more than a call operator. It also proactively calls

the legacy infrastructure that impedes

Payment services such as Google

customers if any of their information on

more traditional institutions on their

Pay and Apple Pay were old news in

record isn’t accurate or needs updating.

journey to becoming truly agile.

Poland before they even hit the market.

To make daily life easier for cus-

In fact, Polish buyers dislike paying

tomers, Alior also implemented a bill

crucible of the 2008 financial crisis.

by credit card because it takes too long

consolidation service called BillTech

Its innovation-first attitude not only

to type in credit card details. BLIK is

into their mobile app so that customers

allowed the startup to survive the crisis,

faster and easier.

can pay all their bills easily.

Alior Bank was formed during the

but it eventually became one of the

The Polish BLIK system became

It was also one of only two banks in

Warsaw Stock Exchange’s 20 largest

so popular that Mastercard ultimately

Poland to implement a deferred pay-

companies. Today, Alior Bank is one

became a shareholder, describing it as

ments solution for its customers.

of the largest banks in Poland. It has 4

a “best-in-class experience” for con-

million customers, and 1 million of them

sumers in contactless payments.

use its mobile app.

The innovation lab that makes it all possible

PZU SA, Poland’s largest insurer,

Innovation first: Alior’s block-

Alior’s innovation lab is where all the

bought a large stake in the bank in 2015,

chain-based “durable medium,” an AI

magic happens. “Compared to other

enabling Alior to expand its innovative

voicebot, deferred payments and more

labs on the market, our lab is quite large

efforts even further.

In the advanced Polish ecosystem, Alior

and spans a wide scope of competen-

The Nordic market has big ambitions and excellent technological skills. The Nordics continues to produce interesting solutions, which is why we’re eager to be at Nordic Fintech Week and learn what’s happening there.

Kamila Wincenciak, Head of Innovation and Fintech Partnership at Alior Bank

partnerships.

“We don’t have a fixed system

Bank has no other choice but to innovate

cies including UX design, customer

on how we prefer to innovate,” says

Poland’s consumers are ahead of the time

if it wants to remain relevant. As such, the

research, open banking, fintech scouting

Wincenciak. “Our fintech partnerships

By the time Open Banking came

bank has unleashed a volley of innova-

or remote processes development,” says

team will always scout for anything al-

tions in the last few years.

Kamila Wincenciak, Head of Innovation

ready existing in the market, but we’re

For example, in response to the EU’s

and Fintech Partnership at Alior Bank.

also comfortable developing some-

requirement to store terms, tariffs, and

Her department alone has nearly

thing completely in-house because of

pricing tables on a “durable medium”

50 people in. This year, Global Finance

our team’s advanced competencies.

such as paper, Alior unveiled a document

Magazine awarded Alior Lab—for the

We choose the route that makes the

authentication feature built on top of the

second time—as being one of 25 best

most sense for each innovation.”

public Ethereum blockchain.

financial innovation labs in the world.

around, Polish purchasers were already long-accustomed to quick payments

Kamila Wincenciak Head of Innovation and Fintech Partnership, Alior Bank

Alior has already worked with several

In 2021, it launched an AI voice assistant

The lab is divided up into five teams,

Nordic fintechs and has interests in

with the name InfoNina which is a custom-

one of which focuses solely on fintech

further exploring the zone’s potential.

77

various components and 3rd party of-

The Tuum Advantage: Rich functionality and tailored solutions for diverse markets

ferings that form an extensive ecosys-

At its core, Tuum aims to liberate banks by enabling them to swiftly and securely replace their outdated systems, reduce maintenance costs, and unlock new opportunities in the digital realm.

ments in the declared market segments,

tem. “It is built to be natively deployed on public Cloud providers, with an agnostic view towards providers like Azure, AWS, Google, and Oracle.

Additionally, we have an OpenStack model that enables deployment on multi-cloud environments and even private clouds in some instances to meet data residency requirements, such as in Saudi Arabia and Egypt.

To facilitate integration, we have a developer portal where users can access the full range of our APIs,” adds Caballero. Through these partnerships, clients can easily integrate and deploy their solutions, creating a flexible and decoupled architecture that accelerates their time to market.

Scalable Platform Capabilities Tuum’s focus revolves around core banking, lending, payments, and card management, with these modules consistently updated to meet client requireincluding Europe, the UK, and the Middle East. As Tuum expands into new markets like Latin America, the platform is carefully tailored to meet regional requirements before entry. Microservice code enables efficient maintenance of clients’ installed

By Marria Qibtia Sikandar Nagra

I

base, ensuring backward compatibil-

itself and secure significant projects. Tu-

setting up necessary configurations

um’s selection as the core infrastructure

before the migration process begins. This

provider for all of LHV UK’s financial op-

proactive method minimizes the chances

erations involving 200 client companies

of any complications arising during the

and 10 million end customers globally is

migration phase,” shares Caballero.

ity and smooth migration processes.

n the highly competitive financial ser-

“Tuum takes pride in the scalability of its

vices industry, it requires more than

platform, allowing it to handle increasing

a stroke of luck for a relatively new

demands seamlessly. With a configu-

digital banking company to establish

ration-first approach, Tuum prioritizes

a testament to its ability to offer seamClient-Centric Culture

less, tailored financial services.

Cultural alignment between your

“What sets Tuum apart is its rich functionality beyond traditional core banking,

organization and the chosen partner must

offering a payment engine with transac-

be strong to implement core banking systems successfully. Since projects often

tional capabilities and a card manage-

have ups and downs, culture plays a

ment system right from the start. This

cessfully migrating legacy systems in

client base. “By consistently updating the

versatility allows Tuum to serve a wide

banking institutions, banking as service

core on a single source code basis, Tuum

significant role in deployment. “At Tuum,

market segment, not only fuelling retail

providers, and Fintech companies,”

ensures that functional requirements are

we take pride in our culture, treating our

and greenfield projects but also suc-

reveals Edgardo Torres Caballero, Chief

consistently met, addressing the frustra-

clients as part of our family. We believe

Revenue Officer at Tuum.

tions often experienced by clients using

that their success is our success, and we

the legacy systems,” shares Caballero.

prioritize their satisfaction. You can think of

Edgardo Torres Caballero Chief Revenue Officer, Tuum

it as our end goal to form sustainable

Leveraging Single Source Code One of Tuum’s key advantages is the

Extensible API Ecosystem

relationships through effectual delivery of

utilization of a single source code. This

Tuum’s platform is designed with

our services so that our clients can focus

approach allows for continuous updates

modernity in mind and is API-first,

on innovating and creating value for their

and releases encompassing the entire

allowing for seamless integration with

customers, “ concludes Caballero.

78

Competition distortion hampers international growth for the Danish Fintech environment Fundamentally, the Danish Fintech environment is thriving. Innovation and creativity are giving rise to many new and exciting companies, but outdated legislation is hampering growth opportunities and further job creation.

By Henrik Malmgreen

Fintech companies aren’t

example, sandbox environments as a

Steen Lund Olsen also calls for a more

competing with nor

way for budding companies to exper-

targeted effort and higher ambitions

carrying the same risks as

iment and practice while testing their

into improving the possibility of recruit-

banks. They’re mostly

solutions and growing their business.

ing international talents and higher

competing with other Fintech compa-

ambitions when it comes to a national

nies abroad. Therefore, it’s not reason-

The need for an ambitious

strategy for competence development,

able that they are subjected to the

national strategy

both in terms of retaining Danish talent

strictest regulation in any sector and

“In the middle of August, the Minister for

and attracting foreign talent.

parts of the world as the well-estab-

Industry, Business and Financial Affairs,

lished banks. Regulation and legislative

Morten Bødskov, visited Copenhagen

Made with ethics: A Danish

framework should be nuanced so that

Fintech, where we discussed that Den-

competitive advantage

a start-up in the Fintech environment

mark is much more than wind, pigs, and

“Danish fintech and finance is already

doesn’t have to struggle with the heavy

insulin. If we’re going to be able to create

known for high ethics and responsibil-

legal burden and special taxation like

strong, large, well-operated companies

ity. It’s a brand we can use to market

the payroll taxes from day one as

within Fintech, and if the political stand-

ourselves in an international setting, and

Fintech companies abroad are not. “

point is indeed that we’re good at it, then

Danish standards in the field are world

says Steen Lund Olsen, Deputy

I honestly think there could be more

class and a strong competitive advan-

Chairman of Finansforbundet.

action behind the words, when it comes

tage, that we need to utilize. “Made in

to support the companies as they grow”

Denmark” could become synonymous

Steen Lund Olsen continues.

with Danish digital solutions that are

In other words, he believes that despite the government designating the Fintech environment as a Danish

Although Denmark has several

strength, the need for further improv-

success stories in the Fintech environ-

commitment from all sides to really

ing the conditions for Danish Fintech

ment, such as Pleo and Lunar, he looks

create and benefit from this rather unique

start-ups is urgent. One way to address

somewhat enviously at what’s happen-

position. So, there’s a significant task in

this, in his view, would be to increase

ing beyond the country’s borders in

developing and strengthening the Danish

competitiveness. He thinks that being a

terms of growth companies. Moreover,

Fintech environment in a way that gives

start-up in Denmark is too complicated,

if a start-up does succeed in bringing

companies the best possible conditions

and he would like to see more lenient

a solution to market, the challenge is

to grow strong in Denmark, backing

political winds blowing over the Danish

also to find the right skills for continued

them sufficiently to participate in global

Fintech environment. He suggests, for

operation and development. Therefore,

competition, export their solutions and

“Made with Ethics”, but it takes a serious

Steen Lund Olsen Deputy Chairman of Finansforbundet

79

face between innovation, IT, digitization, and finance. That’s what truly defines the new possibilities.

“We, in Finansforbundet, need to be attentive to and address the skills our members need moving forward, and we are also profoundly committed to help developing the Fintech community, attract skilled labor and creating new, sustainable jobs in a constantly evolving financial sector and growth for our society. This is one of the reasons we initiated Copenhagen Fintech and why we in Finansforbundet entered into a framework agreement with the Employers’ Association for Fintech in Denmark two years ago. It was the first of its kind in the world at that time and led to UNI Global Union, an international federation of trade unions, awarding Finansforbundetthe Breaking Through Award of the year,” explains Steen Lund Olsen.

Strengthening the intersection between tech and finance The initiatives are, of course, intended

In August, Minister for Industry, Business and Financial Affairs, Morten Bødskov, visited Copenhagen Fintech. Here he is seen with Thomas Krogh Jensen, CEO of Copenhagen Fintech, and Steen Lund Olsen, Deputy Chairman of Finansforbundet. During the meeting, a clear request was conveyed to the minister to take a more nuanced approach to the financial sector for the benefit of the Fintech environment.

to support efforts to create an eco-system that create innovation, jobs, and economic growth for the benefit of society. It has also led to Copenhagen Fintech becoming a member of the Employers’ Association for Fintech and, here in September, renewal of the

Photo: Claus Bech

initial collective framework agreement between Finansforbundet and the Emretain their headquarters on Danish soil,” Steen Lund Olsen elaborates.

Denmark is, of course, not the only country in the world where Fintech has been designated as a strength. It’s the case in places like Singapore as well, but Steen Lund Olsen points out that they’ve approached things in a completely different way. There, they strategically work on utilizing competencies in the best possible way and strategize how to use technology for the benefit of society. Considering that Denmark can boast being one of the most digitized societies in the world, he believes that as a society, we have access to low-hanging fruits that we just need to grasp, including the possibilities in

New entrepreneurship strategy is on the way When Minister for Industry, Business and Financial Affairs, Morten Bødskov, visited Copenhagen Fintech in August, he mentioned that the government plans to present a new entrepreneurship strategy during the second half of 2023. 300 million DKK have been allocated for this purpose, but according to the minister, there will be a tough prioritization in efforts to accommodate the many different recommendations and advice from the industry. However, it’s clear that finance and Fintech have been designated as a Danish strength, which means an area that has special importance for the Danish economy.

“I’ve followed Copenhagen Fintech for several years. In many ways, it’s an archetype of how, around significant activities in Danish society, you can build ecosystems that can help us retain jobs in Denmark and ensure that we innovate and develop Danish strengths,” the minister said during the event. However, praising words alone aren’t enough. Good framework conditions are needed if the growth story is to continue on Danish soil. Additionally, efforts should be made to ensure fair competition and employment conditions as much as possible. This benefits both companies and employees, as well as society as a whole.

public-private collaborations.

ployers’ Association for Fintech. Since the inception of Copenhagen Fintech in 2016, the ecosystem in Denmark has grown explosively, with over 4,000 employees in Fintech start-ups. This is in addition to more established financial technology companies.

“So, we need to contribute to nursing the intersection between tech and finance, but as the political and legislative situation stands now, we’re losing companies to foreign countries as they grow larger, and it’s simply due to a distorted competitive situation. In Finansforbundet, we have a pronounced wish for a more nuanced understanding of the financial sector and Fintech. As it stands now, all companies related to finance are

innovative start-ups as a threat to the

and increasing competitiveness. They

subjected to the same requirements,

A completely new interface changes

established financial sector. However,

also offer the opportunity to provide

and that can be particularly challenging

the financial sector

that hasn’t proven to be the case. On

customers - consumers - with new,

for small companies that operate

When Fintech began to emerge as

the contrary, these companies are

personalized services. The significant

digitally on a global market to meet,”

a serious concept, some viewed the

strengthening the financial sector

revelation in this context is a new inter-

Steen Lund Olsen concludes.

80

High-Performance Payments: The Hidden Billion-Dollar Opportunity Businesses are losing out on between 1.5% and 2.2% of their revenues due to suboptimal payments acceptance, according to research done in partnership between Oxford Economics and Checkout.com. This suggests a company earning $1 billion annually could have lost as much as $22 million to false declines alone in 2022. The scale of this loss is even more dramatic for those larger enterprises with $100 billion in revenue—they’re looking at a staggering $2.2 billion loss.

By checkout.com

S

o, while consumers are in-

ecommerce businesses. Our research

is, the more chances higher the likelihood

creasingly taking advantage of

reveals a concerning trend—45% of con-

of encountering payment failures leading

the perks of online shopping,

sumers will not retry after one false de-

to false declines.

we’re seeing a disproportion-

cline, choosing to transfer their business

But, there is an opportunity to

ate rise in false declines—This surge

to a competitor. Consequently, business-

reduce this complexity. With the right

means businesses are losing out on a

es lose out on legitimate customers after

technology and increased transpar-

golden opportunity to boost their rev-

having done the hard yards of customer

ency into the payments processes,

enue. Even one false decline can now

acquisition—the cost of which has risen

businesses can identify and rectify the

lead customers to abandon a site, which

by over 220% in the last decade.

issues leading to false declines, there-

results in a significant loss of loyalty and

The amount of money being lost to

by optimizing their revenue. To achieve

revenue. This impact isn’t exclusive to

competitors following a single false

this, businesses need the ability to

any one player—it’s felt across the board,

decline has grown by 300% in the US

fine-tune each step of the process and

from small retailers to large enterprises.

compared to three years ago, putting

the agility to adapt to changes as com-

Progressive CFOs are seeing the ben-

$35 billion directly into the pockets of

plexity continues to evolve.

efit of turning to payments as a strategic

competitor websites or apps from the

tool, particularly in today’s challenging

total $50.7 billion lost to false declines.

High-performance payments are the

economic climate. By optimizing their

Rami Josef, Product Director for

payments these businesses are not just

Payment Performance and Authenti-

Complexity in the ecosystem is inevitable,

navigating tough times, they are gaining

cation at Checkout.com, suggests that

but sub-optimal payments needn’t be.

a competitive advantage.

the very pace and magnitude of online

Our research indicates that an

commerce and payments expansion

increasing number of CFOs and their

The false declines epidemic and the

have led to a complexity in payments.

teams recognize the strategic potential

rise of the savvy consumer

This complexity is intensified by elements

of payments and their influence on rev-

False declines— where legitimate pay-

such as a surge in cross-border shopping

enue growth. They’re eager to enhance

ment methods are mistakenly reject-

and new, divergent rules from schemes

their payments performance, not mere-

ed—are emerging as a serious issue for

and issuers. The more complexity there

ly to recover losses, but also to grasp

CFO’s competitive incentive

81

45% of consumers will not retry after one false decline

Among CFOs

60% count upcoming payments regulation as a primary concern

the potential for heightened profit-

This requires understanding the scale

ability. These businesses are the ones

of the revenue opportunity linked to

that know there is latent opportunity in

optimized acceptance rates, being

their payments and other businesses

aware of how much is lost to rivals with

will be wise to emulate.

superior acceptance rates, and moni-

However, seizing this opportunity requires a shift in mindset. Payments, tra-

toring these metrics over time.

The potential for businesses to

ditionally seen as a mere cost-center,

transform their payments performance

can be transformed into a revenue and

and significantly boost their perfor-

value driver with the correct approach.

mance is considerable. As the digital

To achieve this, every stage of the pay-

payments landscape evolves, those

ments process needs to be optimized.

who recognize the strategic potential

For example, appropriate APMs, access

of payments will be in a prime position

to local acquiring banks, and a dynamic

to seize these opportunities and gain a

response to SCA and Network Token

competitive advantage.

requirements can all result in lower

Among CFOs, 60% count upcom-

costs, lower fraud, fewer false declines,

ing payments regulation as a primary

and happier customers.

concern, 68% are apprehensive about

And, when these optimizations have

improving their payments acceptance

been successfully carried out, each

rates, and 51% are worried about how

transaction will yield more return,

adverse macroeconomic trends might

cumulatively leading to a substantial

affect their operations. Interesting-

boost in revenue.. Payment perfor-

ly 67% of Heads of Payments have

mance should align with business

board-level backing for the strategic

strategy to prevent the unnecessary

importance of payments.

revenue leak and to win back business from competitors.

The quest for high performance

With this in mind, the strategic potential of payments can’t be over-

68%

are apprehensive about improving their payments acceptance rates

51%

are worried about how adverse macroeconomic trends might affect their operations

Source: The data, sourced from surveys of over 1,500 medium to large enterprise merchants and 8,000 consumers in collaboration with Oxford Economics.

merchants and 8,000 consumers in collaboration with Oxford Economics.

If you want to gain further insights

looked in today’s highly competitive

into how false declines might be

market with razor-thin margins.

impacting your profit margins, speak to the team and get your copy of the

payments The objective, therefore, is to close the

The data, sourced from surveys of

full report at Nordic Fintech Week

strategy-performance gap in payments.

over 1,500 medium to large enterprise

from Checkout.com’s booth.

Nordic Fintech Week 2023 TAP1 | Copenhagen | Sept 27th-28th www.nfweek.com Brought to you by Copenhagen Fintech & Nordic Fintech Magazine