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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 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.
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!
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
Age of Disruption, The Only Constant
Amplifying Impact: Visa and Rocker Join Forces to Offer Revolutionary Customer-Centric Banking Solutions
Challenging the Nordic Narrative on Fintech
Fintech’s Digital Dance: Revolutionizing E-Commerce, Entertainment, And Trust
Worldline’s Omnichannel Solution: Empowering Small Merchants in The Nordics
Efficiency, Reliability, And Innovation: Focalpay’s Integrated Platform Redefines Merchant Payments
European Expansion Relies on An Innovative Nordic Fintech Environment
Flatpay and Finaro: A Partnership to Change the Payment Landscape in Denmark and Europe
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
Copytrader: A New Era in Investing
Open Banking Takes the Wheel: Neonomics and Spense Supercharge Automotive Payments
How Normative Is Helping Businesses Lead the Way in Sustainable Finance
Banking’s Evolution: Real Innovation or Illusion?
Bridging Markets for Inclusive Finance: Inpay’s Approach to Financial Empowerment
How Payment Cards Enable Equality, Empowerment, And Scientific Innovation
BNPL Boom: A Financial Revolution or A Debt Trap
How Ai Company 2021.Ai Empowers Responsible Ai Use Across Industries
Achieving Win-Win Outcomes: Sprintform’s Digital Solutions Redefine Success Beyond ZeroSum
Attracting the Best Talents in Tech with Nordic Digital Prowess
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
Alior Bank: Winning Through an Innovation-First Approach
The Tuum Advantage: Rich Functionality and Tailored Solutions for Diverse Markets
Competition Distortion Hampers International Growth for The Danish Fintech Environment
High-Performance Payments: The Hidden Billion-Dollar Opportunity
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
Editorial
Chris Crespo Head of Content at Nordic Fintech Magazine
This year is a continuation of the unprecedented challenges markets around the world
continue to face, reminding us of our increasing reliance on digital technologies. Yet, it is times like these that
also underscored how technology 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 force we must adapt to and learn to master if we are to continue thriving in this ever-evolving landscape. Welcome to Nordic Fintech Week 2023—where the future unfolds today.
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 NagraSo, we got into a conversation with Andreas Norberg, VP of Product at Rocker, and Fredrik Lindquist, Country Manager Visa Sweden to uncover the driving motivations behind this strategic collaboration and how it is propelling both companies to the forefront of the Fintech revolution.
Andreas, could you begin by expanding a bit on Rocker’s vision and mission and how it positions itself uniquely in the market with its value proposition?
At the core of our business mission, we aim to leverage cutting-edge
technologies to provide our customers with user-friendly and cost-effective products. We strive to empower them by giving them the right tools for their finances. They may find it cumbersome at first similar to when they start a new exercise regimen but we are here to provide guidance and ignite their interest in the economy and the potential impact it has on their lives. We believe that open banking presents a revolution in the banking industry. While the best product hasn’t been developed yet, we anticipate a similar transformative impact as seen in other industries with companies like Uber in the taxi industry, Airbnb in the
hotel industry, and Spotify in the music industry. Our goal is to provide innovative products and to achieve this we rely on excellent partners who share in our vision.
What were the challenges you encountered before partnering with Visa and what were the obstacles you sought to overcome through this collaboration?
For us, one of the main challenges was our limited understanding of the payment landscape and how it operates. While we had previously worked with Visa as a third party, this closer partnership has significantly enhanced our
Andreas Norberg VP of Product at Rocker
comprehension of what we can achieve and the innovative solutions we can offer. Collaborating closely with VISA has opened numerous opportunities for us to improve and provide more cost-effective and cutting-edge products to our customers.
What specific benefits have you observed as a result of your partnership with Visa?
Our main goal was to gain a deeper understanding of how Visa, being such a prominent company, operates and to see if working with them is as easy as it seems. Initially, we had the expectation that they would function like traditional banks, which can be quite cumbersome. However, our experience with Visa has been completely different. Throughout the entire summer, which is not typical in Sweden where we usually enjoy five weeks of vacation time due to limited holidays, we have actively collaborated with them on all our products. This has been an incredible experience for us.
This stage of collaboration has provided us with invaluable insights and learnings. We now have absolute confidence in Visa and eagerly anticipate what we can achieve together in the upcoming autumn season and beyond.
Did you encounter any specific challenges in establishing this partnership, particularly considering the differences in culture, vision, and working methods between Rocker and Visa?
Yes, I believe both Visa and Rocker have successfully adapted to each other’s differences. In the initial stages, there were noticeable cultural disparities between the two organizations. For instance, Visa utilizes a significant number of abbreviations and internal terms which presented a challenge initially. However, once we became acquainted with these terms and abbreviations, we were able to quickly familiarize ourselves and integrate smoothly. I must say, that I have personally gained an immense amount of knowledge and experience within a remarkably short period of time.
How has the partnership between Rocker and Visa contributed to Rocker’s overall vision and business
strategy? Have you observed any notable differences or impacts resulting from this collaboration in terms of your strategic approach?
Certainly, prior to the partnership, our understanding of customer payment methods and opportunities was limited. We could only speculate about the available possibilities. However, since establishing this close partnership with Visa, we have gained access to a wealth of information. This has sparked numerous ideas for innovation in our product offerings and has allowed us to provide a superior card experience for our customers. So yeah, the direct partnership with VISA has been instrumental in expanding our knowledge and insights.
Fredrik, we are all familiar with Visa as a prominent global digital payment provider, facilitating transactions among customers, financial institutions, and government entities across 200 countries. However, I am curious to hear your thoughts on VISA’s broader philosophy and vision. From your standpoint, what principles and aspirations define Visa’s identity and purpose?
Visa’s overarching vision is to uplift individuals and communities everywhere by facilitating convenient and secure payment solutions. Our approach involves fostering inclusive and sustainable economies through the establishment of an extensive infrastructure network. By ensuring broad accessibility, we enable companies to innovate and thrive, promoting inclusivity and driving the utilization of this infrastructure for innovative purposes.
What is Visa’s philosophy about partnering with other players in the ecosystem?
Certainly, when considering partnerships, Visa upholds a robust ecosystem that emphasizes standards and resilience. We conduct due diligence on all potential partners to ensure they align with our measures and ethical guidelines. This applies to sourcing providers who assist us in delivering our services, as well as businesses we onboard. Inclusivity is a key focus for us,
as we strive to provide access to our network and fuel innovation through collaboration. When conducting due diligence, we take into account various factors, including the nature of the partner, whether they are a financial institution, fintech, or a payment service provider The evaluation process involves assessing risks, environmental impact, and overall compatibility of a company with our standards, While the specific requirements may vary, Visa maintains rigorous standards across all types of businesses we onboard.
What were the key factors that influenced your decision to partner with Rocker?
Partnering with Rocker feels like a natural step for us. We collaborate with numerous Fintech’s on a daily basis and onboard various businesses to fuel innovation within our network. As a Fintech and payments technology company, it is crucial for us to onboard entities like Rocker and support their innovative ideas. We’re truly invested in the Fintech sector and want to be a part of driving its growth and success. So, partnering with Rocker was a no-brainer.
How has this partnership contributed to Visa’s overall mission?
I feel this partnership has been instrumental in helping Visa fulfill its core philosophy and vision. We have a strong belief in uplifting everyone and creating an inclusive environment in our network and ecosystem. By adding partners like Rocker, we continuously develop and introduce new experiences. We have also gained valuable insights that other Fintechs can learn from. I also believe that it’s not a one-on-one interaction. It’s a collaborative effort across teams and people. We have also seen the positive impact of leveraging the knowledge, experience, and processes within Visa. It has been a game-changer in onboarding clients and executing projects successfully.
Overall, I would say, our partnership with Rocker has been a remarkable journey. We’re thrilled to support them and contribute to their growth, while also advocating our own mission. Together, we’re making a difference in the Fintech landscape and paving the way for future innovations.
Fredrik Lindquist Country Manager Visa Sweden By Jakob FrierIn 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.
To address the prevailing narrative about the Nordic region, we discussed with Sopnendu Mohanty, Chief FinTech Officer of the Monetary Authority of Singapore, presenting four theories for discussion.
Hypothesis 1
The Nordics stand as one of the most digitally advanced regions globally, providing us with a distinctive competitive edge, particularly in fintech.
Hypothesis 2
The Nordics rank among the world’s most sustainable nations, a quality reflected in the developed fintech solutions.
Hypothesis 3
The Nordic countries are among the world’s most innovative nations, and the size of our domestic markets enables us to think globally from an early stage.
Hypothesis 4
The Nordics are globally recognized as hubs of innovation, and the size of our local markets gives us the insight
to consider global expansion from the beginning.
Mohanty has over 20 years of experience in technology and finance across both public and private sectors. He’s instrumental in launching initiatives like Proxtera, PayNow, Project Ubin, API Exchange (APIX) and the Singapore FinTech Festival while advising global bodies on Fintech and Inclusion.
Thomas Krogh Jensen (TKJ): Is it accurate to say that the Nordics are among the most digitally advanced regions worldwide, and does this confer a distinctive competitive advantage to us, especially in the fintech sector?
Sopnendu Mohanty (SM): “People often view the Nordics as highly digitalized, judging from their move towards a cashless society. Cashless signifies a high level of digital engagement with the community and a robust usage of digital platforms for transactions. This is an achievement the Nordic countries should take pride in.”
“This gives them a significant edge in crafting products relating to digital services. The essence of their product
design inherently leans towards being intuitive, simple, and deeply focused on the consumers.”
“This leads me to another observation. Despite the pronounced digital consciousness and liberal, open-minded society, the Nordic region’s public digital infrastructure in financial services is not pervasive. If I’m correct, most of their digital payment systems are predominantly bank-driven and not a public infrastructure. Comparing this to India, with its ‘India Stack’ or Aadhaar Stack, many transactions in India go through a streamlined set of APIs. Due to the scalable and efficient public infrastructure, businesses in India can start operations within days.”
“In the context of public digital infrastructure, the Nordics wouldn’t be my first thought. However, the Nordics undoubtedly excel and stand out when discussing private sector-driven digital evolution and collaborative initiatives.”
TKJ: What is your perspective on the claim that the Nordics are among the world’s leading sustainable nations, and is this sustainability evident in their fintech solutions?
SM: “Sustainability and ESG (Environmental, Social and Governance) is primarily an economic concern, encompassing sustainable farming, power and water maintenance, and waste management. Nordic countries have long practised sustainable principles, naturally placing them ahead of many nations.”
“The Nordic countries’ natural, sustainable edge in their economy is now visible digitally. By digitally showcasing their sustainable practices, they enhance transparency, making their sustainability progress clearer and more accessible. This gives their sustainability transparency index an intrinsic advantage in detail and precision.”
“From our experience, sustainability data primarily comes from payment and ERP systems used by businesses. Nordic countries’ inherent sustainability gives their fintech firms an edge, allowing them to develop unique ESG software solutions on easily available ESG related data. Where other regions lag in sustainability, Nordic fintechs can guide them, setting standards in disclosure, benchmarking, and transition based on
their sustainable foundation. Due to their economic strengths, Nordic companies work seamlessly with responsible partners. However, their solutions aren’t directly applicable in Africa or Asia. Asia, in particular, needs a shift from a ‘brown’ economy to a ‘green’ one.”
“I’d like to see Nordic companies develop tailored solutions to guide Asian businesses’ sustainability journey.”
TKJ: From your viewpoint, are the Nordic countries among the world’s most innovative nations? And do you believe the size of their domestic markets allows them to adopt a global mindset from an early stage?
SM: “Nordic nations are truly privileged. It’s not the market size that made Nordic products stand out. Instead, it’s the sheer quality of their offerings. Nordic products excel because of their meticulous design, thoughtful engineering, and excellence.”
“This superior quality spans various sectors, from food to gaming and other solutions. The consistent quality of Nordic nations is undeniable. And I don’t
believe it’s connected to the market size. 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 exudes empathy, and when it genuinely cares for its environment and community, innovation naturally flourishes.”
“This is what seems to have transpired in the Nordic regions. The progression towards being an incredibly empathetic society undoubtedly provides a competitive edge. However, my earnest hope, not so much a critique, is for the Nordics to extend their wisdom and values, emphasizing the significance of an empathetic society in fostering innovation, especially to parts of Asia that are grappling with myriad social challenges, including race, gender, and class disparities. Overcoming these hurdles is crucial for creating exceptional products.”
“For Nordic fintech firms looking to enter Asia, I recommend Nordic companies focus on the B2B segment. They can act as the backbone for local B2C entities, offering solutions like fraud prevention, insurance, pension schemes, and wealth advisory. Navigating the B2C space might be challenging due to cultural differences, but Nordics excel in product innovation and can thrive in Asia with a B2B strategy.”
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.
As digital platform usage increases among consumers, businesses are modifying their customer service approaches. Concurrently, with growing customer expectations, there’s a trend where companies, through “embedded finance,” can now offer financial services, transforming the way they cater to financial needs.
“Traditional banks, known for their brick-and-mortar branches and manual paperwork, have been revolutionized by fintech. Fintech has not only made banking services more accessible,
efficient, and cost-effective but has also introduced new services like embedded finance. This transformation has boosted several industries through mobile payment apps, digital wallets, and contactless payment solutions,” remarks Dr. Anamika Datta, an e-commerce tech professional drawing upon her rich experience and industry observations from Zalando and Amazon
To realize this vision, companies will aim to equip their customers with a range of banking and financial tools. These tools will encompass standard bank services like digital payments,
bank accounts, insurance, and loans. While major tech giants have ventured into this realm, we see more companies branching out across all industries.
A 2021 survey from German Solarisbank and Handelsblatt Research Institute shows that 61 per cent of Germans would purchase financial services from online shops. The willingness will affect other platforms and providers with whom both consumers and businesses have established trustworthy relationships.
E-commerce giants like Zalando, Asos and Farfetch are working to create a seamless online shopping experience
Dr. Anamika Datta E-commerce tech professional The fusion of fintech with various industries, such as e-commerce, automotive and entertainment, is reshaping the digital landscape.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 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 half of all e-commerce sales, excluding the 20 per cent from credit cards. This advancement in payment methods offers customers a multi-channel shopping experience, allowing them to buy from various platforms seamlessly, including through conversational commerce.
Empty carts filled
Transactions become a natural part of the shopping journey without any hurdles. According to Dr. Datta, 35 per cent of consumers check available payment methods even before placing an order. Zalando, Amazon Fashion and Asos publicly published reports nearly 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
global digital payments revenue is expected to reach $15 trillion by 2027.
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.
transaction experience, eliminating the cumbersome process of fishing out physical cards. Lastly, thanks to advanced encryption and anonymization techniques, digital wallets provide a safer alternative, sidestepping the risks of theft or loss associated with cash and physical cards.
Fintech empowers SMEs through data
In the dynamic world of e-commerce, the entry of fintech has acted as a bridge connecting traditional financial institutions and e-commerce platforms, enabling small and medium enterprises to gain access to more financial services.
“As fintech is a bridge connect-
ing traditional banks to e-commerce platforms, it offers multiple payment solutions. This allows SMEs to provide a variety of payment options for their customers, catering to diverse preferences and ensuring they can service a broader audience. Just like we see it with Paytm in India,” Dr. Datta says.
Embedded finance, in collaboration with fintech, offers real-time transaction data. For SMEs, this immediate data access enables quick adjustments to products, pricing, or marketing strategies based on current market trends and customer behaviours and can give SMEs a competitive edge.
“With data-driven insights, e-commerce giants witness a whopping
With data-driven insights, e-commerce giants witness a whopping 30 per cent increase in customer engagement.
30 per cent increase in customer engagement. With transactional data, SMEs can make more informed purchasing, pricing, and discounting decisions. This leads to better demand forecasting, which increases the likelihood of repeat purchases and fostering customer loyalty,” Dr. Datta says and concludes:
“In a nutshell, fintech and data-driven analytics transform e-commerce companies into customer-centric, profit-making juggernauts. From fraud-busting to dazzling recommendations, these analytics elevate the game, leaving customers enchanted and operational strategies oh-sosmooth.”
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.
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.
Source: Dr. Anamika Datta, E-commerce tech professionalThe intertwining doesn’t just stop at transactions. The vast data entertainment companies possess, from how users consume content to their spending habits when coupled with fintech, opens the door to tailored financial products.
“Imagine getting a unique credit offer based on your favourite movies or a savings scheme aligned with your music streaming habits. The melding of these two sectors also leads to innovative marketing strategies, such as cross-promotions and loyalty programs, where the lines between entertainment and finance blur. You could be offered exclusive show tickets as a banking reward or get special deals on a streaming service when using a particular payment channel,” Rongaard explains.
Financial institutions, recognizing the immense potential of the entertainment industry, have begun to diversify their operations. They’re either forging partnerships with successful entertainment ventures or directly investing in them.
Simultaneously, the vast audience base of entertainment platforms is being tapped into to promote financial education and literacy, which is essential in an increasingly digital world.
“We’re also witnessing an uptick in joint ventures between these sectors, leading to co-branded products that intertwine financial benefits with entertainment perks,” Rongaard says.
Merging fintech and new industries introduces various privacy challenges as the extensive personal and financial data
stored by fintech platforms makes them tempting targets for cyber threats.
The use of blockchain technology presents an avenue to address many of these concerns, according to Rongaard:
“Data breaches involve unauthorized access to sensitive data. With blockchain’s decentralized nature, data isn’t stored in a singular location, making it less susceptible to breaches. Every transaction on the blockchain is recorded on multiple nodes, ensuring that data remains intact even if one node is compromised.”
Phishing attacks and transaction fraud have also seen a rise with the digitization of transactions. Again, Rongaard argues that blockchain’s transparent ledger system can be leveraged to verify the authenticity of transactions, making unauthorized or fraudulent
Morten Rongaard CEO and co-founder of Reality+
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.
activities easier to spot.
“Each transaction is recorded in an immutable ledger, which means once a transaction is added, it cannot be altered, reducing the scope for fraud,” he says.
Also, e-commerce faces growing security and privacy hurdles due to integrating and using transactional data. According to Dr. Datta, 64 per cent of consumers are uneasy about potential data breaches. And the numbers speak louder, with 86 per cent pausing transactions due to security reservations. What does this mean for the burgeoning e-commerce landscape?
“To address these concerns elegantly, businesses must embrace robust encryption and stringent authentication protocols. Laws like GDPR and CCPA aren’t just best practices; they’re essen-
tial. They’re the keystones to cultivating trust in this digital dance,” says Dr. Datta.
Not only payments and transactional data are shaking up the e-commerce industry. Alternative lending models, enabled by fintech, have been a game-changer, particularly benefiting SMEs. With traditional lending tightening its grip, alternative lending stepped onto the stage, helping SMEs. According to Dr. Datta, 32 per cent of SMEs found it easier to secure funds through fintech-powered lending platforms, fueling their growth ambitions.
“Fintech has transformed the lending process, eliminating the need for burdensome paperwork and long waiting times. These modern platforms boast a remarkable turnaround, with
approvals often coming within a day. Such speed and convenience have made them a preferred choice for many SMEs,” she says.
Fintech-driven alternative lending has reshaped the e-commerce terrain for SMEs. With these platforms offering them unparalleled access to capital, rapid loan processes, bespoke financial solutions, an expanded customer base, and the means to undergo a digital revolution, SMEs are better positioned to thrive in the ever-evolving digital marketplace.
“Alternative lending has painted a new canvas for SMEs in the e-commerce landscape. With easy access, speed, flexibility, global reach, and digital transformation, these businesses waltz confidently into the digital marketplace, embracing growth and flourishing like never before,” Dr. Datta concludes.
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 DelgadoWorldline is the fourth largest payment player in the world, and the number one payment processor in Europe, yet its approach to micro-entities and small businesses reflects the care that often sits behind major success stories.
In 2015, the company saw a gap in the Nordics: “We saw that micro entities and small businesses—the local butcher, hairdresser, coffee shop—found it very difficult to understand what they were paying for their payment processing solution, and to whom,” says Mette Lykke Vibe, Head of Denmark at Worldline Global. “These merchants had multiple contracts and vendors, and we wanted to simplify this.”
Worldline’s purpose was simple: Remove all the complexity from payments for merchants, and give them a single payment solution to use regardless of whether the merchant’s customer is paying offline or online.
The result was Worldine’s One Com-
merce omnichannel payments platform.
Worldline’s goal with One Commerce was to give merchants a single contract, rather than separate contracts for the device, the EPSP, and possibly even the acquirer. Merchants also only deal with a single interface, regardless of whether they accept their payments online or offline.
“Our purpose is to onboard merchants simply into a product that, actually, is quite complex in the background,” says Mette Lykke Vibe. “The complexity in the back-end of payment solutions shouldn’t be the merchant’s problem.”
Although the simplified solution was a major achievement in itself, the value of an adaptable, omnichannel, single-vendor platform became apparent during the COVID pandemic.
After the lockdowns went into force, closing merchants’ stores, Worldline recognised that its Omnichannel solution could allow the company to quickly create a payment option to get merchants selling again.
“Many of those merchants didn’t have an online store or the budget and skills to create one,” Mette Lykke Vibe tells NFM. “So, we created and integrated a Pay-by-link option in the Om-
nichannel platform. Merchants could then share that link on social media to start receiving payments. Because our solution was already multichannel, it wasn’t a major technical challenge. But I’m proud of the team’s effort to get on the phone and tell our customers directly about it.”
Beyond the Omnichannel solution, Worldline also identified another financial challenge that individual merchants were running into: Quick access to small loans.
“We’re not a bank, and have no intention of becoming one,” says Mette Lykka Vibe. “But we can fill a gap where new businesses just need a small loan for 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 merchants to have a simple overview of all their payment activities, and also to stick with a single supplier,” says Lykke Vibe.
Growth Finance was also crucial after the COVID lockdowns because it helped businesses get started again after a period of no income. Banks were understandably hesitant to issue too many loans at the time, but it created a catch-22 situation for merchants who needed cash in a hurry. “We were glad we could step in and help,” says Lykke Vibe, “and now Growth Finance is an ongoing part of Worldine’s offerings.”
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.”Mette Lykke Vibe Head of Denmark at Worldline Global Mette Lykke Vibe Head of Denmark at Worldline Global
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.
By Marria Qibtia Sikandar NagraTraditional brick and mortar retail’s limited innovation and inclusivity, hindered by complex hardware systems and legacy infrastructure, has made implementing new retail solutions costly and challenging. Consequently, only a limited number of players cater to this market. This is where the need for open architecture in retail becomes more pronounced. By lowering the threshold and embracing open architecture, the retail industry can foster a more dynamic market and create a better marketplace for all stakeholders.
Leading globally as the first software provider in the world that integrates payment, checkout, and backoffice functionality into one harmonious commerce ecosystem, Focalpay’s commitment to openness has allowed it to deliver innovative software that empowers merchants and enhances customer experience.
Fusing payments and retail Focalpay’s platform allows for a seamless integration of various payment methods, both in-store and online, providing a unified interface for all retail processes. The team’s initial area of concentration was mobile transactions in the physical store. It prompted them to investigate the factors driving
the ground-breaking progress in the financial technology sector. Upon realizing that the different options for consumers, including credit alternatives and inventive fintech ventures, weren’t adequately meeting the requirements of the retail industry, they decided to confront this obstacle and adopted a unique strategy. “We aimed to create a software that could co-exist alongside architecture, eliminating the need for complete replacement if the market wasn’t ready. Simultaneously, we wanted to offer a wide range of payment methods, particularly at the point-of-sale for merchants. Our goal was to enable merchants to easily select payment methods in-store or online with a simple click in their admin panel, without disrupting the cashier system or customer journey,” shares Birkir Veigarsson, CEO and Co-Founder of Focalpay.
This constitutes the core strength of Focalpay’s commerce platform, since it provides a unified checkout experience for different wallets, in addition to
payment options available to merchants. They can choose any checkout method, whether through a cashier or self-scanning on the phone, traditional sales counters, or even e-commerce clickand-collect. “We empower merchants with the tools to leverage the best that the fintech space offers, without requiring significant upfront investment or extensive negotiations with their existing suppliers. This is the essence of our robust payment and checkout platform for merchants,” states Veigarsson.
So, Focalpay developed a robust commerce platform that empowers merchants to connect their payment journey wherever needed. “Our focus on merging retail and e-commerce spaces is best exemplified by our approach to bridging the gap between physical stores and online shopping. Suppose you visit a store and find that a particular item is unavailable. With Focalpay, you can use your phone to scan the item, access the e-commerce site, place an order, choose a delivery option, and complete the purchase. While in the store, if you find other products that you would like to purchase, you can add them in the same virtual basket as the other product that you selected for home delivery. Thereafter, you can easily select how you want to pay for and receive each product. This way, we
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 seamless payment processing and contribute to a greener future. Their platform’s architecture boasts 40-90% lower energy consumption than traditional industry systems. It also allows its clients to avoid investing in physical equipment such as cashier terminals, conveyor belts, and other hardware to reduce overall material consumption.
Forging the path to market leadership
As a tech company, Focalpay deems it integral to embrace new trends, challenge its architecture, and continuously evolve its products. Engineering excellence is at the forefront of their focus as they strive to stay ahead in a competitive market. “Two key aspects that have proven exceptionally beneficial are our transaction-based business model and our commitment to standardization. Our business model, which means that merchants only pay when they use the system, offers merchants flexibility, allowing them to start with us at no cost and later optimize costs. This unique approach sets us apart from others in the industry. Additionally, we prioritize integrating third-party solutions into our product portfolio, ensuring that our merchants always have access to emerging technologies. With these strategies in place, we’re confident in our ability to maintain a leading position,” affirms Veigarsson.
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 DelgadoIn an exclusive interview with NFM, Bart Willaert,
ExecutiveVice
Pres-ident of Mastercard Open Banking International Markets, sheds light on Mastercard’s trailblazing efforts in the Open Banking initiative, as well as how the Nordics’ high level of digitalisation provides an example to new markets to learn from.
Chris Crespo (NFM): Payments has exploded with innovation over the past 12 to 18 months. What role has Open Banking played in this accelerated pace of innovation?
Open Banking is an excellent way for consumers to share their data securely with third parties, and that creates innovation. It also creates new flows, and those new flows add value to consumers and small businesses.
When you’re making a payment— rather than going from one part of a flow, such as when you get a bill or invoice in your digital mailbox—you can now immediately pay it.
But it’s not only about payments. Fundamentally, a new ecosystem exists where Open Banking allows new players to innovate and benefit back to consumers and businesses.
In Europe, Open Banking had a slow start. But Mastercard showed a visionary culture of embracing Open Banking early-on and making it part of its services. Why is that?
Mastercard saw opportunity because we believe that Open Banking is the way to truly bring innovation, new use cases, and more convenient ways for consumers to experience payments. Many concrete use cases have already taken off, such as paying bills through Open Banking or doing e-commerce payments. Credit-decisioning is an emerging use case we’re seeing more of, and it’s extremely powerful.
Mastercard can play a powerful role in these opportunities because of our history in building quality networks. We’ve been doing networks since we started, which puts us in an excellent position to add value, do it correctly, and focus on quality and security for our customers.
The Nordics and Baltics are highly advanced in terms of digitalisation and the use of digital IDs. So, Open Banking has really taken hold in the region. What’s Mastercard’s vision for the Nordics and beyond, when it comes to
the deployment of further services in Open Banking?
The Nordics have always been a powerhouse for innovation. We’ve seen that in payments and traditional business—adopting electronic payments, digital payments, mobile payments, and so on. It’s a continuation of a solid drive to make life easier for consumers and businesses.
We’ve seen the Nordics leading in Open Banking—we see adoption happening strongly as well as new use cases. Sometimes, we don’t even “see” them because they’re embedded in our daily lives.
Open Banking is still in an early stage, so there’s much more evolution and many more use cases to come. But the Nordics show where we’re headed.
The UK also has high adoption—seven million users use Open Banking.
Beyond that, things are in a more nascent stage. In those zones, they’re looking at the Nordics, and considering the benefits of Open Banking.
I’m meeting with customers from Australia, where Open Banking is gaining traction, and they’re coming to the Nordics to learn what’s happening here, how it’s happening in Europe, and what’s driving it.
Bart Willaert Executive Vice President, Mastercard Open Banking International MarketsWhen I look at all the advancements on the back of Open Banking, I wonder what else can be innovated on the back of this. And yet we hear that we’re just scratching the surface of what can be done with Open Banking.
What can we expect to see in the short term?
The key message is that the solutions are already happening today. It’s not something that we need to wait 20 years to see.
But there’s still much more runway.
Firstly, we’ll experience a lot more maturity in quality. Open Banking is
a new network, and not everything is perfect yet. But there’s a strong drive from the players and regulators in the ecosystem to make it more secure, slicker, and more robust.
Secondly, I believe we’ll see much more adoption in the coming years. The use cases are there, and the players are positioning themselves, but it takes a bit of time for consumers to use it, try it, and recognise the benefits.
The third dimension is that we’ll see many more use cases opening up in the existing datasets, but also with new datasets. The regulator is also
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 Australia 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 going to do certain things, but there are many things we’re not going to do. Not every innovation is built by Mastercard, luckily. But we have great partners that do innovate and whom we partner with to co-create.
So, we’re looking forward to the FinTech forums to partner and invite customers to work with us and bring these innovations to their own customers.
Thank you so much for taking time to talk to us today. We look forward to seeing Mastercard and your colleagues at Nordic Fintech Week.
Chris Crespo, Head of Content at Nordic Fintech Magazine & Bart Willaert, Executive Vice President of Mastercard Open Banking International Markets
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 FrierCentral to Denmark’s fintech narrative is its tight-knit community. With mutual trust-binding fintech founders, the established financial sector, and other stakeholders, Denmark enjoys a rapid knowledge-sharing ethos.
“Having a community that trusts each other creates faster pace knowledge sharing, fosters an experience-sharing culture, which in the end creates higher speed of execution for the sector as a whole,” says Simon Schou, Chief Innovation Officer at Copenhagen Fintech, a focal point in the Danish fintech ecosystem with back up from established financial industries, supporting industries, startups, investors, research institutions and policymakers.
Denmark shines brightly for both domestic and international investors. Notwithstanding market perturbations due to COVID-19 and geopolitical fluxes, Denmark’s fintech realm has lured tier-1 international venture funds. Notably,
2022 saw the inception of Denmark’s maiden fintech-specialized venture fund, Upfin, earmarking €30 million for early-stage Nordic fintech ventures.
“There are no specific subsectors of fintech that currently lead significantly in funding, but a strong funding signal is how close you are on product-market-fit. It is challenging to fundraise simply on story-telling nowadays; you must also showcase significant client growth over a period of time,” Schou adds.
According to Schou
Product-market fit and scaling are essential parameters for growing startups: “It’s a universal struggle for most startups, especially European ones; these challenges are amplified by cultural nuances when expanding to new terrains.”
As these startups flourish, they grapple with understanding client cultures
in uncharted markets and the perennial challenge of talent acquisition.
“A deep-seated ‘born global’ ethos is somewhat lacking, nudging startups to align with astute international VCs for a grand global leap,” says Schou.
Another Denmark-specific hurdle is the presence of numerous small and medium-sized banks operating on jointly owned data centres. Schou explains that this intricate landscape sometimes complicates partnerships for fledgling fintech ventures.
“Forecasting the Danish fintech trajectory, two arenas seem ripe for disruption: climate fintechs and the Web3/ metaverse space. The intertwining of AI, Big Data, tokenisation, and Blockchain within the Web3 and Metaverse is poised to redefine financial services,” Schou says.
While trading applications are just the tip of the iceberg, Denmark’s fintech ecosystem appears ready to plunge into broader financial service innovations.
Amidst the Nordic landscape, Iceland emerges with a distinct fintech ecosystem. Its relatively small size, approximately 400,000 people, juxtaposed with a dynamic, innovative spirit reminiscent of its Nordic neighbours, renders it a unique hotspot for fintechs.
“While Iceland’s compact nature ensures closer connectivity and streamlined product testing, it also poses challenges. Fewer market players make predictions a tricky endeavour. However, this constraint becomes Iceland’s strength, propelling Icelandic firms to gaze globally, emboldened by affiliations with prominent Nordic clusters,” says Gunnlaugur Jónsson, CEO of Reykjavik Fintech Cluster.
Iceland faces regulatory dilemmas. Adapting European rules can take a long time because only a few people work on it. They often follow what
While Finland is known for its strict interpretation of EU regulations, this rigidity offers stability and predictability for fintech firms. The regulatory environment, though stringent, can be an advantage for companies looking to operate in a stable and predictable framework.
But when it comes to startup, it adds layers of complexity. The country’s stringent interpretation of these regulations often prompts businesses to consider more lenient European jurisdictions for licensing and operations.
Apart from that, funding is the primary challenge in the ecosystem. Those with revenue streams have weathered the storm, albeit at the expense of valuations compared to previous years.
“However, early-stage companies still in the process of finding their product-market fit face headwinds amidst the current market dynamics. This slowdown isn’t unique to Finland but
Nordic countries, mainly Denmark, do. A case in point is the slow roll-out of independent payment solutions, even with PSD2 in place.
Startup growth is a tightrope walk. Iceland is seeing more partnerships between regular banks and new FinTech companies. Many banks are investing and working with these tech companies, starting a clear trend toward closer ties. Like banks worldwide, Icelandic banks aim to provide a wide range of services.
“While they face challenges due to their smaller structure, they also benefit from being more flexible and making decisions faster. This creates an interesting backdrop for future growth and change,” says Jónsson
Start-ups face several hurdles as they grow. Staying flexible during fast
expansion, especially in team dynamics, is crucial. Additionally, breaking into the market and selling their products can be complex. Some start-ups also deal with the classic “chicken and egg” problem, especially if their value becomes more apparent as they grow.
Going forward, Icelandic banks stand to gain significantly by taking a more open approach, weaving fintech innovations into their online services. Beyond the regular banking landscape, blockchain in Iceland shows immense promise.
“While it’s in its infancy and sometimes seen as unconventional, its ability to transform the nation’s daily financial dealings is vast. Blockchain introduces a level of openness in banking that outpaces any existing Icelandic regulations. If our banks embrace this, the future is rich with possibilities,” says Jónsson.
mirrors the global trend,” says Janne Salminen, CEO at Helsinki Fintech Farm.
Finland’s banks, renowned for their innovative spirit, have been included in the fintech revolution. While they prioritise revamping their legacy platforms and adapting to ever-evolving regulations, there’s been a marked interest in embracing fintech innovations.
“An exemplary initiative in this space is DIAS. Here, major Finnish banks partnered with a startup, aiming to digitise housing shares via blockchain,” Salminen says.
From local legends to global game-changers
Finland boasts a robust startup ecosystem, mainly active in the early stages. Given its small market size, the country often looks beyond its borders to foreign investors for larger funding rounds.
“Our track record of startup successes and reasonable valuations makes
it a lucrative choice for international investors. However, the challenges faced by the global venture capital market have prompted local startups to tread cautiously, focusing on sustainability,” Salminen explains.
The future shines bright for the Finnish fintech sector, with several areas earmarked for potential growth. Innovations considered standard in Finland, like digital accounting and invoicing, are deemed cutting-edge in markets like Central Europe. Such areas offer Finnish startups immense opportunities to globalise their solutions, bringing their expertise to untapped markets.
The Finnish strength lies in product development and engineering. Yet, startups often overly focus on these aspects. The real challenge arises when they transition from product refinement to aggressive market entry, a shift many find daunting.
Sweden’s fintech landscape is a marvel of interplay between innovators, government bodies, established finance houses, and young startups. The ecosystem thrives on a unique culture of collaboration, ensuring a rapid trajectory towards success.
“The cycle of talent development is constant, with professionals moving seamlessly within the financial industry, many evolving into the next generation of entrepreneurial pioneers,” says Anna Blyablina, co-founder and chairwoman of the board at Stockholm Fintech.
A distinct advantage that Sweden enjoys is its tech-savvy populace. As one of the world’s earliest tech adopters, Swedish consumers are enthusiastic about engaging with innovative providers. This acceptance from consumers offers B2C fintech startups an opportunity-rich platform to gain solid market traction.
However, the local fintech market is saturated with innovative startups and incumbents.
“This competition makes it challenging for new entrants to differentiate themselves and capture significant
One of the defining features of Norway’s fintech landscape is its collaborative spirit. Norway’s tight-knit business environment encourages synergies between fintech startups, established financial institutions, investors, and research bodies.
The collaboration results from Norway’s world-class payment system, which stands out as highly efficient. Leading this charge is Vipps Mobile Pay, a predominant player in the Nordic region known for its swift and straightforward payment solutions.
“The sense of collaboration is rooted in the longstanding tradition among Norwegian banks and insurance companies to work together, forging a conducive atmosphere for innovation,” says Bent Gjendem, CEO of the Norwegian Fintech Cluster NCE Finance Innovation.
Established half a decade ago,
market share,” Blyablina says. That forces many fintech startups to aim for broader global markets where they often grapple with complex regulatory terrains, diverse cultures, and operational dynamics.
Despite these challenges, the traditional finance industry in Sweden has shown commendable adaptability. Faced with regulatory pressures, these traditional entities have found allies in fintechs, which craft regulatory tech solutions that simplify compliance.
“In essence, the challenges are fostering increased collaboration between traditional and modern finance entities. While fintechs view these collaborations as revenue generators, traditional institutions see them as gateways to strategic advantages,” Blyablina says.
The nation boasts a strong reputation, producing startups rivalling Silicon Valley in unicorn statistics. This success, especially in the fintech realm, has caught the eye of both local
and international investors. Yet, trends in 2023 suggest a dip in deals, mirroring a broader European movement with a significant focus on growthphase companies eyeing expansion.
“Mergers and acquisitions are on the rise. Noteworthy transactions include Sambla Group’s acquisition of MyMoney and Francisco Partners’ acquisition of Macrobond. Parallelly, there’s a surge in fintech startups aiming for the Sustainable Development Goals (SDGs), reflecting Sweden’s commitment to sustainability,” Blyablina says.
The future radiates promise. Sweden’s advanced digital society continually presents opportunities, especially in the financial sector, according to Blyablina. As the world battles climate change, the finance sector in Sweden is harnessing fintech to direct investments towards sustainability, aligning with the Paris Agreement. This evolution reaffirms the nation’s forward-thinking approach, laying the groundwork for a fintech industry deeply committed to global Sustainable Development Goals.
Finance Innovation has received widespread backing. This national fintech cluster draws support from stakeholders, including traditional financial institutions, Innovation Norway, regulatory bodies, startups, and other ecosystem participants.
From Hurdles to Heights
However, the journey is challenging. Fintech startups in Norway often need more access to capital, reduced regulatory support, and a comparatively lower focus on innovation, especially when benchmarked against Sweden and Denmark. These constraints can pose hurdles for scaling ventures.
Yet, the traditional finance sector in Norway is very much aligned with fintech advancements.
“Financial institutions are readily entering partnerships, investing in
fintech startups, launching incubators and accelerators, and collaborating in initiatives like the fintech sandbox. This collective approach culminated in the launch of the Norway Fintech Festival, which was met with significant acclaim,” Gjendem says.
On the investment front, Norway’s reputation as a trustworthy nation producing world-class products positions it attractively for both local and international investors. Being an open, small economy with a deep-rooted history in exports further boosts its allure.
Norway seems poised to leverage the AI revolution in fintech. The success of AI, particularly within financial institutions, hinges on comprehensive datasets and reliable data-sharing mechanisms. Given its strengths, Norway is well-placed to assume a pivotal role in this arena.
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 MalmgreenIn the autumn of 2022, the EU Commission approved the merger between Danish MobilePay and Norwegian Vipps. Based on an agreement between Danske Bank and the consortium of banks behind Vipps in Norway, the two mobile payment companies have since embarked on a journey to create the best and most comprehensive digital mobile payment solution in Europe. The goal is to have a unified platform in place by the end of the year, and according to Rune Garborg, the CEO of the new entity, there will be significant synergy effects, both in terms of optimizing daily operational costs and, most importantly, in terms of future development strength.
“There has been a quite extensive approval process. Now we have the
time and resources to create an even stronger, faster, and more agile organization that can make life easier for both our private and business customers,” says Rune Garborg. He also emphasizes that the merger opens up possibilities for expansion, not only in terms of a strengthened presence in Finland, where Vipps MobilePay already have more than 2.5 million users, but also in relation to a completely new market like Sweden. Additionally, there are plans for further expansion into the rest of Europe.
Fintech environment thrives in the Nordics
“We are pleased that the merger has finally been concluded, but it also means there’s no time to relax. On
the contrary, we need to be sharply focused on both the further development of our existing services and the creation of entirely new ones, which will be done in close collaboration with the Fintech environment. In the past few years, we haven’t been good enough at looking beyond our own nose, so going forward, we need to become much better at keeping an eye on the innovative companies emerging on the scene. I can only recommend that these companies get in touch with us if they want to discuss collaboration,” continues Rune Garborg. Especially when it comes to expansion plans, both in the Nordics and the rest of Europe, he stresses the importance of being closely connected with local Fintech communities. This is
Rune Garborg CEO, Vipps MobilePaythe best ammunition in the competition against global tech giants in the mobile payment market. From a Nordic perspective, Vipps MobilePay is privileged to operate in a part of the world where both citizens and businesses are digitally mature. Furthermore, there’s a flourishing Fintech environment, and according to Rune Garborg, this provides an excellent foundation for the creative force needed to develop simple and powerful solutions.
Users are our best ambassadors “At present, we have a total of 11.5 million users in the Nordic region, and
they are our best ambassadors. Therefore, it’s important that we encourage them to provide feedback and comment on the user-friendliness of the solutions we develop. The close and local contact, as well as the region’s digital readiness, are crucial competitive factors for our expansion further into Europe,” explains Rune Garborg. He also sees collaboration with local partners as a significant factor. Additionally, he views close cooperation with regulatory authorities and a closer interaction between the private and public sectors as important.
“As known, e-commerce continues
to grow, and when a Dane sees the MobilePay logo or a Norwegian sees the corresponding Vipps logo, it signals trust. Outside the Nordic region, the success of mobile payment solutions hasn’t been as substantial, but we naturally hope that with our platform, which I won’t hesitate to call the best on the market, we can change that,” concludes Rune Garborg. Currently, the focus is on increasing efforts in the Finnish e-commerce market, and soon they will strategize for the Swedish market. But afterwards, they will truly start looking beyond the Nordic region.
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.
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 DelgadoThe story of their collaboration demonstrates how a startup with minimal fintech experience can succeed by pairing with the right payments partner to bring a brilliantly simple POS solution to the market.
Flatpay and Finaro: Payments Made Simple Flatpay is the brainchild of four digital entrepreneurs and payment solution experts who were also ex-colleagues—
Sander Janca-Jensen, Peter Lüth, Rasmus Busk, and Rasmus Hellmund Carlsen. Together, they sought to disrupt the market with a simple, transparent, and affordable payment solution for small and medium-sized merchants, thereby challenging the status quo.
After studying various industries, Flatpay recognized that there was an opportunity around payments for brick-andmortar stores, says Rasmus Hellmund
Carlsen, CMO of Flatpay. “We did some mystery shopping and then investigated deeper for a few months, and discovered that merchants were experiencing a high level of payment complexity, coupled with obscure pricing.”
Finaro, with a proven track record of supporting payments, is a global cross-border provider that facilitates international commerce through easy-to-implement payment solutions. “Finaro’s mission is to simplify complexity in payments,” says Ruben Nielsen, Finaro’s VP of Sales and Business Development for the Nordics. “We do that by creating multidimensional payment solutions that generate growth and enable peace of mind for merchants.”
Flatpay wanted to make payments easier, it was a natural synergy with Finaro’s core purpose. “Finaro has invested immense resources into simplifying payments,” says Nielsen, “and we do it exceptionally well. We
saw that Flatpay’s innovative approach, coupled with Finaro’s payments solutions, would enable us to create an immensely straightforward payment process where everyone wins.”
Before Finaro, merchants had to navigate a confusing maze of working with several providers, for what the Flatpay team felt should be an integrated POS solution. The existing setup was expensive and inefficient, and pricing was obscure. Merchants had to pay different fees depending on the card their customers used for payments.
“The idea around Flatpay was to create a super simple, all-in-one package solution,” says Carlsen. “The name Flatpay was inspired by the fact that merchants would pay one fee regardless of the card their customers used.”
The problem was that although the founders had payments and entrepreneurial expertise, they still lacked greater financial technology experience.
After making countless calls to understand the market, the team discovered Finaro.
Finaro offered a white-labeled, onestop payments and acquiring solution. And Finaro also firmly believed in the Flatpay team and their concept.
The Flatpay team was impressed by Finaro’s speed and responsiveness. “When you’re a startup made up of team members who’ve all quit their jobs, speed is crucial,” Carlsen says. “Finaro understood us and took us seriously from the beginning.”
There were two reasons why Finaro took the team seriously, Nielsen tells NFM: (1) Finaro grants all serious requests the attention they deserve. (2) The Flatpay team had a solid concept backed by market research.
“Their concept was unique,” Nielsen tells NFM. “They wanted to go to the market with free terminals, which we hadn’t seen in most of Europe. Starting in POS instead of eCommerce was also untraditional, as the POS market is complex and not 100% digital. That excited us because it meant more potential opportunities for challenging the market.”
Finaro checked the team’s back-
ground and discovered that each founder had an excellent track record and business reputation. “We recognized the potential for Flatpay to become a market challenger, and we gave the green light to move forward,” says Nielsen. “We also saw the partnership as a potential for us to learn. We had dealt with large players in the Nordics before but never a startup, so the relationship was clearly mutually beneficial from the start.”
The Journey to Becoming a Challenger
After a few months, the Flatpay team, with the help of Finaro, had an MVP. Finaro helped the team debug minor issues as they arose, but initial live-testing made it abundantly clear that the product and pricing had an excellent market fit. The team was motivated to push ahead. “Finaro had to adapt based on market insights obtained from handson cases while working with Flatpay, and that helped us better recognize what’s needed to disrupt the Nordic and European payment landscape.”
In summer of 2022, Flatpay went to market, during which they fine-tuned the customer experience, and then they started focusing on scaling in late 2022. Since then, they’ve onboarded over 2,500 customers and are steadily
gaining market share in Denmark. Additionally, they’re now active in Finland and Germany, with plans to grow even further abroad thanks to Finaro’s global presence. Furthermore, they’ve now started working with Finaro’s Account Management Team, who continue working closely with them to support their business’s needs.
France Blanchard, SVP Account Management has noted: “Flatpay and Finaro’s end goals were one and the same—transparency and simplifying payments —so we are able to learn from each other and build something together that works for all parties and enables us to thrive and grow.”
There is no doubt that in the current landscape, the Nordic and European markets are ripe for consolidation in the payment sector. The two regions only have a few specialized POS players, and Finaro considers its partnership with Flatpay a strong strategic move to expand in these markets.
Together, we believe the Nordics and Europe will eagerly adopt transparent solutions in the payments sector, ultimately freeing themselves from the constraints of outdated legacy systems. And when that happens, we’ll be ready.
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 FrierFor 150 years, one looming concern has echoed across industries: Will machines replace humans in the workforce?
This old narrative is re-emerging with greater vigour as generative AI enters the scene, potentially sidelining human decision-making power.
“’ Throughout history, while some jobs have been made obsolete, new ones have always emerged. But there is a substantive difference this time. And I do believe that a business owner might have AI entities heading major departments like marketing, finance, and HR within three years,” says Casper Skern Wilstrup, CEO and founder of Abzu.
Generative AI, often referred to as transformer models, can produce outputs like text, images, and videos based on the given input. These transformer models, when prompted with a question, generate a response. However, the fascinating aspect is the generation and the model’s ability to evoke and present an appropriate answer to the user’s query.
And according to Wilstrup, early adopters of AI in this domain are likely to have a competitive edge over others. A prime example of this influence is visible in customer service.
“At present, when a customer interacts with their bank via a chatbot, the experience can sometimes be impersonal and limited. These chatbots cannot frequently recognize the user, cannot retrieve specific user data, and often fail to grasp the nuances of individual customer agreements or contracts,” he says.
Enhancing these digital agents with AI can provide a more tailored and seamless experience and make chatbots resemble something akin to ChatGPT, understanding individual user history and providing targeted responses. Wilstrup anticipates a shift from the current web interfaces to more interactive, question-driven interfaces:
“Advanced algorithms can analyze a customer’s transaction history, preferences, and behaviour patterns. This data-driven approach can enable financial institutions to offer bespoke financial products, advice, or notifications that cater directly to an individual’s needs.”
Another critical area is data analysis, encompassing credit risk, financial
forecasting, and fraud detection by processing and integrating information from varied data sources.
Financial institutions, like banks, have a historically complex technological infrastructure and many banks are stuck in long, inefficient processes of manually moving and restructuring data. Instead, they should be investing in AI systems to automate these tasks.
“The adoption of generative AI will replace outdated manual processes, leverage its unparalleled analytical prowess, and harness its predictive capabilities for better decision-making,” he argues and continues:
“Many of today’s banks are engaged in extended 5-year projects to manually move data from one system to another, a process that is not only costly and prone to errors but also lacks a strong business justification. Were I in a bank’s position today, I would redirect funds from data reorganization efforts towards systems that can automate this task for me?”
Drawing parallels with historical research methods, like Johannes Kepler’s synthesis for planetary motion, Wilstrup points out that AI can analyze enormous data amounts and extract meaningful insights, like what researchers do. He emphasizes that AI’s ability to “crunch” data and derive synthesis is unmatched, making it invaluable for financial analyses.
“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.”
In an industry where timely and accurate information is crucial, generative AI provides the tools to stay ahead of the curve.
Given the capabilities of generative AI in risk modelling and management, financial institutions that adopt these technologies are likely to be at a significant advantage. Investors can make faster, more informed decisions, identify emerging risks, and tailor their services to individual customer needs.
The technology offers a flexible and more encompassing approach to estimating the likelihood and nature of negative investment scenarios than traditional methods.
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.
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.
“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.
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
“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,” he concludes.
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 fraudsters. Moreover, fraudsters are constantly evolving and even using AI them-
selves to outsmart detection systems.
However, generative AI can actively generate data similar to real-world scenarios, 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 detection mechanisms, the most intriguing facet of generative models and
Anton Vorobets CEO and founder,
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 TechnologiesFortitudo Technologies
transformer technology is their “intuitive” capability. Wilstrup uses the analogy of a chess player recognizing patterns on the board. Instead of calculating every possible move, human players often rely on their intuition based on patterns they’ve seen before.
“Similarly, generative AI models can spot transactions that might not match any known fraud pattern but still raise suspicion because of some inherent characteristics,” he explains.
This intuitive property of generative models, with their capability for pattern recognition at an abstract level, makes them a potential game-changer in the fight against financial fraud.
Returning to Wilstrup’s opening point: we’re in a time characterized by deep shifts due to automation, especially its dominance over routine tasks, he reflects on the potential to halt this development.
“Since the 1800s, machines and automation have had a systemic advantage. By taxing human labour but not directly taxing the work of machines, there’s been an embedded financial incentive for businesses to prefer automation,” he says and continues: “While machines don’t pay taxes in the traditional sense, they indirectly contribute to the economy through other forms of
value-added taxes.”
Wilstrup suggests a rethinking of this structure. By proposing a potential scenario with no income tax and a higher value-added tax, wages might decrease, making human labour more competitive compared to machines.
“This, in turn, could shift the balance back to human labour in certain industries, such as service sectors. Adjusting the taxation system could be a tool to balance the rapid pace of automation and its potential impacts on employment. It’s certainly a perspective that is not discussed enough in current debates,” Wilstrup concludes.
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 MalmgreenEven though we are no longer in physical contact with our bank or bank advisor as often as before, it doesn’t mean that we can settle for less service. On the contrary. Both individuals and companies expect not only more service but also more specialized and customer-specific service. The competition for customer favor has simply shifted from physical bank branches to digital ones. This is evident at the Danish IT company BEC Financial Technologies, which develops solutions for Danish financial institutions. Deputy CEO Lars Malmberg is confident when he studies the feedback from the 17 banks in the BEC community.
“Customers are continually demanding more from their bank and the services it can offer. We have seen this very concretely in connection with the increased focus on sustainability in recent years. This has led us, in close collaboration with one of our member banks, Nykredit, to speed up devel-
opment in this area. As one of the first deliveries we have developed a solution – a so-called ESG score - that allows customers in Danish banks, through their mobile banking solution, to see how their investments perform in terms of ESG, Environment, Social, and Governance. The solution is the first of its kind in Denmark, several banks have already started using the new feature, and Lars Malmberg expects that more banks will join in a relatively short period.
Tonny Thierry Andersen, member of the Executive Board and Head of Banking at Nykredit, explains that in their daily interactions with customers, they have experienced general satisfaction with Nykredit’s mobile banking solution. However, there was a need to improve functionality in the investment area.
“Market dynamics meant that we not only wanted to improve in this area but also, to do it relatively quickly. The
question then was how we should approach the situation and how we could not only match but also surpass our colleagues in the industry. In principle, we knew where we wanted to go when it came to the new functionality in our mobile bank, but at the same time, we had to ensure an agile organizational structure whose primary purpose was to support the new features,” explains Tonny Thierry Andersen.
Møns Bank, a smaller Danish bank in the BEC ‘community’, was also among the very first to introduce the new ESG score to their customers:
“If you wish to change the world towards the better, you need to start somewhere, and that could very well be by looking at how your investment portfolio can contribute to push towards sustainable development. With this new tool we support our customers do that – this is very much in line with the trends and interests among banking customers”Per Sjørup Christiansen, CEO Møns Bank.
This resulted in a development project based on customer wishes for new features, and according to Tonny Thierry Andersen, ESG and sustainability will bring significant change in the financial sector in the coming years. Not just because customers want it, but also because the business world continually faces new requirements when a company needs to demonstrate sustainable behavior. We can mention the new EU taxonomy, a classification system for economic activities that qualify as climate and environmentally sustainable, the equally new CSRD directive (Corporate Sustainability Reporting Directive), and the so-called ESRS standards (European Sustainability Reporting Standards), which set out specific reporting requirements.
“But our private customers also care about sustainability, and therefore it is important that ESG is not just for the elite. There needs to be a democratization
“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 by making the information accessible in an easy and simple way, including by adding the new features to our mobile banking solution. That’s where the customers are, and it’s where most interactions take place, so it wouldn’t make much sense to develop an app that might just gather dust in a corner of the smartphone. We need to meet customers at eye level,” elaborates Tonny Thierry Andersen, and he is confident that this development collaboration is not the last.
In addition to increased functionality in mobile banking, experience has been gained in form of new ways of collaboration and the team spirit and energy in this that can be used in other contexts. Lars Malmberg from BEC agrees with this view. He expresses that this contributes to a framework on how we can make more frequent deliveries to customers when desires for new functionality arise. On a more general level, he states that BEC has a societal responsibility to educate banks
and their customers to use digital solutions, especially because artificial intelligence will shape the future.
“Artificial intelligence is a mega-trend that will redefine many of the solutions we need to develop in the future. They are becoming more and more sophisticated, which essentially means that we need as many as possible on the technology wagon, simply to ensure that the solutions are actually used. At the same time, however, it’s important that users find the solutions we develop to be good, and therefore it’s important that we constantly focus on the good customer experience as we extend technology collaboration to areas beyond ESG,” says Lars Malmberg.
He further emphasizes the importance of customers having trust in the solutions being developed, which is also highlighted by Tonny Thierry Andersen from Nykredit. The very close development collaboration between BEC and Nykredit, which has meant that employees have been at BEC, participating in both
steering groups and various working groups, paves the way for future development projects. Not only between BEC and Nykredit but also between different actors in the financial sector. These collaborations will largely be built on partnerships, where transparency in both data and architecture is a necessity.
Both Lars Malmberg and Tonny Thierry Andersen see significant opportunities in the interaction between established actors in the financial sector and the FinTech startups that are
emerging as rapidly as mushrooms in a damp forest floor. According to Lars Malmberg, they are in constant dialogue with several of these startups, and he has no doubt that solutions from external partners will eventually be integrated into BEC’s platform architecture. So, the development collaboration between BEC and Nykredit has in several ways helped shape the future of coming development collaborations, where development and business strategy merge in an agile environment.
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.
“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.
The growing sophistication of cybercriminals and the proliferation of new hacking techniques spell danger for businesses and individuals alike, putting digital identities at risk. But with Telesign’s rapid identity verification, companies and their customers can easily safeguard their security and digital interactions—and protect themselves against unauthorized account takeovers.
“We offer developer-friendly APIs that provide user verification, digital identity, and omnichannel communica-
tion solutions. We help the world’s largest brands secure onboarding, maintain account integrity, prevent fraud, and streamline omnichannel engagement, to make the internet a safer place,” said Lee Lambert, business development director at Telesign.
Telesign offers a distinctive technology solution that analyses the behaviours associated with phone numbers. Initially, their primary objective was to assist customers in safeguarding their consumers by implementing one-time passcodes (OTPs) for authorization and verification purposes. However, as this technology became widespread, malicious actors became more adept at tricking people into divulging their passcodes or intercepting them through social engineering techniques.
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 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.
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.
“Our dedicated team of customer and carrier service managers brings a ton of expertise to the table. Additionally, our early global presence and collaborations with international companies have equipped us to expertly navigate the intricacies of diverse cultures and countries,” said Lambert.
Telesign’s ultimate goal is to offer exceptional support for clients throughout their journey and build lasting trust by meeting customer needs promptly and efficiently. This commitment also extends to maintaining strict adherence to the regulatory requirements governing their operations across disparate industries.
Lee Lambert Business development director, Telesign By Marria Qibtia Sikandar NagraEvery time Jeppe Kirk Bonde makes an investment, more than 22,000 people all over the world are automatically making the same investment. Jeppe is the most copied investor on the eToro platform and has approximately $70 million of assets under copy (AUC).
Jeppe’s track record over time has legitimately earned him tens of thousands of copiers. But, why would someone
consider copying Jeppe in the first place? Was it easy to foresee that someone would have such a track record a decade ago? These questions and more go to the heart of the unique CopyTrading feature that eToro offers.
Another way to invest
eToro’s CopyTrader feature gives you another way to invest. Whether as part of a traditional portfolio or in place
of it, when you use CopyTrader, you are making a new type of investment decision. Instead of analyzing and researching various companies, you are evaluating various investors to see who fits best with your investment goals.
In deciding whom to copy, you can see an investor’s strategy in their profile, you can also view their risk score, current portfolio make-up, past performance broken down into months and years, number of copiers, followers, assets under copy (AUC), check out their feed posts and even ask them questions. After analyzing all of the information, it is your job to figure out which investor best aligns with your investment objectives and how much money you are willing to invest with them.
Jeppe’s strategy
Jeppe Kirk Bonde believes there is a formula for beating the market. He believes in researching companies down to the smallest detail and diversifying investments. Fundamental analysis is a key tool when you want to find the undervalued stocks.
“Too many investors end up looking at how the last quarter has been for the companies and predicting what will happen to interest rates, instead of diving into the companies and understanding them,” says Jeppe Kirk Bonde.
He has an insatiable desire for knowledge and is willing to spend days on indepth research. His process for choosing companies can take about a month where he sifts through numerous data using certain criteria before settling on which companies to invest in.
“For me, it’s about what return a share can deliver throughout its `lifetime’. What are the companies ultimately worth? What do their strategic options, competitive situation, culture and management look like? Next, I look at what they earn now and what they will earn in the future. If the situation changes, I will sell the share,” says Jeppe Kirk Bonde.
Currently, Jeppe Kirk Bonde owns shares in 60 companies across a wide range of sectors. The portfolio contains everything from technology, banking and healthcare shares to energy, raw materials
and property shares. However, despite the diversification, he sees one theme that will shape the stock market: artificial intelligence — or AI.
“AI is one of the biggest themes — for the companies that want to make money from providing services within artificial intelligence, but also the companies that want to make money from using the technology,” says Jeppe Kirk Bonde.
After explaining his strategy in theoretical terms, Jeppe gives an example of how he implements it with the well known company, Nvidia. This company has become the symbol of this year’s AI boom, and is a stock that has been a fixture in Jeppe Kirk Bonde’s portfolio in recent years. Recently, however, he sold his shares in the company.
Why?
According to Jeppe, Nvidia’s valuation has become overly optimistic. “A large part of the value lies in the low probability that a huge amount of value will be created. Now Nvidia is not just priced to be a healthy company that makes chipsets. The price is based on the fact that Nvidia is a company with the smartest engineers in the world, who work with the most exciting technology.”
Jeppe Kirk Bonde warns that there is a risk that others will win with the medal. He, therefore, prefers to look at companies that already have a healthy core business, but have the resources to develop the solid AI solutions that will be the winners.
CopyTrader adds another investing dimension to the many trading options and tools offered by eToro. It allows you to benefit from the wisdom and experience of thousands of investors, and you have numerous tools to make an informed decision. Nonetheless, remember that when you copy someone, be smart about it, find the person that best fits your investment goals.
Even if you choose not to copy an investor, just by looking at other people’s profiles with a profitable track record you become smarter. You see the companies they invest in, their strategy, their posts and you become a 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.
Integrating Neonomics’ open banking payment solution into Spense’s services offers the end user a seamless and cost-efficient payment experience.
Technological advancements propelled by shifting consumer expectations are driving significant transformation in the automotive industry. Within this dynamic landscape, one area that presents immense potential for improvement is the user journey. If we look at it in the realm of payments, open banking is quickly mobilizing as a disruptor in the payments industry offering a more seamless, secure and cost-efficient way for businesses and users to complete transactions, compared to card payments or manual bank transfers.
“With the increase of automotive companies moving their purchase experience into online channels, businesses must enable a seamless purchasing process in order to retain increased purchasing traffic, increase conversion rates and stay competitive in the market,” states Christoffer Andvig, CEO of Neonomics.
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
open banking technology. Neonomics, a provider of open banking solutions, and Spense, an innovative player in the field offering financial solutions for the automotive sector, are joining forces to revolutionize the way payments are made for high-value transactions such as purchasing cars and settling automotive repair bills.
“We envision a transformative future for open banking in the automotive sector, marked by seamless and secure transactions,” says Jonas Lisgård, Founder of Spense. “As a forward-leaning company, Spense envisions that open banking payments will become one of the most popular choices for conducting financial transactions in the automotive industry. Our partnership with Neonomics provides the technological foundation to offer our customers a cutting edge and secure payment method that aligns with the evolving
demands of the modern consumers.”
Spense has to date built an impressive customer and partner base including Porsche, Skoda, and Cupra.
With Neonomics Pay-from-Account feature, Spense has broadened its range of customer journey options, in which customers can easily conduct direct account-to-account payments using BankID or other authentication methods without leaving their web browser.
“The foremost advantages are the time saved through real-time payment tracking, enhancing transparency and reducing uncertainties,” adds Lisgård. “This solution provides streamlined transactions, and the convenience of initiating payments directly from their bank accounts. This ensures a seamless and efficient payment experience for the end user.”
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.”
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’ services. Therefore, they’re dedicated to eliminating unnecessary complexities in order to complete transactions.
“User experience is a cornerstone of our payment solution development. We prioritize creating intuitive and seamless experiences for our customers,” shares Lisgård. “By providing advanced open banking technology that streamlines transactions and offers real-time tracking, we are delivering a more efficient, secure, and user-friendly payment experience, aligning with our commitment to elevate customer satisfaction continually.”
As open banking is slated to become a cornerstone of payment processes in the automotive sector, the way forward looks promising. “For Spense and Neonomics, this trend presents ample opportunities,” concludes Lisgård. “For Spense, it means being at the forefront of payment innovation, enhancing customer experiences, and expanding its user base. Neonomics benefits by showcasing its technological prowess and expanding its footprint in a rapidly growing industry, further solidifying its position as a key player in the open banking ecosystem.”
Christoffer Andvig CEO, Neonomics By Marria Qibtia Sikandar Nagra Jonas Lisgård Founder, SpenseNormative 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
The financial sector is indispensable in the transition to a net-zero economy. According to the McKinsey study
“The net-zero transition: What it would cost, what it could bring,” about $275 trillion must be allocated by 2050 for this transition. This mandates efficient direction of funds towards the right technologies and businesses to enable net-zero transition. However, a lack of access to data makes this hard since data provides transparency and guides decision-makers in determining where investments should be directed.
This is where carbon accounting becomes crucial “it provides businesses and financial institutions with a comprehensive overview of their greenhouse gas emissions, reveals carbon-related risks in their portfolios and investments, and empowers them to track their emissions reduction progress. With the insights gained from transparent, comprehensive carbon accounting, organizations can make informed decisions to support the net-zero transition”, shares Dr. Alexander Schmidt, Head of Science, Sustainability and Climate Research at Normative, a leading carbon accounting engine.
Synergistic intersection of software and advisory services
Normative presents a seamless intersection of software and advisory services through carbon accounting solutions. They have dedicated climate strategy advisors for each account specializing in specific sectors. This means that the financial services industry advisors are assigned with deep knowledge
of the industry, experience working with similar businesses, and knowledge of best practices. Their experts guide financial institutions from the initial data collection phase, to determining a baseline, setting climate targets, and planning reduction initiatives, and through the value chain engagement required to reach net zero. Also, Normative continues to expands its offerings for the financial sector, recently launching a new product release for venture capital firms, private equity companies, and other financial institutions, automating the process of calculating financed emissions.
Driving sustainable finance Normative helps financial institutions and other large enterprises go beyond mere carbon emission tracking by providing comprehensive support in developing effective sustainability strategies. “Essentially, there are two key challenges that companies face when it comes to embarking on the path towards sustainability. The first challenge is to understand the intricate landscape of regulations, regional variations, and standards. This understanding is vital, particularly in the realm of carbon accounting, where methodological guidance is much needed. The second challenge revolves around data, specifically related to financed emissions. This data is not readily available within a company’s system and requires active efforts to make carbon emissions transparent. And since financed emissions can be 700 times larger than the emissions from a financial institution’s own operations, there is a dire need to
gather accurate data on an institution’s investments,” remarks Dr. Schmidt. This is where Normative’s product and expert guidance come through in helping companies comprehend regulatory frameworks and intelligently automate the screening of financed emissions. A case in point is Zurich Insurance Group, where Normative is helping it drive sustainability throughout its supply chain. “They have set targets to ensure that 75% of their managed procurement spend aligns with science-based targets for emissions reduction by 2030. To support their suppliers in achieving these targets, Normative offers automated carbon calculations to Zurich’s suppliers to assess their progress. Suppliers can then craft their own net-zero strategy and set Science-Based Targets. This not only enhances their reputation but also demonstrates their commitment to sustainability,” adds Dr. Schmidt.
Addressing the complexities of the sustainability space is crucial, especially considering the rapid evolution of regulations and standards. Normative has experts across the company who contribute to tackling these challenges.
“At the forefront, we have our climate strategy advisors who monitor potential changes to accounting standards and industry-specific requirements. They ensure that customers are well-informed and supported in their sustainability efforts. In the background we have sustainability engineers who work with our emission factor databases, ensuring
that we have the latest scientifically vetted and transparent emission factors available in our software. Lastly, we have the science, sustainability, and climate research team that stays closely connected with regulators, academia, and NGOs. Our goal is to not only stay updated on regulatory developments but also contribute to streamlining and consolidating the industry by advocating for comparable and consistent standards,” concludes Dr. Schmidt.
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 FrierAistorically, 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 groundbreaking 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.”
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 partnerships, emphasizing the involvement of non-financial organizations in this new ecosystem.
The bank has had conversations with major retailers, conglomerates, and even gas station chains, pondering their role in facilitating open banking. A significant driving force is the intent to lessen reliance on card networks, which might also lead to cost savings.
“It’s not just about that; it’s about enhancing the user experience and the wealth of information it provides. There are opportunities, but the killer application is still not with us. Yet,” Ágústarson says.
Regardless the doubts of open banking, technology has had a significant impact on the banking industry, bringing about monumental changes. Among the most notable of these changes is the empowerment of everyday banking
consumers due to the rise of digital platforms and the spread of API’s.
“One of the most profound changes is how technology has empowered the average consumer. They are no longer at the mercy of a select few bankers or restricted by the limited offerings of their local banks. With online platforms, they have a plethora of choices at their fingertips,” says Sarah Häger, CCO at Enable Banking.
Häger believes that true innovation arises from the combination of existing elements. Using the analogy of how Apple combined the functionalities of different devices to create new products like the Apple Watch or the iPad, she emphasizes that merging various interfaces, competences, and technologies can birth unprecedented innovations.
“The first generations of an iPhone weren’t just a phone; it combined a camera, GPS, music player, and more to redefine smartphones. Similarly, open banking isn’t just about opening up data.
It’s about reimagining how various financial services and technologies converge to serve the modern consumer. It’s often not about creating entirely new innovations but combining existing things in new ways,” she explains.
For customers, this approach offers a fresh perspective, especially in banking. They aren’t restricted to traditional banking viewpoints.
“Consumers may soon approach banking from a perspective driven by their shopping habits or lifestyle needs,” Häger observes, and continues:
“This phenomenon isn’t new. Think of credit cards offered by retailers. I’m not looking for a credit card, I’m looking to optimize my finances or to make secure transactions so that I can get my money back if there’s a fraudulent payment. However, the scale at which non-financial entities, from tech giants to e-commerce platforms, are entering the banking sector through open banking is unparalleled,” Häger says.
One of the intriguing prospects emerging from open banking is the concept of alternative credit scoring. It presents potential opportunities, especially for the underbanked – those who are stuck in a catch-22 situation: they can’t get credit because they don’t have a credit history, and they can’t build a credit history because they can’t get credit.
“The model could offer a middle ground, in contrast to the other extreme of predatory lending, such as microfinancing that lends to almost everyone but hikes up interest rates and aggressively pursues repayments,” says Ágústarson.
He also points to the fact that many SMEs might be underserved because traditional banking models might not cater to their unique needs, especially
when it comes to low-value transactions that don’t warrant manual approvals and highlights Danish Moneyflow as a good example of a startup that has managed to capitalize on the underbanked segment thanks to PSD2.
Häger shares her personal experience with the challenges of being underbanked, emphasizing the limitations of traditional banking systems in assessing creditworthiness across borders.
Sarah moved from Germany to Sweden while being employed for 8 years in total by the same bank. Upon her return to Sweden, despite her continuous employment, she faced challenges in obtaining a credit card because she lacked a local credit history. This shows that even someone with a steady job at a bank can face challenges due to systemic limitations.
“It went into the absurdum, where I escalated my case internally where I was handed an exemption when I explained the story. But that was just because I was employed by the bank. Imagine everyone else moving across the countries not being able to,” Häger says.
With PSD2, new platforms can assess a person’s creditworthiness based on their financial behavior in another country. But this is something most traditional banks are not able to offer yet.
“A more flexible and inclusive approach to credit assessment can help newcomers or individuals who frequently move between countries. Residents in the Öresundsregionen, where Swedes and Danes live and work across borders, as well as between Norwegians and Swedes also encounter these issues due to their cross-border movements,” says Häger.
VHow do established banks navigate the evolving landscape of financial technology, and what holds them back?
Häger points out, traditional banks often face challenges adapting to these innovative systems:
“Banks typically take a long time to make decisions because they want to ensure they don’t commit any major errors. A significant mistake could result in a monetary penalty from the FSA or ultimately result in a bank losing its license, effectively ending its business operations.”
Häger believes that the naturally riskaverse nature of banks makes them slower in adopting and benefiting from innovations like open banking. Traditional banks once held the lion’s share of power and customer relationships,
and owning the customer journey from start to finish.
“With the rise digitalisation and new fintech ventures, banks are transitioning from this direct ownership model to more of a partnership or “partner sales” approach. This new model is something many banks are grappling with as they’re not accustomed to it,” she argues. This decentralization of power is causing a significant change in the banking industry’s structure and environment, making it more competitive and challenging.
Ágústarson acknowledges that competition has been looming and that many banks are observing what competitors and newcomers in the industry are doing.
“It is risky, as you might fall behind. Therefore, we’re working to strengthen our foundation by establishing a robust
technical infrastructure with identity features, APIs, and security. We’re also focusing on developing partnerships with lower-risk entities that offer clear benefits,” Ágústarson says.
Ágústarson recognizes the significance of Europe’s PSD2 in open banking but stresses the broader potential of open finance. He believes there’s valuable data and functionalities outside the realm of PSD2, including processes like loan origination and digital identification.
“From our perspective, leaning solely on standardized interfaces could push us towards commoditization, diminishing our unique edge. Thus, we champion the idea of cultivating select partnerships, placing a premium on bespoke solutions rather than generic ones,” he concludes.
Everyone deserves the opportunity to participate in a global economy beyond their own borders.
By Marria Qibtia Sikandar NagraIn an increasingly interconnected and globalized world, the importance of access to financial services on a democratic basis cannot be overstated. This is where Inpay’s global payments network comes through and catalyzes financial inclusion by breaking down barriers and connecting financially advanced markets with underserved regions.
“We seek to democratize money transfers on a global scale by making them faster, easier, more secure, and transparent. This is the core of our mission. By making payments accessible, we empower individuals and businesses to participate fully in the global economy. This approach aligns with our belief that everyone with good intentions should have equal access to financial services, regardless of their background or location,” shares Thomas Jul, CEO of Inpay.
While traditional banks may suffice for many, when transactions involve moving out of SEPA or dealing with complex scenarios, Inpay emerges as a far superior solution, providing speed, security, and transparency. “Our solutions ensure that money transfers are transparent to the parties involved in the transaction, and we ensure affordability by minimizing the number of intermediaries in the chain. Our onboarding process may be thorough but guarantees stability and a higher
completion rate than many of our competitors. Today, we complete more than 99% of payments for our customers,” adds Jul.
Offering a tailored set of capabilities to cater to the diverse needs of its clients, whether it is A2A (Account to Account) transfers, digital payment solutions, or cash remittance services, Inpay stands as a market-leading payout provider, offering exactly the right global reach to penetrate markets that are traditionally challenging to enter. It acknowledges the immense potential that exists in these markets. So, by establishing partnerships and leveraging its network, it enables its clients to navigate regulatory complexities, overcome logistical hurdles, and access previously untapped market bases.
“The main focus of our business is addressing these kinds of challenges. While many others may find them too complicated, we thrive on solving them. We have worked, for example, with a financial institution in the Middle East that needed to transfer funds into harderto-reach parts of Asia on behalf of their customers. And we are working with the Danish Red Cross, to address the high costs and complexities of sending money into Myanmar. With us, they were able to reduce costs and simplify the payment process significantly.” shares Jul.
Inpay recognizes the critical role of regulatory compliance in building trust and fostering transparency, especially in underserved markets. These markets often face higher risks of financial fraud and money laundering due to a lack of consumer protection measures. So, Inpay strives to offer a robust regulatory framework that goes above and beyond the standard requirements. Their goal is to set clear standards for compliance, risk management, and customer protection to eliminate cases of financial scams.
Their operations are regulated by the Danish Financial Supervisory Authority.
“Obtaining a Danish license is significant for us. It demonstrates our commitment to operate within a highly regulated framework and provides us with a trusted regulatory body to collaborate with,” shares Jul. Hence, compliance with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations are integral to their core operations as well as built into the core technology at Inpay to ensure that it cannot be circumvented. “Our risk and compliance department plays a critical role in overseeing these aspects, supported by a three-layer approach. We put meticulous risk management, transparency, and robust regulatory processes at the very heart of everything we do.” concludes Jul.
Thomas Jul, CEO of InpayPayment 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 DelgadoFinnish Government promotes inclusivity with cards
The first of these projects was with the Finnish state treasury, which disburses 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 the immigration unit, which provides relief for refugees. Issuing cash in such circumstances opens the door wide to potential abuse, while standing in lines for handouts can also feel degrading and dehumanizing.
“It’s about inclusivity and removing stigmas,” says Monika Liikamaa, co-founder and co-CEO of Enfuce. “Previously, recipients of government aid were identifiable and often marginalized.” With the new cards, recipients can now pay for groceries like everyone else because the cards are accepted at any point of sale, fostering a sense of normalcy and dignity for them.”
Cash also lends itself to abuses. No guarantee exists that the cash won’t be used to fund vices or assist money-mule activities due to pressure
from friends or relatives. But Enfuce’s fine-tuned payment control systems can block ATM withdrawals or even limit the cards to spending in specific categories. For example, one card they issued was the “Pharmacy Card,” which can only be used at pharmacies, ensuring the funds are spent on essential medical needs only.
“It’s hard for some of us to understand the pressure some of these people receive to give away their relief aid,” Liikamaa says. “By implementing comprehensive controls, we empower the recipient to use their funds for what they need to survive.”
In a remarkable demonstration of agility, Enfuce, in collaboration with Visa, managed to conceptualize and distribute a “First Aid Card” in under six weeks. This initiative, undertaken with Welcome Place—a French neobank established by an Iranian refugee—enabled immediate relief for Ukrainian refugees in Paris.
Monika Liikamaa Co-founder and co-CEO, Enfuce
The task wasn’t small. Some of the complexities included translating terms and conditions into English and Ukrainian, as well as instructions on how to use the cards.
“Everyone pulled long hours; everyone came together,” Liikamaa says. “We all had the focus and the purpose to pull it off, and we did.” The project was completed just in time for the holiday season and is now an ongoing action in France.
Another groundbreaking initiative is the UK-based Science Card startup,
founded by a group of scientists who recognized that many small amounts can add up to significant contributions. Science Card uses a simple consumer card but lets users choose science projects they’re passionate about and round up their payments as contributions to these projects.
The team behind Science Card has partnered with leading UK universities and ensures all projects it funds have been peer-reviewed by its panel of 200 scientific researchers. All projects are also aligned with the UN’s 17 Sustainable Development Goals.
The recent Enfuce use cases showcase how payment companies can make a direct difference. But they also demonstrate how implementing digital payment solutions addresses the broader issue of how a cash-based society will continue to be vulnerable to misuse and exploitation. Enfuce’s payment technology stands as a direct defense of these vulnerabilities.
“When we started Enfuce, our aim was more than just business—it was to make a positive impact,” says Liikamaa. “Now, seven years in, we’re realizing that vision.”
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.
Monika Liikamaa Co-founder and co-CEO of Enfuce
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 FrierIt’s easier than ever before to spend money you have.
The popularity of ‘Buy Now, Pay Later’ (BNPL) services has surged, with firms like Klarna, Anyday.io, and ViaBill providing interest-free payment options for a wide range of items from associated stores, including everything from mattresses and electronics to sportswear, apparel, jewelry, and beyond.
These applications showcase a plethora of top retail brands tempting you with enticing deals, and the catch: Immediate full payment isn’t necessary.
It also highlights a trend in the financial sector where banks are undergoing a transformation.
“Banks are trying to reinvent themselves, and agile tech is moving into this space. The growth in the sector is not surprising. This will be the decade that the banking industry which has failed consumers, is disrupted,” says Sebnem Erener, managing legal counsel at Klarna.
But does spending with BNPL feel too easy? And does it encourage excessive spending among certain consumers, potentially damaging their credit scores, derailing their financial plans, and resulting in hefty fees owed to the loan providers?
Speaking on behalf of Klarna, Erener believes that BNPL is healthier than
high-interest credit cards, and it creates superior products and services for consumers, ultimately pushing Klarna to be better.
“BNPL will benefit consumers over traditional credit cards that put consumers into revolving debt of up to 40 per cent interest a month. In the longterm, this is a positive confirmation that this form of credit is better than credit cards that are charging high interest rates and that are pushing customers into borrowing more and more,” Erener explains.
In a 2022 study by the The Danish Consumer Council, when inquiring about regrets after utilizing Buy Now, Pay Later (BNPL) services, 56 per cent of those with financial difficulties expressed remorse over a purchase. In contrast, this sentiment was shared by 24 per cent of the general consumer base. Similarly, when questioning whether BNPL options had prompted individuals to spend beyond their intended budget, 56 per cent of those facing monetary issues admitted to overspending, compared to 33 per cent of all respondents.
And that presents some ethical challenges.
“This data underscores the fact that while BNPL can boost sales for businesses, it also encourages impulsive buying and potential debt for shoppers who spend beyond their means. More-
over, it suggests that many consumers might not fully consider the implications of committing to these loans,” says Jacob Ruben Hansen, economist at the Danish Consumer Council.
According to Hansen, BNPL have stimulated a fast and rash decision-making spending for consumers, when shopping online. As well as normalizing debt and having an economy where income and spending does not necessarily match.
“This is especially since BNPL broadly speaking have been unregulated and without a need for through creditworthiness checks, therefore consumers who would not be able to loan other places have had the possibility to take a BNPL-loan. That is clearly not sound financial decision-making.”
The BNPL model has significantly influenced consumer attitudes towards debt and financial responsibility. This shift has brought about various longterm consequences that need to be closely examined and understood.
“BNPL have especially influenced the attitude towards debt for young people, where we have heard people talking about it as “free money” or did not think about that they had to pay it back. The long-term consequences of that will be a very irresponsible market, where income and spending won’t
Sebnem Erener Managing legal counsel, Klarna Jacob Ruben Hansen Economist at the Danish Consumer Councilmatch 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.
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.
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 CrespoBoth the government and entrepreneurs in this ferociously motivated nation, share an insatiable appetite for success. They are eager to nurture the next deep-tech unicorn and support innovations that can change the world.
In this, our third visit in twice as many months to the Latvian capital Riga, Nordic Fintech Magazine has been by hooked by Latvia’s entrepreneurial
mindset and is the unwavering determination to compete on a global scale. With a relatively small domestic market, Latvian entrepreneurs understand that success hinges on creating products and solutions that can make a mark worldwide. “The key, is not just being good but being truly amazing” emphasizes Nikita whose vision and enthusiasm for things to come is contagious.
Several Latvian fintech companies have embodied this mindset fully. Nordigen is a Latvian financial technol-
ogy startup operating in 31 countries, that provides data analytics solutions for banks and lenders, helping financial institutions make more informed decisions and improve their risk management processes. Mintos, a peer-to-peer lending marketplace that connects investors with borrowers from various loan originators currently operates in several European markets including Latvia, Lithuania, Germany and Poland. And TWINO Group a financial technology company that operates several plat-
One of the strategies in motion 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.
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.
forms in Europe and Asia, including TWINO, Viventor, and TWINO Ventures processing roughly €1 million in peerto-peer loans every single day.
The Global Mindset with which its foremost proponents of Fintech and Entrepreneurship launch new companies is a truly distinct characteristic that sets this ambitious nation aside. According to Kazakevics, this stems from the necessity to export their products and compete with larger markets, a reality they share with their Baltic neighbors,
Estonia and Lithuania. The goal is clear: create globally successful products and services right from the outset.
Latvia’s small market size can be both a blessing and a challenge. While it facilitates fast growth and innovation, it also presents hurdles when it comes to attracting investment capital and talent. Nikita points out that geopolitical factors, such as regional conflicts, have impacted foreign direct investment. However, Latvia is actively working to change these perceptions.
Latvia is intent in playing a pivotal role in space exploration, aiming to put Latvian technology into the lunar Gateway Expedition. The country is methodically working towards this goal, showcasing its dedication to pushing boundaries and expanding its presence on the global innovation stage.
Latvia’s hunger for success, combined with its unwavering commitment to innovation and sustainability, paints a promising picture for the future. As we are left with the lingering sense of excitement after listening to Nikita’s vision, it is evident that Latvia is a star is on the rise, and the world should be ready to witness its unstoppable journey to greatness.
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.
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.
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.
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.
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.
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
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.
By Marria Qibtia Sikandar Nagra
The concept of goal-based investing relates closely to several of InvestSuite’s solutions. Be it their Robo Advisor which serves as an accessible stepping stone for those seeking automated investment assistance or their reporting tool, StoryTeller, which provides a human touch by presenting a narrative of portfolio performance and key events, their ultimate vision is to help investors stay engaged, involved and motivated in their goal pursuits.
InvestSuite collaborated with Dr. Klaus Harnack, author of ‘The trust mandate’ to embark on comprehensive research by leveraging insights from behavioral studies to explore the trends in goalbased investing. Conducted across Europe, including Denmark, Sweden, Finland, and the United Arab Emirates, this research has yielded valuable insights from the responses of thousands of participants. Bart Vanhaeren CEO and Co-Founder of InvestSuite and Sven Moons, Customer Insights Expert at InvestSuite share some of the key findings of this research and explain their implications on both InvestSuite’s vision and its offerings.
Some notable insights from the Research:
One notable finding from InvestSuite’s research relates to the specificity of investment goals. As per psychological theories on goal pursuit, setting specific and challenging goals tends to enhance task performance, making it easier to track progress and stay motivated. “We discovered that in Europe, particularly in
Denmark, goals tend to be more general and lacking in specific details. However, in the Emirates, we observed the opposite, with individuals being much more specific about what they want to accomplish. This disparity presents a challenge for European financial institutions, as vague or otherwise ‘fuzzy’ goals may hinder progress towards desired outcomes,” shares Moons.
Another significant finding is on the time horizon of goals. “More than half of the people in the Nordic region expressed uncertainty about their time horizon, with an additional 24% stating only ballpark estimates of five or ten years. Specific dates for achieving goals were rare,” adds Moons. So, when it comes to goal-based investing, it is important for financial institutions to emphasize the importance of defining time horizons during the onboarding process. This would involve encouraging individuals to consider their time frame together with their desired outcomes, risk tolerance and other variables, so as to help them establish clear objectives.
The research also explored the psychological concept of implementation intentions. Forming implementation intentions is a tactic that involves specifying the behavior one will perform in the service of a goal and the situational context in which one
intends to perform it. They are usually described as ‘if-then’ scenarios. Such as, ‘If I receive my salary, then I will invest 5% of it in my fund’ or ‘If there is a market correction and stocks are cheaper, then I will put more money into my investment account’.
“By getting investors to first commit to certain implementation intentions and then sending them cues as opportunities to react, financial institutions can automate good investment behavior. The kind that helps them achieve their goals without too much hassle or need for self-control” reveals Moons.
Key Implications on InvestSuite’s vision and strategy
InvestSuite is integrating insights from Sven’s research into their solutions to continuously improve their solutions and offer a more user-friendly and effective investment experience for their clients. “Unlike other platforms that offer a wide range of 20-30 goals for users to choose from, InvestSuite aims to offer specific goals to avoid overwhelming users with an excessive number of options that may confuse them”, shares Vanhaeren.
This recent study on goal-based investing has also highlighted the importance of personalized strategies for financial institutions. Rather than adopting a one-size-fits-all approach,
institutions should prioritize understanding each client’s unique needs 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 longer-term and potentially safer 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 appreciate staying involved. “While long-term investors don’t require constant updates, we plan to provide regular news and information on portfolios. We may also suggest actions such as opening a portfolio for their family or updating their risk profile. We understand that posing too many questions can lead to user fatigue so we’re mindful of striking the right balance,” affirms Vanhaeren.
The findings from this research are integral to InvestSuite’s design process influencing both significant and subtle aspects of its platforms. “Research insights even guide us in determining the placement of buttons, such as the withdrawal button in an investment app, which turns out to be considered very important by users” adds Vanhaeren.
Looking ahead, InvestSuite has an exciting initiative in the works- a goal-based feature in collaboration with Franklin Templeton. This joint venture, catering to clients in the Middle East, Europe, and the Nordics, aligns closely with their ongoing research and aims to assist individuals in achieving their specified financial goals. “Through this partnership, we’re developing a Robo Tracker that allows users to set quantifiable goals. The Robo Tracker monitors their progress, provides recommendations if they veer off track, and offers actionable steps to realign with their goal. It will definitely provide users with a clear path toward their financial objectives, enabling us to guide them and support them throughout their investment journey,” concludes Vanhaeren.
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 DelgadoAlthough the insurance sector is typically considered the Fintech laggard, Nordic insurance giant Tryg A/S doesn’t fit that mould. The company’s Nordic Innovation Discovery department, headed by Line Dalsfort, actively explores new trends and product development with a seven-year horizon.
Tryg’s partnerships in this space typically cover the MVP phase only, with the option to proceed further if a clear value proposition exists for both parties.
In an interview with NFM, Dalsfort sheds light on this program and what Tryg expects of potential partners.
The program’s focus Tryg’s Nordic Innovation Discovery department focuses on embedded
solutions and the API economy, aiming to seamlessly integrate insurance into various platforms and products. Its purpose is to optimise operations, test new technologies, and thereby drive product development.
But innovation isn’t a linear journey. By definition, it requires exploring unknown territories to discover if they might lead somewhere. Within the boundaries of the Tryg brand and the company’s longterm goals, the company is willing to consider unconventional partnerships to see where they might lead.
One such partnership was a successful co-creation with PRECURE, a Danish manufacturer of wearables that collect employee movement and muscle data to determine if non-optimum patterns exist that could lead to
work-related musculoskeletal disorders (WMSD).
Although neither Tryg nor PRECURE saw immediately what value each could bring to the other, the co-creation process led to a recognition that PRECURE’s tech could truly help educate people about how to take care of their bodies at work, potentially leading to higher efficiency and reduced sick days.
“My first job was in workers’ compensation in the public sector,” Dalsfort tells NFM. “ I saw first-hand what damage many years of lifting things incorrectly can cause to a worker’s body. This project made a huge impression on me because I saw how co-creation can lead to such a positive impact.”
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.
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.”
Startups that recognise this purpose and how they can help Tryg achieve it will have far better chances of securing a powerful partnership.
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 IDEMIATheir core of R&D specialists— which includes a team of biometric and crypto experts—has helped to produce powered payment cards and innovative solutions such as biometric-enabled payment cards, API-first digital card services and identity proofing and verification services.
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 part of IDEMIA’s DNA and has been for many years.”
Digital First Services
Customers today expect immediacy, and one of IDEMIA’s solutions to answer this need is its suite of Digital First services, enabling card issuers to enrich their mobile banking app with digital card-related features. Using IDEMIA’s easy-to-integrate APIs and
SDKs, banks and fintechs can build digital-first customer journeys, instantly issuing digital cards so customers can start shopping immediately.
IDEMIA’s Digital First services strike the right balance between trust, security, and control—customers control their own card while banks can ensure proper security, supported by IDEMIA’s robust services back-end and secure front-end components to be embedded within mobile applications.
The second major aspect of its digital umbrella is the IDEMIA Token Platform, which contributed in tokenizing and provisioning more than 400 million payment tokens. IDEMIA is the preferred token service provider of payment networks, such as domes-
tic schemes and private networks. IDEMIA Token Platform is omni-channel by design and agnostic in terms of payment use cases (proximity, in-app, remote, P2P), form factor used (mobile device or wearable), and the technology selected for proximity payments (NFC or QR code).
IDEMIA Token Platform is a comprehensive and field proven solution enabling payment means digitisation, which embraces all sub processes needed to make a complete digital card (or payment token) ready and provisioned onto a device or shared with a specific token requestor for various use cases.
“The Token Platform’s purpose is simply to enable the digitisation of payment cards on a given card network and provision these payment tokens across a variety of token requestors in order to secure in-store and online payments,” says Lillian Grosman.
In 2022, IDEMIA Token Platform won the Gold Award at the Juniper Research Future Digital Awards for Fintech and Payments.
All done with a strong focus on sustainability
IDEMIA’s long-term approach allows for continuous improvement with a readiness to adapt according to changes in legislation, trends, customer expectations, global crises, and social movements that IDEMIA has a moral obligation to respond to and support. The success of the CSR efforts relies on the contributions of everyone at IDEMIA.
Since 2006, IDEMIA has supported the UN Global Compact, the world’s largest corporate sustainability initiative. Its IMPACT program is closely aligned with 12 of the UN Sustainable Development Goals.
All products and services are developed with a strong sustainability focus, and IDEMIA’s GREENPAY products and services have become extremely popular with card issuers, e.g., the GREENPAY Planet payment cards produced from 100% recycled PVC are used for more than 70% of IDEMIA-issued payment cards in Denmark.
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.
To put it plainly: IDEMIA operates behind the scenes as a foundational pillar underpinning an immense quantity of infrastructures that drive our modern digital world.
It’s impossible to open a bank account, get a phone subscription, or open a business today without proof of identity. In the last few years, this proof of identity has grown considerably more advanced.
IDEMIA’s identity technologies play a vital role in multiple sectors in the Nordics including government, security, telecommunications, and finance.
“We work a lot with concept development and innovation within Identity,” says Lillian Grosman. “The Nordics are early adopters. We’ve always called Denmark the Living Lab because consumers are tech savvy and early to try new technologies. So, you can bring a lot of cool stuff to the Nordics and test it before taking it elsewhere.”
The Nordics are also almost cashless now—Google Pay and Apple Pay make up approximately 25% of the payment volume in the region. But the Danes still like to use physical cards, says Lillian Grosman. “I don’t think users are ready
to give up their physical cards yet, and there’s a certain comfort in having a card on hand in case systems go down.“
But there’s also a brand value to physical cards. It’s the one thing customers constantly have that shows a fintech’s logo. “Fintechs should leverage that by creating beautiful cards that people are willing to pay for.” Lillian Grosman tells a story of one company in Asia that created a card that lights up when users pay with it. In the US, another company has mood cards that change colour, while a third company uses phosphor in its cards so they light up in the dark.
“It’s all about bringing a branded and personalised experience for the user, and identity technology is deeply integrated with that regardless of whether the card is digital or physical,” says Lillian Grosman. “Using IDEMIA’s suite of technologies, fintechs have everything at their fingertips to create that experience across both physical and digital realms.”
The special case in point is IDEMIA’s F.CODE card which uses a biometric sensor instead of a PIN. Users thumb the chip to authenticate a transaction. The card is in particular adapted to assist visually impaired users, and it
comes just in time for Europe’s upcoming Accessibility Act.
But the card has an immense brand value in itself and is just waiting for the right fintech to pick it up and offer it to users. Who hasn’t forgotten their PIN at least once in the last 12 months?
Technology enabler, open standards and partnerships
IDEMIA has contributed to the launch of the White Label Alliance (WLA), in response to increasing demand for next-generation, independent solutions. WLA sets vendor-independent standards for contact and contactless cards, mobile, payment terminal acceptance, and other form factors. WLA is dedicated to developing an open, independent EMV standard that domestic payment networks and closed-loop retailers can use without any fees. The standard plugs into JCB’s licence-free kernel that already ships with payment terminals, allowing private-label brands to create cards for any use, without the burden of card fees, and that will work with existing terminals.
IDEMIA uses its technology to make the world a safer place. As a global
market leader, IDEMIA works directly with Fintechs, Financial institutions, service providers, payment schemes, authorities, and any other organisations with the same focus as IDEMIA.
• 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
IDEMIA solutions ease and secure the interactions between people, objects, companies, governments, and everything in between in both the physical and digital world
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 DelgadoDanske Bank’s Forward ‘28 strategy is levelled at improving the customer experience through providing a more tailored and holistic advisory experience centred around a digital front door.
The bank invested significant resources into the strategy, which took nine months of resource-intensive planning to complete, and was based on a comprehensive survey of 20,000 people in the Nordics.
“Preparing for this strategy was one of the bank’s most extensive efforts I’ve ever personally observed,” says Christian Bornfeld, Head of Danske Bank’s Personal Customers Unit. “Considering what the bank has recently gone through, we wanted to take the opportunity to truly take an outside-in perspective and thoroughly understand what customers are looking for.”
The bank is well underway in finalising the challenges of the previous five years, and its Forward ‘28 strategy is its biggest move to strengthen and reaffirm its long-standing history in Denmark and the Nordics.
The bank is not “doing digital just to do digital” but rather developing a business model that combines strong digital solutions to offer convenience
and holistic advice for its customers in their everyday lives.
The bank’s survey results revealed, among other things, that customers expect banks to be better able to adapt to their needs. Another revelation was that customers want simpler offerings, tailored to their individual needs. They also don’t want to be bombarded with offerings they don’t understand.
Danske Bank intends to solve this through a modular solution that provides a range of simple base offerings that customers can choose, with the option to select add-on services for more personalised needs. The bank will use customer data and interactions to best propose suitable offerings based on the customer’s needs and preferences.
The Bank intends to fundamentally change a customer’s banking experience through its innovative engagement model. It will move over to a “digital front door” solution where processes are re-thought towards a digital-first model, with the flexibility to cater for specific needs or events that require human-led advice.
“We’re asking ourselves how we can become a great bank for families, young people, elderly people, and people with different preference profiles,” says Bornfeld. “Customers want us to look at them more holistically, offering
them more than just products, but also looking at their economy, and anything else specific to them.”
The digital front door aims to be the doorway to whatever customers need. Regulatory factors come into play. Banks are limited by regulations as to how wide their offerings can stretch, but Danske Bank’s vision is to provide whatever people need help with, within those regulatory confines. Those needs could encompass family needs, safety, peace of mind, health and well-being, generational transitions such as parents helping their children buy their first home, or life planning. It might even go as far as recommending legal services or career coaches to help people transition into a new career path or into retirement.
“Not all of these offerings will create a financial impact for us,” says Bornfeld. “But it will increase our relevance towards our customers and ensure a deeper relationship with them.”
Danske Bank already has one of the strongest digital platforms in the Nordics. To strengthen that, it has partnered with Infosys, a massive multinational software services company with over 300,000 employees, and Infosys bought Danske Bank’s IT branch in India.
Infosys offers Infosys Topaz, an AI-
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.
“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. “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.”
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 models receive inputs through one layer, process them, pass the results of that process to deeper and deeper layers, and these finally combine into an output. The structure of those hidden layers is what helps AI process both the meaning and the context of a block of text, but it’s a black-box process that data scientists still don’t fully understand.
“AI isn’t a silver bullet, and it certainly won’t replace advisors in its current form,” says Bornfeld. “But it does have use cases, particularly in summarising texts or consolidating inputs from external sources that advisors can then use, and we’re already using it for that.”
Three things to know about partnering with Danske Bank
The bank recognises that partnerships are essential in its new strategy. It has historically pursued larger, more traditional partnerships, but is open to establishing new partnerships that bring mutual benefit.
When looking at assessing partnerships, three assessment criteria are key
“We have to make sure our visions are aligned,” says Bornfeld. “That might sound simple, but we’ve experienced several examples where both parties had a different definition of success, so that needs to be explicitly defined.”
Fintechs should also consider their ability to scale. For a product or service to be interesting to a large bank,
the potential users should be in the millions rather than the tens of thousands, and fintechs should pay close attention to how they can realistically scale to those levels.
On the regulatory side, the bank has simplified much of its paperwork and created several boilerplate documents to prevent overwhelming new fintech partners with legalese. “But fintechs should
also recognise that this is a regulated sector,” says Bornfeld. “We don’t do regulation because we enjoy it, but because it’s a characteristic of the industry.”
Tradition balanced by agility Danske Bank is a pillar of Danish society, and has been a major contributing factor in Denmark’s transformation from a primarily agrarian society to the economic force it is today.
In 1871, it was the first bank in the country to directly serve the farming community, in contrast with the trends of the time. That decision significantly impacted the agricultural sector’s ability to grow because it finally had access to capital, a move that would forever change the course of the Danish economy for the better.
Fast forward 150 years, and Danske Bank has played essential roles through periods of deflation and inflation, housing booms, workforce changes, and globalisation. It expanded into a Nordic bank, and became the leading bank in digital solutions about 7 years ago.
The bank currently serves over 3 million customers, the largest number in Denmark. Its Forward ‘28 strategy leans on the respect the institution has earned over 150 years of blazing new trails that others eventually follow, but it’s also adapting proactively to a new level of agility so it can better serve the customers that depend on it.
“We’re relieved to finally be able to look forward after a few years of having to be inwardly-focused while we repaired and restructured a few fundamentals,” says Bornfeld. “We paid extensive attention to understanding the customer in this strategy because, moving forward, we’d like people to assess us on our execution and daily delivery, unbiased by any preconceived ideas of our brand.”
Preparing for this strategy was one of the bank’s most extensive efforts I’ve ever personally observed.
Christian Bornfeld, Head of Danske Bank’s Personal Customers Unit
September 2023– Pleo announces partnership with Banking Circle for greater payment volume capacity and faster settlement times. Banking Circle is a member of the UK Faster Payments Service (FPS), as a direct participant for GBP. Through its partnership with Banking Circle, Pleo is enhancing its service with real-time direct clearing and settlement for GBP.
“Pleo was launched to transform the tedious process of managing business spending into something effortless and futureproof,” commented Thorbjørn Fink, Chief Operating Officer at Pleo. “To ensure settlements are processed just as smoothly, we need a bank that can remove complexity and process payments quickly. The Faster Payments Service with Banking Circle ensures payments are made within five minutes, delivering efficient and streamlined transactions and a great customer experience. And the partnership future-proofs us for expansion with higher than industry-average upper transaction limits.
“The partnership is also critical for our service delivery goals. There are no de-
lays in the evenings and over weekends as payments through Banking Circle don’t need to wait to be settled in bulk.
“In the first month of our partnership, we processed tens of thousands of payments through Banking Circle without a single issue or delay.”
Pleo is an end-to-end business spend solution focused on removing inefficient finance processes so that teams are freed up to focus on strategic work. The Pleo solution also means that Finance teams have immediate access to real-time data and insights. Working with Banking Circle, Pleo can now extend its value chain with the addition of real-time local and cross-border payments.
Laust Bertelsen, CEO of Banking Circle added: “With both GBP and EUR available for direct clearing and settlement on Banking Circle’s payment rails, the partnership means we can help Pleo break down age-old barriers to fast, cost-effective cross-border payments for its clients.
“We are building a super-correspondent banking network to enable faster and lower cost B2B payments regardless of borders. Being a direct participant of Faster Payments for GBP is an essential element in bringing that to fruition for ambitious, forward-thinking businesses like Pleo.”
licenced bank, free of legacy systems, Banking Circle enables payments companies and banks of any scale to seize opportunities in the new economy - quickly, at low cost.
Banking Circle S.A. is a modern correspondent bank committed to building a local clearing network for all major currencies, to deliver fast, low cost payments with no hidden fees for the beneficiary. It provides a suite of unique and award-winning banking solutions, including multi-currency banking accounts and Virtual IBANs, bank connections for local clearing and cross-border payments, all underpinned by market leading compliance and security.
Through bespoke, flexible, scalable and futureproof solutions Banking Circle S.A. is enabling financial institutions to help their customers transact across borders in a way that was previously not possible.
Headquartered in Luxembourg, Banking Circle S.A. has offices in London, Munich and Copenhagen.
business payments & card issuing, B2B Buy Now Pay Later and account-to-account payment methods.
Banking Circle Group is owned by EQT VIII and EQT Ventures, in partnership with Banking Circle S.A.’s founders. The Group entities have offices in Amsterdam, Copenhagen, London, Luxemburg, Munich, Singapore and Stamford, Connecticut.
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.
Laust Bertelsen CEO, Banking Circle
About Banking Circle S.A.
Banking Circle S.A. is the Payments Bank for the new economy. As a fully
Banking Circle S.A. is an affiliate company in the Banking Circle Group ecosystem which serves payment companies, banks, global marketplaces and online merchants through a rich set of complementary eCommerce solutions. These include global cross-border payments, accounts and liquidity management, revenue based financing,
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.
The company also has its sights set on the Baltics, bringing its plug-andplay investment solution to help firms fulfil growing retail investor demand.
By R. Paulo DelgadoAppealing to retail investors comes with unique challenges. The cohort wants diverse offerings, digital solutions, AI-powered advisory services, and a smooth user experience. Such solutions take time and resources to develop.
Investment-as-a-Service (IaaS)—providing investment functionality through APIs and modules that companies can easily integrate into their offerings— opens the door to faster times to market.
“Financial institutions have found it challenging to digitise rapidly enough to meet market needs,” says Lars Thomsen, Huddlestock’s newly appointed Managing Director for Denmark and the Baltics. “An IaaS solution would help these institutions quickly tap into the rapidly evolving retail investment market without suffering a protracted time to market.”
Huddlestock began as a personal banking app in 2014 but, recognizing a gap in the market, it later pivoted to IaaS and other digital investment solutions. Their platform allows companies to embed fully white-labelled investment products into their own offerings.
In late 2020, the company was the
first fintech to go public in Norway. The IPO resulted in a massive surge in stock price, prompting Huddlestock to pursue and close mergers and acquisition (M&A) deals in Sweden, Germany, and now Denmark. It also has offices in the UK.
In 2021, Huddlestock acquired Danish Wealth Consulting firm Visigon, which has over 10 years of experience in the Danish wealth sector, and is now opening a dedicated Huddlestock office in Denmark.
The company intends to bring the entire Huddlestock platform to Denmark and the Baltics.
“There’s a large merger wave happening between Danish banks right now,” Thomsen tells NFM. “Medium-sized banks are acquiring smaller banks, and there is also a strong movement to consolidate IT solutions in the investment banking sector. But banks are starting to recognize that this task is larger than expected.”
The sheer quantity of resources needed to consolidate these IT systems makes it infeasible to do it rapidly enough to compete in such a dynamic sector as retail investment, says Thomsen.
Huddlestock’s IaaS solution addresses this problem directly, allowing any player—from small fintechs to large
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.
“We provide everything out of the box that relates to the investment value chain,” says Thomsen. “Those companies that only want parts of the solution can select specific modules they want to implement. This could be either risk management, reconciliations, accounting, fund administration, or whatever they need. Or they could implement the entire solution instead.”
Huddlestock also offers a European regulatory umbrella and licensing coverage for its clients. If those clients don’t have an investment banking licence, they can piggyback off Huddlestock’s licence, opening the European market to them.
“Interest in retail investment is growing massively,” says Thomsen. “But technology has lagged behind the demand. IaaS lets companies chop down the time-to-market, allowing them to innovate rapidly enough to meet this growing consumer need.”
Huddlestock research indicates that the majority of neobanks offering investment services as part of their wealth solutions are doing it through IaaS. “Many neobanks are focusing on becoming profitable,” says Thomsen. “And an IaaS solution can introduce profitable new revenue streams while helping to reduce operational costs.”
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 HuddlestockFrom left to right: Lars Thomsen, Managing Director for Denmark and the Baltics & John Skajem, CEO of Huddlestock
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.
By Tom TurulaAcross the Nordics, small-and medium-sized businesses (SMEs) are in survival mode.
In Sweden, Finland as well as Denmark, bankruptcy rates have recently hit historical peaks.
Lenders targeting the SME segment are faced with challenging waters. Whether it’s legacy banks, fintechs or niche players, most lenders are evaluating their books more closely to avoid excess risk. A larger share of financing applications are rejected.
“In good times, lenders are generally keen to expand loan volumes. Now, the priority is to maintain a healthy loan book,” says Leonard Schreij, CEO at Monto, a Stockholm-based credit intelligence company. “That’s to be expected, but the problem is that many healthy businesses are being left out of the market.”
The economic turmoil brings a renewed focus on the type of information that’s
being used in credit processes. Most lenders realise that historical snapshots from annual reports are insufficient to gauge risk, so they are looking for new data sources.
Open Finance, an evolution of Open Banking, enables lenders to access a wide range of information and financial insights to form a more holistic picture of businesses.
“Real-time data sharing between lenders and borrowers is the best way to close the insight chasm in SME lending. Open Finance provides a unique opportunity for lenders to access the data they need to remain competitive. This will also increase the pool of capital available for businesses, especially during downturns,” says Schreij.
As more and more businesses run their operations from cloud-based services, the amount of data sources grows. Data from accounting, invoicing, CRM, social media and other platforms can provide the raw material for smarter lending services.
“Having an up-to-date information flow empowers lenders to optimise their portfolio and key processes such as onboarding. The better lenders can understand how inflation and market demand are affecting a business, for instance, the better equipped they are to identify low-risk, high-quality loans.”
How real-time data from accounting software can improve decisioning Metrics and KPIs. How is a business’ profit margin, cash flow, ROI, developing?
• Outstanding taxes. Are there government-funded tax payments due?
• Other lending. Does the business have active loans with other lenders?
• Accounts payable vs. receivables ratio. Can the business tackle its cash flow shortage by selling or lending against their outstanding invoices?
Rolling balance sheets and income statements to gauge performance.
Financial APIs an easy way to get started
So if the future of lending is Open Finance data, how can lenders actually get started? That’s where providers of financial APIs come in.
“As a lender, this is an ideal time to start connecting your customer base by working with a specialist data provider. Once you’ve integrated a data API into your process, it’s also important to design solid incentives to motivate data sharing, and to back that up with clear communication as to how this benefits
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
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
Source: Monto SME financing survey
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.”
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.
Leonard Schreij CEO, MontoLithuania 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 DelgadoLithuania’s “Before and After” fintech success story was initially driven by government and public institutions to bring innovation to the Baltic state. Today, the ecosystem they created is the one driving the success story forward.
“Before Lithuania’s fintech revolution, we had a very concentrated financial market,” says Vaida Česnulevičiūtė-Markevičienė, Vice Minister of Finance for Lithuania. “It made for a stable market, but didn’t encourage innovation, resulting in few products in the market and forcing prices higher.”
At that time, Lithuania launched a top-to-bottom fintech strategy, driven by the Lithuanian Ministry of Finance and Central Bank to bring much-needed innovation to the country.
The strategy worked. Lithuania was one of the first eight countries to grant access to the new SEPA scheme, and the Lithuanian Central Bank’s CENTROLink Payment System was one of the first to implement SEPA Instant Credit Transfer (SCT Inst), more com-
monly known as Instant Payments. Fintechs flocked to the country.
The country has now launched a fresh five-year fintech strategy with ambitious targets to grow its fintech sector even further.
“The entire ecosystem has changed since then,” says the Vice Minister. “We see it in how this new strategy was created. The ecosystem itself drove the new strategy, and it was created bottom-to-top this time.”
When Brexit forced UK-based fintechs to look for new European headquarters, many of those companies moved to Lithuania. The combination of regulatory stability, a highly business-friendly environment, advantageous positioning between the Nordics and Europe, talent availability, and excellent internet speeds made Lithuania the obvious choice for companies like Curve, Yapily, and Revolut.
Not only fintechs are moving to the Baltic state to set up headquarters or branch offices. The country now counts as part of its roster such major players as Danske Bank, Oracle, Telia, Wix, and many other major tech and financial companies.
“As a country, we’re fast to adopt regulatory changes, allowing compa-
nies to have an innovative business model,” says the Vice Minister. “For example, Lithuania was the first to introduce national crowdfunding regulations. By the time the European legislators came out with its own version, many of the Lithuanian companies were already largely compliant because the European regulations were so similar to ours.”
The country believes in a spirit of dialogue between the public and private sector, encouraging a climate of cooperation for the mutual benefit of both. Regulators are accessible and willing to listen or provide legal clarity as needed.
“Finance is a regulated sector and we have the necessary licensing services to support that, but fintech is about far more than just licences—the ‘fin’ part,” she says. “It’s also about the ‘tech’ part— supporting companies that help those fintechs with core business needs.”
“We understand that the ingredients that go into fintech growth are talent, regulation and funding,” says the Vice Minister.
In the funding arena, Lithuania attracted nearly €300 million in tech investment in 2022, with €67 million of that going to fintechs.
The Ministry of Finance also follows a “growth-friendly tax policy,” with multiple
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 qualifying costs for acquisitions serving technological modernisation.
The purpose of the incentives is to bring innovative products to the market. The Government has recently proposed to the Parliament even further incentives to encourage business growth and investment.
The country’s Green Finance Action Plan will bring private and public sector entities together in a joint program to create a green finance ecosystem, further attracting investment into the zone.
As for talent and people, one example of the country’s dedication to this was when it formed its AML Centre of Competence two years ago, a joint effort to share experiences in the ever-evolving subject of AML, and also to offer training to raise competencies.
“We’re also implementing Knowledge Hub Programs to increase competencies and make Lithuania a Fintech Centre of Excellence,” says Vice Minister. “This is also being done as a cooperative effort between the public and private sectors.”
With its new five-year strategy, Lithuania isn’t just betting on fintech—it’s doubling down on a proven formula for innovation, inviting the world to be part of its next chapter in financial technology leadership.
Lithuania is fast to adopt regulatory changes, allowing companies to have an innovative business model.”
Vaida Česnulevičiūtė-Markevičienė, Vice Minister of Finance for Lithuania
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 for this interview.
Thank you. It’s a pleasure to be here.
What is the most transformative trend impacting global finance at the moment?
The predominant trend I see is how the nature of globalisation has changed. The globalisation we were used to in the 1990s and the 2000s isn’t the same as what we’re seeing today. We could call this new form Globalisation 2.0. Globalisation always has profound implications for finance, technology, and economics.
In the 1990s and 2000s, we saw greater diversification of supply chains. Initially, blue-collar jobs, then white-collar jobs started getting distributed around the world. Large companies started using an integrated setup, such as manufacturing in one place and design in another.
The best example of that is this. [Ghose shows the back of an iPhone.] It used to say something like ‘Designed in California’ and ‘Assembled in China.’ This phone’s production cycle spans the globe.
People have said that globalisation is dying. We all certainly felt that way at the beginning of the COVID pandemic when the borders closed. But the pre-
vious form of globalisation had already started unravelling back in 2010 with some of the slowdowns in several megatrends caused by things such as rising protectionism, the Brexit vote, and China/US tensions. But we’re already seeing a bounce back of trade-to-GDP ratios to almost previous peak levels.
Globalisation won’t look the same as it did before. And what’s really interesting about this so-called Globalisation 2.0 is that we’re seeing huge amounts of global flows.
For example, over 90% of Dubai’s population is made up of foreigners. Vibrant, global cities such as Singapore, London, and New York produce enormous amounts of data and intellectual property that passes across borders merely by the fact of the global nature of people living there.
The GDP produced by trade ships moving from China to the West Coast of the US won’t necessarily grow faster, but we’re seeing other trade patterns emerging from this data transfer.
The movement of physical goods might have slowed down during COVID, but the movement of data isn’t slowing down. And it’s only going to grow more once we give people even cheaper mobile data and start widely imple-
menting 5G, 6G, and so on.
This globalisation will have profound economic impacts.
How would you summarise the difference between 1990s and 2000s-style globalisation versus what we’re seeing now?
That’s simple: In the 1990s and 2000s, globalisation was defined by container ships. Today, it’s driven by data.
What technologies are brewing at the moment that will change the way we bank in five years?
AI is the major technology affecting many sectors, not just banking. Banking, for modern finance, is all about data. And AI is, in many ways, all about doing things with data.
Despite some of the negativity surrounding AI, the great thing about it is that it’s a productivity boost.
New innovations typically lead to massive productivity boosts, like automobiles did in the 20th century and steam engines and electricity did before that. Historically, those boosts were mainly in the blue-collar sector.
What’s interesting now is that we’ll likely see similar productivity boosts in certain white-collar parts of the
economy and in finance over the next five years. Even more interesting is that jobs requiring physical skill might become more valuable. I don’t know about you, but I don’t want a robot to cut my hair. So, prices will probably go up in those sectors.
The matter of disappearing jobs is a common economic trend. Many finance jobs that existed 20 or 30 years ago don’t exist today. This is just a general trend over time: Jobs die, and then more jobs are created.
Economists call this the Lump of Labour Fallacy—the belief that jobs are a zero-sum equation. There’s no such thing as a fixed amount of work or a fixed quantity of jobs.
Obviously, these transitions do cause pain for some individuals. There are some negatives. But AI opens immense potential for the way we bank.
In the UK, for example, it’s extremely difficult to get personalised service unless you’re very wealthy. Sophisticated generative AI chatbots trained extensively on internal data could potentially help these customers gain insightful answers to their questions, thus further democratising finance.
How are AI and Machine Learning being adopted at the back-end in finance?
Flatpay is the brainchild of four digital Actually, banks have been using AI for
about 10 years now in the back-end. One of the primary functions for backend AI and Machine Learning is in Risk. For example, language processing has become sophisticated enough for banks to use it to carry out predictive analysis of conversations and flag potential risk cases. This has been happening in the US and the UK for about seven or 10 years.
Where do we stand with crypto and blockchain? Do these still have relevance after the AI hype?
Valid use cases for crypto and blockchain still exist. The perceived slowdown in crypto hype isn’t only due to AI, but also because of the regulatory clampdown, especially in the US. Several cases of fraud and market manipulation have also negatively affected public perception.
The majority of CBDC implementations that are currently being tested use blockchain. China has a centrally controlled CBDC that isn’t blockchain-based, but most CBDCs currently in testing use blockchain, so there’s a definite future for the technology.
A huge divide exists in the level of digitisation across markets. How should Fintechs approach this divide?
We must define what we mean by digitised. If we’re talking about internet penetration, then one thing we’ve seen
is the leapfrog effect: That is, markets with less penetration suddenly jumping ahead of more advanced markets.
I experienced that in Korea about 10 or 12 years ago. When we arrived, we were given Korean phones when we landed because our British phones only supported 3G, but Korea had progressed beyond this.
Another example is India. The cost of hardware has gone down while real income has gone up in the last 10 years. Data costs have also decreased, and a massive portion of the population now suddenly has data access. A fintech company from a more “digitised” market might be surprised to discover that these lesser-developed countries have now leapfrogged ahead of it.
Nigeria is yet another great example: They’ve had real-time payments for about 10 or 12 years through an internal system called NIBSS, yet Nigeria’s internet penetration is only about 40%. So, it’s important for fintechs from digitised zones to not jump to conclusions when entering a zone they feel is less.
Ronit, thank you so much for taking time out of your schedule to answer our questions. Thank you. It was my pleasure.
Ghose is a featured speaker at Nordic Fintech Week 2023 happening in Copenhagen from 27 Sep to 28 Sep.
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
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 FrierUp until 2022, there was higher tolerance for startups prioritizing user acquisition and market share over immediate profitability. The market was characterized by favorable circumstances of near-zero 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 closing deals in 2021 dramatically shortened, often concluding in under a month. This acceleration had the unintended effect of diminishing the emphasis on due diligence during the decision-making process. The prevailing sentiment in the business world was one of apprehension about missing out on potential opportunities.
The anxiety-driven mindset prompted many to invest without conducting their customary level of thorough investigation. However, as 2022 unfolded, a new trend began to evolve.
“We are currently experiencing the aftermath of the exuberant events of 2021, which has left the startup ecosystem grappling with a painful hangover. The present situation is characterized by a widespread downturn in various sectors of the operating world. Both valuations and deal volume have taken a significant hit, contributing to the prevailing downturn,” says Jelena Zec, director at Citi Ventures.
Moreover, the challenges extend
to the realm of venture capital where funds are actively seeking investments from their limited partners. However, this is proving to be an uphill battle.
“The struggle to secure funds is not confined to startups alone. Venture capital funds themselves are facing difficulties in raising capital from their LPs.
As a result, efforts are being made to conserve cash on both fronts, reflecting the financial strains that currently define the landscape,” Zec adds.
Founded in 2010 with mandate to invest in category-defining startups with the
potential to revolutionize financial services, Citi Ventures has built an active global portfolio of more than 100 startups including more than 30 unicorns and 28 companies that have exited via IPO or acquisition. The team’s two most recent European investments, Anyfin and Doconomy, have been directed towards the Nordics.
Zec acknowledges that investors are increasingly looking for fintech companies that can achieve a balance between innovation and sound financial management, demonstrating a clear path to profitability and sustainable revenue models. But to Zec this shift is pivotal for ensuring the success of partnerships:
“Just as in a marital relationship, it’s essential to comprehensively understand one’s partner. This notion applies not only to VCs getting to know startups but also for startups
We are currently experiencing the aftermath of the exuberant events of 2021, which has left the startup ecosystem grappling with a painful hangover.
Jelena Zec, director at Citi Ventures.
to diligently assess VCs. This reciprocal process holds critical importance.”
She argues that the focus on profitability and its sustainability is cyclical, 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 consider when evaluating potential investments,” she concludes.
Zec and the Citi Ventures team assess various aspects when evaluating potential investments, including scrutinizing the potential market and competitive landscape. They also delve into the startup’s distinct value proposition, closely examining its business model.
“Our evaluation extends to conducting a comprehensive financial analysis, encompassing an in-depth review of revenues, expenses, and cashflow as well as a thorough understanding of unit economics. This process includes performing sensitivity analyses to assess different scenarios,” she explains.
Another crucial dimension is the regulatory environment. Due to the potentially substantial costs associated with regulatory compliance, underestimating these expenses can pose a significant hurdle for startups striving to achieve profitability.
Amidst hyper growth, the intense focus on customer acquisition and expansion can inadvertently divert attention from cultivating this essential trust.
“This perspective is especially relevant in the finance industry, where the disruption of long-standing financial services clashes with the credibility of established brands that have fostered trust over centuries,” Zec says.
She points to the notable example of Silicon Valley Bank, where a crisis prompted a reversion to trusted established financial institutions like Citi. The significance of trust becomes evident in such instances.
“Constructing trust is a gradual process intertwined with consumer adoption. This process necessitates an investment of time, an aspect that startups often underestimate due to the misconception that trust can be built over night,” Zec says.
At Upfin, a Nordic venture fund specializing in early stage fintech, principal Oliver Sjöstedt is adapting to the “new normal”. Even though requirements for fundraising have increased and valuations are back to the level before the heyday, Sjöstedt looks positively at the recent trends in the industry:
“The past three years have been turbulent to say the least, with for many, a very painful adjustment period. However, there are already signs of an upswing. I am convinced we will look back at 2023 as a year where a new generation of truly exceptional companies were being built.”
Growth without considering costs
is no longer a feasible approach, and in Sjöstedt’s perspective, this shift towards sustainability is a positive one.
“Growth is still crucial, but it needs to be accompanied by a convincing path to profitability and healthy underlying unit economics. As investors regain their trust, they’ll become more receptive to lengthier and less predictable routes to profitability. Really, it’s a ridiculously basic perspective to ask yourself, ‘How could this business ever become profitable?’ Hopefully we won’t forget it again,” he says.
As early-stage investors, Upfin often lack substantial data to evaluate profitability. The priority for Sjöstedt and the team is to identify product-market fit and ensure scalability. Nevertheless, the potential for robust unit economics is essential.
“If a startup has three-month sales cycles with enterprises, we look for a payback period of under a year. As
Oliver Sjöstedt, Principal, Upfin
more late-stage fintech companies prove that their business models can become profitable, pressure to focus profitability will ease for early-stage companies with similar models,” Sjöstedt says.
But the single approach to profit does come with some risk, as investors are shifting from a singular focus on user growth to a singular focus on profitability.
“In doing so, investors end up mistakenly encouraging behaviour that undermines the venture model, where ambition, simplicity and growth are sacrificed. There is a nuance beyond the dichotomy of growth and profits; what we’re trying to avoid is mindlessly scaling businesses that can never become profitable, not create profitable businesses that never scale,” Sjöstedt argues.
But some things will never change, and venture capitalists typically invest in startups not for a modest return but for a potentially significant one. So founders should avoid getting so focused on short-term gains or metrics that they lose sight of their larger, long-term vision. They should not let immediate challenges or concerns curtail their broader aspirations.
“I’d say that the aim in regard to profitability should be towards having the ability to choose it once you’re at scale. Don’t fall into the trap of becoming too shortsighted or dampening your vision; VCs are not here to back safe paths to profitability. If you have a bold idea of how to reshape financial services for the better, let’s talk.”
Growth is still crucial, but it needs to be accompanied by a convincing path to profitability and healthy underlying unit economics.
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.
By R. Paulo DelgadoFor experienced AI companies like 2021.AI, ChatGPT changed everything. Business suddenly 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 machine learning models. Despite these models’ efficiency, they were highly resource-intensive, complex, and lacked the community code support that exists today. Europe also lacked the talent for AI, and the bank had to source people from New York and London.
After leaving the bank, Munck wondered if there was a less-resource intensive way to develop such models. That’s when he met Danny Lang, a machine learning expert in the USA who had engineered precisely these types
of platforms for Amazon and Uber, and provided valuable guidance.
After building for several years, 2021.AI became engaged with the EU three and a half years ago to help develop guidelines for building trustworthy AI.
“We recognised that, globally, there would ultimately be many regulations, criteria, and privacy needs around AI, both across jurisdictions and market sectors,” says Munck.
The company saw that its AI platform needed to do more than just support data scientists and organisations to increase their efficiency in developing and operating AI models. It also needed to deliver a full Governance, Risk, and Compliance (GRC) engine within its platform to ensure compliance with existing and future AI regulations.
They developed GRACE, which ringfences a company’s AI and ma-
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 implement LLMs responsibly, any sector can.”
GRACE offers clients a complete suite of GRC solutions, including support for in-house LLMs.
GRACE’s LLM solution is currently deployed at Rigshospitalet, a highly 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 implement an LLM using GRACE LLM Governance, then any sector can—even the financial sector,” says Munck.
For fintechs in the Nordics, AI and LLMs might be the make-break of success or failure, considering the competitive landscape.”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.”
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.”Mikael Munck, Founder and CEO of 2021.AI. Mikael
Munck, Founder and CEO of 2021.AI
Digital Consultant and software solutions provider Sprintform excels in delivering successful outcomes through partnerships, agile methodologies, innovation, and data security.
By Marria Qibtia Sikandar NagraAmid an abundance of software development companies in the market, Sprintform stands a class apart. Their chief value proposition lies in their collaborative approach towards client projects, working with them closely and embracing their projects wholeheartedly. By going beyond zero-sum games, they understand that nurturing positive relationships is essential for ensuring sustainable success. Sprintform’s experience of working with clients in the Nordics, UK, US, and Caribbean markets is a testament to their dedication to fostering and ensuring client relationships beyond engineering projects.
“We prioritize forming strong partnerships with our clients. We fully own the products, projects, and services we choose to collaborate on. This approach ensures a deep commitment and responsibility towards achieving successful outcomes. Importantly, a
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.
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.
significant
portion of our team possesses experience from both the vendor and the client sides, enabling us to understand and cater to the needs of our clients effectively,” says Andras Berczeli, Managing Director at Sprintform.
By involving stakeholders throughout the development process, Sprintform ensures that their client’s feedback is continuously incorporated and they deliver a product that meets their expectations. “Transparency and honesty are core principles for us. We believe in being straightforward with our clients, never making false promises or claiming to deliver beyond our capabilities.
This applies to both product-related aspects, such as going live or conducting customer experience-related
Andras Berczeli Managing Director, Sprintform
audits, and technology-related aspects, including code reviews,” adds Andras.
This is best exemplified in Sprintform’s contribution to a mobile banking project that had previously faced several delays and challenges. Through their active involvement in product strategy and code review process, they identified the issues causing inefficiencies and financial losses. By addressing these concerns head-on, Sprintform successfully overcame obstacles and ensured a positive outcome. This is a prime example of their ability to align digital channel development with clients’ needs, ultimately leading to success.
Channeling the power of agile methodologies
Sprintform has essentially integrated agile methodologies into the foundation of its operations. Besides facilitating transparent communication within the team, this has enabled them to be flexible and adaptable to changing customer needs.
“This flexibility enables us to adjust our
“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 perspective. Importantly, these advancements do not affect our partnerships with our customers. Instead, they empower us and our clients to accelerate product delivery,” states Andras.
Ensuring transparency and privacy
Sprintform implements rigorous protocols to safeguard client data security and privacy during development. Their approach extends beyond traditional data security measures and implements robust cybersecurity methodologies. Whether they’re working on web, mobile, or data projects, their primary focus is delivering secure solutions to their customers. “We guarantee the confidentiality and integrity of the information entrusted to us by our clients. Our commitment goes beyond securing data; it extends to developing a comprehensive approach that addresses all potential risks and vulnerabilities. With this approach, we can offer a trustworthy environment for both ourselves and our clients to foster long-term relationships based on trust and integrity,” affirms Andras.
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
Wall Street might immediately come to mind when one thinks of financial hubs.
However, if you shift your gaze across the Atlantic, Denmark is making significant waves in digital banking. According to Jannick Malling, co-founder, and co-CEO of Public.com, Danish
banks are ahead of their American counterparts in adopting and implementing digital technology.
“Nordic banks have been quick to digitize, and there’s a strong emphasis on innovative strength lacking in American banks. Nordic banks are proactively leveraging it to enhance operations, optimize customer interactions, and
elevate service delivery,” Malling says.
Such a forward-thinking approach makes the Nordic region an increasingly attractive location for tech innovation, especially when juxtaposed against the more traditional banking methods observed in the U.S.
“We should give ourselves more credit for that since it makes
an attractive environment for tech workers. That is why part of our tech team is in Copenhagen,” Malling adds.
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 concept of “at-will employment,” which allows employers to terminate employees without much notice. However, this carries legal risks in the U.S., where anyone can sue for almost any reason. So, employers end up dealing with severance contracts,” Malling says and adds:
“In Denmark, the system feels better designed. The standard three-month notice period for terminations where either party can end the employment agreement is fair and flexible. The Danish labour market seems practical, allowing companies to take risks with new hires and easily part ways if necessary.”
Malling believes that the quality of developers in Copenhagen is exceptional. They observe that while the U.S. has a more comprehensive yet more superficial talent pool because of mass recruitment by major companies like Google and Facebook, Copenhagen boasts a talent pool that may be smaller in breadth but is more profound in depth.
“Finding and retaining the right talent is always a challenge. But with us, the talents get the unique opportunity to work on an app with millions of users, pushing
products directly into the hands of these vast user bases and seeing the tangible impacts of their work,” Malling says.
Malling also experiences a mentality of long-term commitment and passion for one’s work, contrasting with the highly competitive job market in places like New York.
“In the startup culture, where we can’t always compete with giants like Google and Goldman Sachs in terms of salaries, you need employees committed to the work and the mission, not just their paychecks,” says Malling.
Jannick Malling, Co-founder, and co-CEO, Public.com
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
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 FrierImagine 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 account in Estonia and needs to go through the KYC (Know Your Customer) process. Today, she would need to provide a plethora of documents to the Estonian bank, often in paper format, such as proof of address, identity verification, business documents, and tax records.
The verification process could be lengthy because the Estonian bank might not immediately recognise or trust foreign documents. They may need additional confirmations or translations.
The back-and-forth could delay her investment opportunity, and she may face additional translation expenses or
travel to Estonia for face-to-face verification with the bank.
However, this scenario may soon be a thing of the past with the European Digital Wallet
When the European Commission proposed introducing a unified digital ID across the EU in 2021, the goal was ambitious: a coherent system for the public and private sectors. Fast forward to today, the dream of a pan-European ID system is slowly taking shape.
“Potential benefits could be faster and better onboarding and KYC processes, better customer data, and the digital wallet could even help accelerate a financial institution digitisation journey,” says Roland Eichenauer, Vice President of Business Development in Digital Identity and eID Solutions at Nets Group.
According to Eichenauer, the digital wallet is an opportunity for financial institutions to think of possible identity-based use cases that can generate new value streams by expanding on current service offerings delivered today.
“Based on what’s achievable, the digital wallet has the potential to be both cost-effective and environmentally friendly. For users, it’s about convenience, enhanced experience, and maintaining control over one’s data. Sharing electronic documents or selecting identity details swiftly and securely is essential for digital life,” he adds.
The vision of the European Digital Identity is to give EU citizens, residents, and businesses the ability to authenticate themselves or confirm
specific personal data. Every citizen can access and use a personal digital wallet within the Union for various online and offline services.
The wallet, set to be initially developed as a prototype by Netcompany and their consortium partner from Sweden, Scytales AB, will be presented to the countries of the EU and other interested parties to help implement the stipulations of the Regulation for a European Digital Identity.
Thomas Rysgaard Christiansen, partner in Netcompany, sees a natural evolution in how citizens receive their services, moving towards the digital realm.
“This is evident in Scandinavia, especially Denmark, both in the private and public sectors. While in other countries, this shift might be more pronounced in the private sector. But when using digital IDs, these might be created by other entities, be it banks or tech giants. This results in data that isn’t directly accessible to the users and might not be used in their best interest. Hence, there’s a desire in Europe to have greater control over personal data and decide who to share it with,” he says.
Netcompany is developing a standard framework to ensure interoperability across member states’ digital systems. By 2031, every EU citizen should be offered a digital ID compliant with these standards. According to Christiansen, the goal is for at least 80 per cent of EU citizens to use this digital ID actively.
“Having an ID recognised in 27 countries would simplify matters for individuals. Whether it’s for education, obtaining a loan, or making purchases, having a universally recognised digital ID in Europe makes life significantly easier for EU citizens,” he says.
For Christiansen, the goal of the new framework is to make cross-border business more seamless, viewing individuals as EU citizens rather than national citizens. That will ultimately impact financial industries, revolutionising everything from service delivery to processes like securing bank loans using digital and certified documents and income statements.
“In essence, individuals should be
able to use their ID and certified documents to access financial institutions outside their home country. The EU aims to simplify opening a bank account in any member state. In theory, a Danish citizen should find it as easy to open a bank account in Spain as a local Spaniard,” says Christiansen.
While Denmark is advanced in this digital transition, other EU countries aren’t. This digital shift may have a more profound impact in other EU nations than in Denmark, offering Danish fintech businesses expanded opportunities. However, it also introduces heightened competition, making business with Danish consumers more accessible to others and vice versa.
The digital wallet presents a mas-
sive opportunity for businesses that are early adopters and can grasp the emerging market, especially in the financial sector.
“Much like the evolution towards mobile banking, there might be a shift towards providing services directly within these digital wallets. Innovative and forward-thinking players will harness these technological advancements in expanding their market reach and redefining their service delivery methods,” Christiansen says.
While there’s a requirement to make the system available to citizens by the member states, it doesn’t guarantee its use. If it’s too cumbersome, no one will
want to use it. Christiansen acknowledges the risk of creating marginalised areas if the solution is not user-friendly due to the high-security standards mandated by the EU.
“In Denmark, we experienced how the transition to a new digital ID (referring to EasyID to MyID) can lead to numerous issues if users struggle to understand and use it,” says Christiansen and continues:
“Inequality exists in the digital realm. This is true both among the population and in the commercial sector. New businesses, for example, will require guidance and support to get started in this digital landscape. The same applies to citizens; alternative channels must be available since not everyone can navigate or benefit from these digital services, and the states must carefully consider these nuances during design.”
Christiansen emphasises that these projects are about 20 per cent technical and 80 per cent organisational, governance, competency frameworks, and other related aspects.
“We provide equal access by simultaneously making it entirely opensource and available to all. However, companies already proficient in digital services and data structure will naturally lead in this area,” says Christiansen.
Leveraging a digital potential on such a scale presents a unique challenge. While Europe, across various countries, has historically lagged in providing digital services to its citizens, transitioning to more digital interaction isn’t a straightforward process.
“In Scandinavia, there’s a high level of trust from the public in digital systems, a sentiment not uniformly shared across Europe. Even if robust digital services are introduced, there’s still the challenge of trust: will citizens accustomed to traditional methods believe in the security of a digital space?” says Christiansen.
Cultural shifts, like those seen in Denmark, are not easily achieved.
“For me, the biggest challenges are cultural rather than technical. Solutions will emerge for technical issues, but gaining widespread trust and uniformity across countries remains to be seen,” concludes Christiansen.
Financially developed countries are susceptible to the rise of financial crime, especially automated push payment (APP) fraud, as seen in the UK alone, where victims lost half a billion pounds to this crime last year. Amid this grave reality, financial institutions face the challenge of preventing such fraudulent activitiesaren’t only embroiled in a reputational risk. Still, they are also being held financially liable for reimbursing the victims, hence increasing their costs.
A deep dive reveals that the collaboration gap between fintech and banks is at the core of this issue. This enables criminals to exploit the divide and leverage multiple institutions, including crypto spaces to their advantage. This is where Salv comes through. It seeks to address this problem by resolving the gaps and ensuring a more secure financial ecosystem. ”We provide the necessary tools for efficient monitoring and analysis to empower financial institutions to keep up with the complexities of the modern financial ecosystem to stay ahead in the fight against financial crime,” shares Taavi Tamkivi, Founder and CEO of Salv.
Preventing criminal money through information sharing
Rapid information exchange among network members and financial institutions stands at the heart of a robust fight
against financial crime. While money moves within these networks, critical information about potential criminal activity often remains isolated. Salv addresses this obstacle by creating an environment that facilitates real-time information exchange between anti-fraud and anti-money laundering teams within and between financial institutions.
It advances three core pillars for
successful Fin-crime fighting- “Firstly, we believe in fostering a community that brings together crime-fighting professionals within and across organizations, establishing trust, and encouraging collaboration. Secondly, establishing agreed-upon standards for data formats, legal frameworks, data controllers, privacy requirements, and more. These standards allow different public and
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.
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 identified a customer as a victim of fraud, they would send messages to other banks involved in the transaction, requesting a halt to funds progression. This only resulted in retrieving funds in 10% of the cases. However, after implementing our Salv Bridge messaging platform and pursuing funds through these messages, the rate of reclaiming money increased to an impressive 80%. This remarkable success has resulted in the recovery of millions of dollars, potentially tens of millions,” affirms Tamkivi.
It is also worth noting that banks can promptly translate this success rate into reduced costs when they become financially liable for these losses. Banks can mitigate financial burdens and protect their customers by effectively combating fraud and reclaiming funds.
Besides sanction screening capabilities, Salv’s product portfolio encompasses transaction and customer-monitoring products. And in doing that, they offer swift verifications, data analysis, and adaptability necessary in dynamic settings. “Our unique offering allows human operators to control the checks, enabling them to process intricate payment structures and complex KYC information accompanying the evolving landscape of financial technologies. Flexibility, speed, and configurability are our core strengths, setting us apart in the market,” concludes Tamkivi.
Salv’s real-time platform for fighting financial crime enables productive collaboration and improves the exchange of information.By Marria Qibtia Sikandar Nagra Taavi Tamkivi, Founder and CEO of Salv
When DECTA’s CTO, Aivars Belis, decided to develop a full-scale Digital Banking Platform, 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.
“We set out to create a holistic solution for our end customers, determined to steer clear of vendor lock-in,” says Belis. “Our platform allows clients to seamlessly integrate their own frontends through our API, expand the solution’s back-end with their services, or harness the benefits of our pre-built front-end.”
And all of it is white-labelled.
Just one of the core elements the platform simplifies is customer onboarding, including KYC and AML checks. “AML and KYC are some of the heaviest and most expensive aspects of building a financial product,” says Belis, whose experience in financial services spans over 25 years, both in the customer and vendor side. “Our objective was to minimise the onboarding process to a maximum of 30 minutes for legal entities
and even less for private customers, wherever feasible.” All onboarding is done completely online without any need to visit a physical branch.
In certain jurisdictions, 30-minute KYC might not occur until there are regulatory changes. However, DECTA’s platform makes it technologically possible.
Upon successfully completing the onboarding process, the end customer gains immediate access to the platform’s comprehensive banking services.
This includes opening accounts and payment cards, transferring money, and managing e-commerce and point-ofsale businesses using DECTA’s mobile and web applications..
Companies don’t need to enable all of it, but they’re all available.
“With our platform, you could real-
istically enter the competitive arena alongside established players like Revolut, Starling, or Monzo as soon as tomorrow,” says Belis.
He tells NFM that it usually takes up to three hours to introduce the platform at demos. A short article describing it barely scratches the surface.
The solution includes built-in customer service through chat, and allows companies to plug in their own AI-powered chatbots if desired.
Possibly the only real solution for incumbents to go digital fast enough After 15 years of beating the drum for digital, many incumbents still lag behind while things get easier for fintechs whose fundamental structures were built in a new age.
Creating a new system from scratch also isn’t feasible.
In a race where the odds are already stacked against them, a solution like DECTA’s Digital Banking Platform might be the only realistic chance incumbents have of catching up to the fintechs already far ahead in the game.
“It’s more challenging to implement
these solutions with legacy systems because there’s no one-size-fits-all option for them,” Belis says. “What many incumbents are doing now is creating sub-entities with their own assets and P&L sheets. In these greenfield situations, we’re a lot freer to navigate and be agile.”
But DECTA is fully prepared internally to serve in both greenfield and brownfield scenarios, and has the resources to scale its offering for projects of any size, legacy or not.
DECTA handles the “tech” part of fintech DECTA’s extensive and specialist expertise as a SaaS vendor in the financial services niche gives the company an edge, allowing it to create solutions that are typically more polished than those created by newer companies in-house. The digital banking platform solution’s strengths include scalability, availability, and security, all of it provided under the umbrella of guaranteed SLAs, with a 24/7 team that monitors and maintains it.
By letting DECTA focus on the “tech,” fintechs are freer to innovate on the “fin” side.
You could realistically enter the competitive arena alongside established players like Revolut, Starling, or Monzo as soon as tomorrow.Aivars Belis, CTO of DECTA
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 DelgadoPoland’s 30-year-old banking sector has an unexpected advantage over more mature markets. It was born in the 1990s and therefore is unhindered by the legacy infrastructure that impedes more traditional institutions on their journey to becoming truly agile.
Alior Bank was formed during the crucible of the 2008 financial crisis. Its innovation-first attitude not only allowed the startup to survive the crisis, but it eventually became one of the Warsaw Stock Exchange’s 20 largest companies. Today, Alior Bank is one of the largest banks in Poland. It has 4 million customers, and 1 million of them use its mobile app.
PZU SA, Poland’s largest insurer, bought a large stake in the bank in 2015, enabling Alior to expand its innovative efforts even further.
By the time Open Banking came around, Polish purchasers were already long-accustomed to quick payments
Kamila Wincenciak Head of Innovation and
Bank
using a locally developed system called BLIK, a joint venture from six of the country’s banks to allow customers to pay with a mobile phone using a unique numeric code.
Payment services such as Google Pay and Apple Pay were old news in Poland before they even hit the market.
In fact, Polish buyers dislike paying by credit card because it takes too long to type in credit card details. BLIK is faster and easier.
The Polish BLIK system became so popular that Mastercard ultimately became a shareholder, describing it as a “best-in-class experience” for consumers in contactless payments.
Innovation first: Alior’s blockchain-based “durable medium,” an AI voicebot, deferred payments and more
In the advanced Polish ecosystem, Alior Bank has no other choice but to innovate if it wants to remain relevant. As such, the bank has unleashed a volley of innovations in the last few years.
For example, in response to the EU’s requirement to store terms, tariffs, and pricing tables on a “durable medium” such as paper, Alior unveiled a document authentication feature built on top of the public Ethereum blockchain.
In 2021, it launched an AI voice assistant with the name InfoNina which is a custom-
er’s first point of contact when they call the bank. If InfoNina can’t help them, the bot sends the customer to a human rep.
But InfoNina is far more than a call operator. It also proactively calls customers if any of their information on record isn’t accurate or needs updating.
To make daily life easier for customers, Alior also implemented a bill consolidation service called BillTech into their mobile app so that customers can pay all their bills easily.
It was also one of only two banks in Poland to implement a deferred payments solution for its customers.
The innovation lab that makes it all possible Alior’s innovation lab is where all the magic happens. “Compared to other labs on the market, our lab is quite large and spans a wide scope of competencies including UX design, customer research, open banking, fintech scouting or remote processes development,” says Kamila Wincenciak, Head of Innovation and Fintech Partnership at Alior Bank.
Her department alone has nearly 50 people in. This year, Global Finance Magazine awarded Alior Lab—for the second time—as being one of 25 best financial innovation labs in the world.
The lab is divided up into five teams, one of which focuses solely on fintech
partnerships.
“We don’t have a fixed system on how we prefer to innovate,” says Wincenciak. “Our fintech partnerships team will always scout for anything already existing in the market, but we’re also comfortable developing something completely in-house because of our team’s advanced competencies. We choose the route that makes the most sense for each innovation.”
Alior has already worked with several Nordic fintechs and has interests in further exploring the zone’s potential.
Fintech Partnership, AliorThe 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
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.
By Marria Qibtia Sikandar NagraIn the highly competitive financial services industry, it requires more than a stroke of luck for a relatively new digital banking company to establish itself and secure significant projects. Tuum’s selection as the core infrastructure provider for all of LHV UK’s financial operations involving 200 client companies and 10 million end customers globally is a testament to its ability to offer seamless, tailored financial services.
“What sets Tuum apart is its rich functionality beyond traditional core banking, offering a payment engine with transactional capabilities and a card management system right from the start. This versatility allows Tuum to serve a wide market segment, not only fuelling retail and greenfield projects but also suc-
Edgardo Torres Caballero Chief Revenue Officer, Tuumcessfully migrating legacy systems in banking institutions, banking as service providers, and Fintech companies,” reveals Edgardo Torres Caballero, Chief Revenue Officer at Tuum.
One of Tuum’s key advantages is the utilization of a single source code. This approach allows for continuous updates and releases encompassing the entire
client base. “By consistently updating the core on a single source code basis, Tuum ensures that functional requirements are consistently met, addressing the frustrations often experienced by clients using the legacy systems,” shares Caballero.
Tuum’s platform is designed with modernity in mind and is API-first, allowing for seamless integration with
various components and 3rd party offerings that form an extensive ecosystem. “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.
Tuum’s focus revolves around core banking, lending, payments, and card management, with these modules consistently updated to meet client requirements in the declared market segments, including 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 base, ensuring backward compatibility and smooth migration processes. “Tuum takes pride in the scalability of its platform, allowing it to handle increasing demands seamlessly. With a configuration-first approach, Tuum prioritizes setting up necessary configurations before the migration process begins. This proactive method minimizes the chances of any complications arising during the migration phase,” shares Caballero.
Cultural alignment between your organization and the chosen partner must be strong to implement core banking systems successfully. Since projects often have ups and downs, culture plays a significant role in deployment. “At Tuum, we take pride in our culture, treating our clients as part of our family. We believe that their success is our success, and we prioritize their satisfaction. You can think of it as our end goal to form sustainable relationships through effectual delivery of our services so that our clients can focus on innovating and creating value for their customers, “ concludes Caballero.
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 MalmgreenFintech companies aren’t competing with nor carrying the same risks as banks. They’re mostly competing with other Fintech companies abroad. Therefore, it’s not reasonable that they are subjected to the strictest regulation in any sector and parts of the world as the well-established banks. Regulation and legislative framework should be nuanced so that a start-up in the Fintech environment doesn’t have to struggle with the heavy legal burden and special taxation like the payroll taxes from day one as Fintech companies abroad are not. “ says Steen Lund Olsen,
Deputy Chairman of Finansforbundet.In other words, he believes that despite the government designating the Fintech environment as a Danish strength, the need for further improving the conditions for Danish Fintech start-ups is urgent. One way to address this, in his view, would be to increase competitiveness. He thinks that being a start-up in Denmark is too complicated, and he would like to see more lenient political winds blowing over the Danish Fintech environment. He suggests, for
example, sandbox environments as a way for budding companies to experiment and practice while testing their solutions and growing their business.
The need for an ambitious national strategy
“In the middle of August, the Minister for Industry, Business and Financial Affairs, Morten Bødskov, visited Copenhagen Fintech, where we discussed that Denmark is much more than wind, pigs, and insulin. If we’re going to be able to create strong, large, well-operated companies within Fintech, and if the political standpoint is indeed that we’re good at it, then I honestly think there could be more action behind the words, when it comes to support the companies as they grow”
Steen Lund Olsen continues.
Although Denmark has several success stories in the Fintech environment, such as Pleo and Lunar, he looks somewhat enviously at what’s happening beyond the country’s borders in terms of growth companies. Moreover, if a start-up does succeed in bringing a solution to market, the challenge is also to find the right skills for continued operation and development. Therefore,
Steen Lund Olsen also calls for a more targeted effort and higher ambitions into improving the possibility of recruiting international talents and higher ambitions when it comes to a national strategy for competence development, both in terms of retaining Danish talent and attracting foreign talent.
Made with ethics: A Danish competitive advantage
“Danish fintech and finance is already known for high ethics and responsibility. It’s a brand we can use to market ourselves in an international setting, and Danish standards in the field are world class and a strong competitive advantage, that we need to utilize. “Made in Denmark” could become synonymous with Danish digital solutions that are “Made with Ethics”, but it takes a serious commitment from all sides to really create and benefit from this rather unique position. So, there’s a significant task in developing and strengthening the Danish Fintech environment in a way that gives companies the best possible conditions to grow strong in Denmark, backing them sufficiently to participate in global competition, export their solutions and
Steen Lund Olsen Deputy Chairman of Finansforbundet
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
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.
retain 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 public-private collaborations.
the financial sector
When Fintech began to emerge as a serious concept, some viewed the
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.
innovative start-ups as a threat to the established financial sector. However, that hasn’t proven to be the case. On the contrary, these companies are strengthening the financial sector
and increasing competitiveness. They also offer the opportunity to provide customers - consumers - with new, personalized services. The significant revelation in this context is a new inter-
The initiatives are, of course, intended 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 initial collective framework agreement between Finansforbundet and the Employers’ 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 subjected to the same requirements, and that can be particularly challenging for small companies that operate digitally on a global market to meet,” Steen Lund Olsen concludes.
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.comSo, while consumers are increasingly taking advantage of the perks of online shopping, we’re seeing a disproportionate rise in false declines—This surge means businesses are losing out on a golden opportunity to boost their revenue. Even one false decline can now lead customers to abandon a site, which results in a significant loss of loyalty and revenue. This impact isn’t exclusive to any one player—it’s felt across the board, from small retailers to large enterprises. Progressive CFOs are seeing the benefit of turning to payments as a strategic tool, particularly in today’s challenging economic climate. By optimizing their payments these businesses are not just navigating tough times, they are gaining a competitive advantage.
The false declines epidemic and the rise of the savvy consumer False declines— where legitimate payment methods are mistakenly rejected—are emerging as a serious issue for
ecommerce businesses. Our research reveals a concerning trend—45% of consumers will not retry after one false decline, choosing to transfer their business to a competitor. Consequently, businesses lose out on legitimate customers after having done the hard yards of customer acquisition—the cost of which has risen by over 220% in the last decade. The amount of money being lost to competitors following a single false decline has grown by 300% in the US compared to three years ago, putting $35 billion directly into the pockets of competitor websites or apps from the total $50.7 billion lost to false declines.
Rami Josef, Product Director for Payment Performance and Authentication at Checkout.com, suggests that the very pace and magnitude of online commerce and payments expansion have led to a complexity in payments.
This complexity is intensified by elements such as a surge in cross-border shopping and new, divergent rules from schemes and issuers. The more complexity there
is, the more chances higher the likelihood of encountering payment failures leading to false declines.
But, there is an opportunity to reduce this complexity. With the right technology and increased transparency into the payments processes, businesses can identify and rectify the issues leading to false declines, thereby optimizing their revenue. To achieve this, businesses need the ability to fine-tune each step of the process and the agility to adapt to changes as complexity continues to evolve.
High-performance payments are the CFO’s competitive incentive Complexity in the ecosystem is inevitable, but sub-optimal payments needn’t be.
Our research indicates that an increasing number of CFOs and their teams recognize the strategic potential of payments and their influence on revenue growth. They’re eager to enhance their payments performance, not merely to recover losses, but also to grasp
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 profitability. These businesses are the ones that know there is latent opportunity in their payments and other businesses will be wise to emulate.
However, seizing this opportunity requires a shift in mindset. Payments, traditionally seen as a mere cost-center, can be transformed into a revenue and value driver with the correct approach. To achieve this, every stage of the payments process needs to be optimized. For example, appropriate APMs, access to local acquiring banks, and a dynamic response to SCA and Network Token requirements can all result in lower costs, lower fraud, fewer false declines, and happier customers.
And, when these optimizations have been successfully carried out, each transaction will yield more return, cumulatively leading to a substantial boost in revenue.. Payment performance should align with business strategy to prevent the unnecessary revenue leak and to win back business from competitors.
The objective, therefore, is to close the strategy-performance gap in payments.
This requires understanding the scale of the revenue opportunity linked to optimized acceptance rates, being aware of how much is lost to rivals with superior acceptance rates, and monitoring these metrics over time.
The potential for businesses to transform their payments performance and significantly boost their performance is considerable. As the digital payments landscape evolves, those who recognize the strategic potential of payments will be in a prime position to seize these opportunities and gain a competitive advantage.
Among CFOs, 60% count upcoming payments regulation as a primary concern, 68% are apprehensive about improving their payments acceptance rates, and 51% are worried about how adverse macroeconomic trends might affect their operations. Interestingly 67% of Heads of Payments have board-level backing for the strategic importance of payments.
With this in mind, the strategic potential of payments can’t be overlooked in today’s highly competitive market with razor-thin margins.
The data, sourced from surveys of over 1,500 medium to large enterprise
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 into how false declines might be impacting your profit margins, speak to the team and get your copy of the full report at Nordic Fintech Week from Checkout.com’s booth.
