Nordic fintech hubs’ perspective: A unified north is the future of financial technology

Wednesday key stakeholders of the Danish fintech ecosystem was gathered under Pier47’s roof to hear the latest news from each of the Nordic ecosystems. Representatives from Swedish, Danish, Norwegian and Finnish fintech hubs offered insights from their local ecosystems as the spectators downed the morning coffee and the classic conference croissant.

The first to take the word was Neil Murray from The Nordic Web. Murray has been gathering investment data from the Nordics over the last number of years.

“If you asked me five years ago whether the Nordics had a future as a fintech powerhouse, my answer would have been lacklustre. However, that has changed, and fintech has become a prominent part of the Nordic tech scene now. In the last year, it was the vertical that attracted the most investments across the Nordics.” Murray says.

Stockholm, Copenhagen and Stockholm are  among the European top 10 fintech cities according to a recent report from Deloitte. However, the change has not been chance. Instead, it is the result of a collaborative cluster effort.

“The fintech hubs have played an integral part in this development. If you, for instance, look at what Copenhagen Fintech has done for Copenhagen’s status as an actual fintech hub – it has been amazing. The hubs play an important part in the development,” Murray finished.

Next up representatives from each country took turns giving input on what is happening right now and what needs to happen next to continue the growth that the nations have seen.

Sweden: The trend is fintech scaleups

Sweden is well known not only in the Nordics but also for the world as a fintech powerhouse. The region has fostered international successes such as Klarna and iZettle. The scaleups were also Louise Grabo’s jumping off point when the General Secretary from the Swedish Fintech Association gave her input on the state of Swedish fintech scene.

“The trend in Sweden is that we have big fintech scaleups. They accounted for more than 40 per cent of investments last year,” Grabo highlighted. Her organisation represent more than 50 Swedish fintechs.

The general secretary furthermore highlighted how stakeholders and potential investors outside of the Nordics had shown much interest in the Swedish ecosystem. Moreover, then stroke a theme that would turn out to be recurrent throughout the day. The need for regulations to become more uniform across the Nordics.

“Even in Sweden, most politicians don’t know much about fintech. We have an educational effort in that area. At the same time, we need European politicians to show more interest in how regulations challenge financial innovation. Making the regulatory landscape more like-minded across the Nordics could serve as a good jumping off point for that effort,” Says Grabo.

Norway: A fragmented ecosystem that is coming together

Traditionally, Norway has been an oil economy. However, as fossil fuels decline in popularity so does the prices. The Norwegians have sought to widen the scope of their financial efforts as a result. New fintech hubs have sprung up in both Bergen and Oslo. Hans-Christian Bjørne co-founded the later and is a program director at the accelerator, The Factory.

“In Norway, the fintech scene is still in its infancy. As we have seen in Oslo, Bergen and Trondheim with the fintech hubs, it has started to flourish in later years. It is still somewhat fragmented, but that is changing now. We need also need to improve the FSA’s regulatory speed. Also, the government is working to create a regulatory sandbox to that end,” says Bjørne.

The program director then coined a new term: Finpact, when fintechs do impact work. He saw the area as a potential stronghold for Norwegian fintech and mentioned how some startups are using new technologies such as blockchainBlockchain er en decentraliseret digital teknologi, der bruges til at gemme data i et netværk af computere på en sikker og uforanderlig måde. Blockchain sikr... More to empower refugees and empower the sizeable unbanked majority in the world. Finally, he employed the Nordics to come together as a unified brand for the benefit of each of the countries.

Denmark: Turning engagement into real partnerships

The fintech ecosystem in Denmark recently saw Tradeshift become the first fintech unicornUnicorn er et udtryk, der bruges til at beskrive en startup-virksomhed, der har nået en værdiansættelse på 1 milliard dollars eller mere. More to come out of Denmark. However, that is not the end goal. Simon Schou is the co-founder of Copenhagen Fintech, an interest organisation that has managed to more or less create a unified entrance node for outsiders when they want to address the Danish ecosystem.

“With Copenhagen Fintech we have achieved an unusual feat for a cluster organisation: to create strong connections with startups. When foreign startups, investors and corporates engage with us they do so because they are looking for an entrance into the ecosystem,” Schou highlighted and continued:

“The major challenge for us right now is that we have accomplished to create much noise and we have accomplished to gain the interest from all major stakeholders in Denmark. The challenge then is to turn that engagement into real partnerships or value.”

The co-founder then struck a crucial topic that received attention from most speakers. How to create a unified Nordic fintech brand: “The Nordic brand is the one we should use. It gives off a halo effect of quality and trust. However, there is still much work to do in this area.”

Finland: Fintech could benefit from other verticals success

One word comes to mind when thinking of tech and Finland. Gaming. However, rather than seeing Rovio and Supercell as impeding to the fintech vertical Nina Rudanko from the newly formed Fintech Finland Association believes that there are synergies to be had between the verticals.

“Finland is well known for our gaming industry. However, we can leverage that fact in a branding effort to highlight the creativity of the fintech ecosystem as well. We still lack a large scaleup as we have seen in Denmark and Sweden,” Rudanko said and explained what could help Finland next:

“One of the first efforts that we have pursued is to engage in talks with high-level politicians to better the relationship and understanding between regulators and financial authority. Furthermore, I believe that working towards creating a unified regulatory framework across the Nordics could prove a huge upside for startups in all of the countries.”

Janne Salminen from the privately run Helsinki Fintech Farm furthermore highlighted the strength in being a small market: “There is easy access to other stakeholders. However, we need more investments and political support. The regulators are interested in fintech, and they are increasingly showing interest in more collaboration,” Salminen remarked.