Always big on entrepreneurial spirit, Northern European countries are the clear frontrunners of the continent’s digital banking scene. Just last year, Iceland, Norway and Denmark were pronounced the top three European markets in terms of online banking penetration, while Finland and Sweden ranked 5th and 6th, respectively, for the uptake of digital banking.

To crunch some more numbers, there were about 23.8 million online banking customers in Northern Europe in 2018, including nearly 8.5 million in Sweden, almost 5.2 million in Denmark and approximately 4.9 million in Norway and Finland each. Almost everyone with a computer has ditched actual physical banking, it seems. On average, 93.5% of all internet users in these countries use online banking, according to data from Eurostat.

Nordic countries have clearly taken the digital challenge seriously – and are slowly beating everyone to it, ranking above the EU average both in terms of digital skills and infrastructure. They’re busy paving the way for a cashless society thanks to the widespread use of local payment platforms like MobilePay in Denmark, Vipps in Norway and Swish in Sweden. So much so that Deloitte predicts that at least one of them will be practically cashless by 2025.

Boosting digital customer base

Incumbents in the region have got the memo, too. They’re making strides in digital transformation and invest heavily in the expansion of their digital services and boosting their digital customer base. Helsinki-based Nordea, the region’s largest bank with nearly 10 million customers, for one, spent more than €200 million on digital solutions between 2016 and 18 and increased the volume of online consumer loan applications by 266% in slightly more than a year.

Have Nordic banks found the antidote against digital disruption? Not quite. The portion of their revenues that is expected to be at risk from challengers in the next five years rose by an estimated 12 percentage points to 38% in 2018. That’s 7% higher than among other European banks. At the same time, about 84% of Nordic bankers viewed fintech partnerships as an important means of achieving bank goals in 2018, up from 74% the year before, and 11% higher than banks across the rest of Europe.

Small wonder that total investments in Nordic fintech companies rose by a historic record of $645.5 million in 2017, racked up by a handful of mega-transactions, including a £225-million private equity investment in Swedish payments firm Klarna. This enthusiasm slowed down until the end of 2018’s third quarter, but the total funding rounds under $20 million were still expected to reach the previous year’s total. So, no bursting bubble here: continued growth of capital from smaller deals is “a testament to the strength of the fintech ecosystem in the Nordics”.

Key fintech hubs

Stockholm, Oslo and Copenhagen have all become key European fintech hubs. Stockholm attracts about one fifth of all investment in Europe and has given birth to an entire league of high-profile fintechs, such as Klarna and iZettle. Oslo is strong in security, e-ID and authentication solutions but a growing number of players in robo-investments, savings and neo-bank platforms are also emerging in the city. Copenhagen attracts fintech companies in part because of its outstanding innovation culture as well as its proximity to expertise and customers.

But even in the north, it’s not all rainbows and butterflies for fintechs. Despite Nordic countries’ bustling ecosystem, supervision of financial services is still fragmented and managed at a local level, with little direct coordination between the region’s regulatory authorities. Key difficulties cited by local experts also include achieving scale and reach, as well as sharpening competition from other fintechs and established players. No need to worry though. Open APIs, data analytics, automation, AI, blockchain and fraud management are only a few of the technologies Nordic fintechs are heavily looking into to get ahead of competition and sail into untapped markets and potential.

At this year’s Copenhagen Fintech Week, on 19 June W.UP will organise the Beyond Banking session, hosted by our Head of Alliances, Remco Veenenberg. Here you can learn why more and more banks are teaming up with fintechs and how this new-found symbiosis can be a win-win for everyone.



Tune in to our free on-demand webinar with global loyalty and benefits company Collinson and W.UP to learn how artificial intelligence and machine learning is transforming financial services and how banks can create smart interactions with customers.

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