Can the Nordics sustain as the second largest Fintech Ecosystem in Europe?

The Nordics have always been innovation driven economies, probably better than most other regions in the world. The Global Innovation Index 2017 published by INSEAD ranks Sweden at number two in the world, and the rest of the Nordics within the top 13.

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Most of these economies have had the right ingredients to sustain their positions at the top of the innovation ranks. The R&D to GDP ratio for the region is the highest in the world, with Sweden. Finland and Denmark ranking 4, 5 and 6 in the world (as per World bank data). Non-Fintech firms included, Sweden is the second largest Unicorn-breeding ground in the world.

Where these economies have historically been found lacking is the scale. And often firms that conquer the local market haven’t been able to replicate the success in other parts of the world.

With Fintech, the Nordics have always been at the forefront with Stockholm providing the ammunition. While they have consistently managed to beat the UK at the innovation rankings, UK has led the way in Europe for Fintech, thanks to its Financial Services ecosystem.

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Some of the big names and big events in the region have been in Stockholm, Oslo and Copenhagen. KPMG set up a fintech innovation platform in Sweden. The Stockholm Fintech Hub launched earlier this year and is independent and not-for-profit.

Norway’s biggest bank, DNB  recently joined forces with a local incubator, StartupLabs, to launch the “DNB NXT Accelerator”, which incentivizes entrepreneurs to come up with solutions that the bank can use.

Copenhagen is a Fintech hotspot with its annual Money 20/20 conference, which gathers the world’s leading investors and entrepreneurs. It also has the “First Fintech Hub in the Nordics” that acts as a co-working space and is a partnership between the Financial Services Union Denmark, the City of Copenhagen and the Danish Bankers Association.

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With the ecosystem play heating up, the usual suspects of Fintech in the region namely Klarna, iZettle, Meniga etc., have seen major traction in 2017. Klarna recently reported impressive revenue growth, and announced a plunge into digital banking. They also closed major deals with VISA and Stripe with a plan to expand aggressively in the US.

iZettle, that provides a simple payment solution to small businesses is currently growing at about 1000 B2B clients per day. Apart from their presence in the Nordics, they have been quite successful in expanding into the UK, and have recently appointed a bank for their IPO (expected next year).

Meniga from Iceland is a PFM Ecosystem that makes digital banking amazing and transforms raw transactional data into valuable data. They serve over 40 Million customers across 18 countries in 4 continents. They recently raised €21 million to accelerate global expansion.

Similar stories from Trustly with €3.2 Billion in transactions last year and Tink securing $10 Million in funding last year for expansion, mean Nordic Fintechs are on a roll.

They (Nordic firms) have historically been great at pioneering technology and innovation. This time with Fintech, they have been able to create a local ecosystem, already have a handful of fiery fairy tales to inspire, and more importantly have demonstrated global expansion and execution capabilities.


Arunkumar Krishnakumar is a Fintech thought leader and an investor. 

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