From briefly looking at fintech in Africa to now my turning my attention to the fintech scene in Scandinavia.
The scene is really hotting up and who would have thought the concepts of finance and tech could result in something quite exciting? (As Susanne Chishti and Janos Barberis mention in The Fintech Book) London has been at the centre of fintech with an array of world class start-ups as well as being the finance capital of Europe.
While the media has been focused on the London scene, Scandinavia has continued to increase its fintech presence as the region plans to go cashless, in addition, digital banking and electronic payments have become commonplace.
Bills and coins represent only 2 per cent of Sweden’s currency, and Denmark has a goal to “eradicate cash” by 2030. (Bobs Guide, March 2016) Michael Kent, the CEO of Azimo, an international money transferring site recently mentioned in Bobs Guide : “Sweden and Denmark are two of the most vibrant and cosmopolitan countries in Europe, where digital payment innovation is ahead of the global curve.”
Between January 1, 2014 and end of March 2016, 51 fintech investments were made all over Scandinavia totalling $390.17 million. This number maybe small compared to the $5.4 billion that has been made by fintech firms in London, however, nearly one in 10 investments in Scandinavia is now made in the fintech sector.
According to data from The Nordic Web, Sweden is flying the fintech flag in the region by having 32 out of 51 fintech investments, and Stockholm has had a robust financial industry and history. Companies such as iZettle have really helped Nordic fintech gain interest from all over the world.
Klarna, another fintech company from the Swedish capital and one of the most prominent in Europe is championing this disruptive form of technology by allowing users to buy without the use of cards and is valued at over $2.25 billion and has raised $291.33 million in 6 rounds from 12 investors. iZettle also has a high valuation, and is currently valued at $244.04 million. Despite the hype of the London fintech scene, both of these companies clearly show how powerful the Nordic fintech scene has developed.
Nordic Fintech – A Cashless Society
Image source : The Memo
It has been well documented that Scandinavians avoid cash and using tangible currency is decreasing. In Sweden, there’s less than 80 billion Swedish crowns in circulation (about €8 billion) and according to Niklas Ardvidsson of Stockholm’s KTH Royal Institute of Technology only 40 to 60 percent is actually still in regular circulation. The decline in physical cash clearly shows that Swedes prefer apps and credit cards when it comes to making a payment.
The rise in mobile usage and banking apps such as Swish, which was collaborated by Swedish and Danish banks respectively, allows users to transfer money via their bank account to anyone else with a bank account, no matter where they are.
Nordic countries are known for having a high sense of trust, this linked with a forward thinking approach and embracing new technology has made using these apps even more desirable to use.
An Alternative Way Of Thinking
It can be said that the Scandinavian management style has contributed to the Nordic fintech scene and has helped shape the region as a major player in Europe. A bottom-up structure that focuses on “all for one and one for all” attitude gives a completely different dynamic that you wouldn’t find anywhere else.
Another factor that is particularly interesting is that in Scandinavia is rather than seeing successful firms as competition, they look up to them as real-life role models.
Their culture and management styles has without a doubt helped push these array of innovative fintech products/services to the next level. The Nordic fintech scene maybe behind with what has been achieved in London, however, fintech start-ups from around the globe can learn a lot from the likes of iZettle and Klarna. They have helped shape Scandinavia as an educative fintech hub and a place that inspires others who want to live in a virtually cash-free society.