5 Fintech Predictions for 2017

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A VERY late Happy New Year to you all! For anyone that does read these blog posts, 2016 for me was all about fintech. This year will be no different, here’s a brief look at what many commentators have predicted – with 5 fintech predictions for 2017.

5 Fintech Predictions for 2017

Artificial Intelligence

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Many in the media have dubbed 2017 as the year of AI, this will be the year that an array of industries will ask how the latest old trend in computing threatens and disrupts. Expect a more intelligent type of fintech, which will cater to the consumer’s every need and deliver a  more of a robust money management experience.

Invoicing

Fintech invoicing

This year one of the biggest things we’re going to see in fintech is the automation of the invoicing management process. We can expect innovative invoicing and as a result, payments will be in real-time and become easier, which will therefore narrow the gap between credit and recovery.

 

Brexit

Fintech Brexit

When article 50 is triggered here in the UK, the two-year journey to exit the European Union will begin and so will the exodus of fintech firms from the UK if the country chooses to end the EU licence pass-porting as well. We could see a big move out for fintech firms from the UK and relocate to other european countries such as Ireland and Germany.

Blockchain

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Blockchain technology will continue to make the headlines in 2017. If you’re new to blockchain, it basically consists of a long chain of data blocks in which one or more transactions are being compiled, encrypted and securely stored without being hacked. Ideas and concepts on where blockchain technology might be used in the future, are only just beginning. There has been a lot of talk about smart contracts. Instead of using a solicitor for example, a computer takes charge of the contracts. Blockchain technology software would proof all preconditions in live mode and can read individual agreements automatically.

Pushing towards a cashless society

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Amazon recently unveiled plans to bring a chain of cashier-free stores to the UK next year. By using technology to track which items have been selected, you’ll no longer have to queue or use those annoying self-service checkouts. Customers will be able to pay via their smartphone as they leave the store. The introduction of these next gen stores will push us towards a cashless society in 2017.

Fintech Predictions for 2017 – What are your thoughts?

What other predictions would you add to the list? Where do you see fintech developing in 2017? I’ve recently set up a Facebook page called Global Fintech News, feel free to share your thoughts and predictions, you can also tweet me. Stay tuned for my next fintech blog post.

*Featured image : In Business.ae

What Is Insurtech?

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What Is Insurtech? A Brief Insight

As you’ve noticed this year I have been fascinated with the world of fintech from looking at many countries and regions around the world and looking at how an array of startups are shaping financial technology. Today, I provide a brief insight into insurtech, a buzzword that you might have heard a lot of this year.

So what is insurtech? The term which fits under the fintech umbrella, relates to the current changes in the insurance industry which has seen both the adoption and evolution of digital technology.

In addition, there are six components to insurtech : p2p insurance, e-commerce insurance, brokerage, health insurance, usage driven insurance. Firms that operate in these respectable insurance areas have one common goal in mind – to focus on the consumer and digitalisation. For example, using the likes of artificial intelligence in the insurance industry, builds up a deep understanding of a client’s needs and helps to understand what additional offers and services they may require.

Since 2013, the insurance sector has seen an ever-growing demand for creativity, new digital technology, and disruption. (Tech Bullion, November 2016) Companies such as AXA have become of the first to become a digital insurer. The French multinational established a lab in Silicon Valley and affiliated themselves with social media giant Facebook back in 2014. Many commentators during this time were expecting big things from the likes of Amazon, Apple, Google, etc.

However, a year later, Google launched a new tool to sell car insurance to U.S. web searchers. Things didn’t go swimmingly, within a year  the search engine giant had shut down its insurance business. Adam Lyons, the founder of TheZebra.com (a comparison site) mentioned in an Insurance Business article that : “Auto insurance is a complex product and a lot of folks underestimate that.”

He also mentioned that the search engine titan focused primarily on price, although this works very well with some products, you need to ultimately have a deeper understanding and be more involved. Lyons stressed that insurance is proving to be one of those industries.

Insurtech and IoT

Insurtech IoT

If a company like Google has failed at insurtech, how does this form of fintech evolve and prosper? It seems that by combing other forms of disruptive tech such as the Internet of Things (IoT) is one method that will change the industry. The beauty of using IoT is the data that it generates. The future of smart homes and self-driving cars means that a lot of insurtech companies will partner with an array of device manufacturers.

For example, insurance companies have partnered with device manufacturers like Water Hero, which monitors and displays water flow in real time. It’s easy to see the appeal in this partnership given that one-third of all household claims in The States are related to water leaks.

As well as using IoT, big data and algorithms are also imperative for the industry. It’s vital that they leverage IoT tech to gather more data about customers’ homes, cars, and even the consumers themselves, insurance companies can therefore utilise real-time data, predictive modelling, and machine learning to create new business models as well as developing new products/offers for their customers.

Insurtech 2017 Predictions

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This year has seen a lot of insurtech investment. Research from CB Insights indicates that venture capital firms made 126 investments in insurance globally in the first nine months of 2016, with a total value of $1.4bn (£1.1m), compared with 118 for the whole of 2015 and 26 in 2011.

As with most things in the tech world, it’s a rapidly changing landscape, as a majority of analysts have already pointed out, next year will have a lot regulations set in stone plus political changes.

One prediction for insurtech in 2017 is that there will be more new entrants to the broker software market. One commentator recently mentioned that tech companies and startups such as Applied Systems, Transactor, Vlocity and Insly are entering the market and looking to displace the incumbents.

In addition, in 2017 it is predicted that insurers will embrace a startup feel as they learn and embrace startup methods. The likes of AXA (as previously mentioned) have made some great results from partnerships. This is something that’s going to be on top of insurance firms’ agendas in the new year.

The final prediction that has been mentioned by many is that the broker proposition will evolve. Traditionally, in the world of commercial insurance, it has been the Holy Grail for brokers to become clients’ strategic risk advisors. In 2017,insurtech will aid brokers by giving efficient solutions to deepen client relationships.

It’s fair to say insurtech has made insurance sexy – something we thought we would never hear! An industry that has been static for some time now, thanks to using innovative tech such as IoT, AI, and using APIs things are finally moving forward. 2017 looks to be a very interesting and exciting year for insurtech with numerous players and the amounts of investment expected to surpass those of fintech very soon.

*Feature image : Fintech Switzerland

Chinese P2P Lending – The Red Dragon Gets Fiery with the Industry

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Continuing with my fintech posts once again, I return to Asia and look at Chinese P2P Lending.

Chinese P2P Lending – A brief insight

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China’s peer-to-peer lending sector has emerged as the largest and most dynamic online alternative finance sector in the world. (ACCA, October 2015)

The P2P lending industry has increased since 2011, with 2,600 platforms by the end of 2015, but has experienced stops and starts due to issues in controlling risk. Over the past year around 1,000 businesses have closed. Risk has been a major talking point, especially with credit risk – a few commentators have mentioned that data mining could provide a way to identify better borrowers, but this ultimately depends on availability and dimensions of data.

In addition, many have stressed that standards need to be put in place in the industry such as being more transparent, the requirement of loan loss provisions, as well as having safety requirements that are put in place to modernise and regulate the industry.

Chinese P2P Lending – Ezubao Scandal

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It’s no surprise that many have commented on the industry and how measures need to be put in place after the Ezubao scandal. At the start of the year, it was announced on Chinese state media that the company cheated over 900,000 investors out of US$7.6 billion.

According to a few sources, 95 percent of investment projects on Ezubao’s site were fake.

The downfall of Ezubao definitely tarnished the industry’s reputation in China, however, the government are clamping down on companies that don’t play by the rules.

They have banned P2P platforms from securitising assets or offering debt transfer mechanisms that mimic securitisation. Companies are prohibited from using P2P platforms to finance their own projects according to The FT.

These regulations mark the first comprehensive framework for regulating the P2P industry in China.

Xu Hongwei, chief executive of Online Lending House told the FT : “In the past when there basically were no limits, and lots of people operated in the grey area. It won’t be like that any more. Now that we have standards, you just follow the standards. The whole industry will become more normalised.”

The Chinese government has a made a push on alternative finance to help people who struggle to access loans from banks (who are known to lend to large corporates or those with hard assets to pledge as collateral).

There are still over a 1,000 what has been dubbed as “problem platforms” in China and these equal to nearly half of all platforms.

Other rules that have been in place that standout include restricting P2P groups from operating “fund pools” in which investor funds are not matched with specific loan assets.

Also, a cap on the amount consumers and businesses can borrow has been put in place. For consumers the cap stands at 200,000 yuan on one platform a 1 million yuan over multiple platforms. For businesses the cap is 1 million yuan on a single platform and 5 million yuan over multiple lenders. (Crowdfund Insider, August, 2016)

Moreover, P2P companies will not be allowed to operate “offline”. Platforms must abide to transparency regulations such as lending statistics and the rate of defaults.  In addition, a blacklist will be put together to block bad actors from fraudulent activities.

Before these P2P rules came into play (and the Ezubao scandal), people didn’t really judge on which platform is good or bad, however, now they have a clearer idea on what’s going on. As a result, investors have become more vigilant on platforms that are breaking the rules.

*Ezubao Image : Fortune

Manchester Fintech : An Alternative To The London Scene

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Manchester Fintech – Unlocking The Northern Powerhouse’s Potential

 

Continuing once again with my fintech series, this time I head to the north west of England and look at the Manchester fintech scene.

Anyone that follows the goings-on in fintech knows when it comes to UK fintech, London is the dominant city. According to Startups.co.uk Only 31 of the top 100 start-ups listed (In May of this year) were based outside of the capital. Even more, interesting, Devon based crowdfunding company Crowdcube broke the London scene’s monopoly (it took the crowdfunding platform just 16 minutes to raise £1.2m from private investors to help fund its expansion plans, read more on the story here). Ernst & Young stressed in one of their reports that regional centres are a must – so it makes sense that the city behind the Northern Powerhouse is ripe for fintech.

Back in May, AccessPay secured a £1m package from Barclays to support its growth, the first in the city to benefit from the bank’s new Innovation Finance product. Anish Kapoor, Chief Executive Officer at AccessPay mentioned in Finextra : We felt that the local Barclays team in Manchester demonstrated from the start that they fully understood our market proposition and drive to make business payments as easy as possible, recognising the potential of the business to achieve rapid growth. They also saw the huge opportunity to deepen the existing working relationship between the two companies. We are very excited to be going on this journey with Barclays.”

When it comes to fintech Barclays is a leader, mainly due to its Rise centres that work alongside the digital community. Their Manchester hub is one of seven globally, and the only UK branch outside of the capital.

One commentator mentioned that the Manchester fintech scene is still in its infancy and that it is fair to say that Leeds has been stronger, due to the fact that the Yorkshire city has a background of customer contact centres and back-end processing in finance.

Manchester Fintech in DueCourse

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Image Source : DueCourse

A recent Manchester fintech case study found that hit the headlines is fintech start-up Duecourse who raised £6.25 million in angel funding.

According to Tech City News, the total investment includes £1.25m equity funding, and £5m of debt for lending to UK SMEs.

The Manchester cloud-based invoice financing service’s backers include investors of property portal giants ZooplaLinkedIn, LoveFilm, and fellow fintech company, TransferWise.

DueCourse launched their invoice software a year ago and is primarily aimed at SMEs who invoice clients on a regular basis.  In a nutshell, the start-up uses it’s propriety risk engine to assess and unlock cash tied up in unpaid invoices.

Company co-founder and CEO Paul Haydock told Tech City News : “We saw the opportunity for a company to disrupt the market and help SMEs get access to the cash they need to fuel their business, in real time.”

In addition, he mentioned in Manchester Evening News that the company started because they realised traditional methods of finance are completely out of sync with what today’s SMEs need. They saw the opportunity for a company to disrupt the market and help SMEs get access to the cash they need to fuel their business, in real time. In addition, DueCourse wanted to be viewed as a new kind of cash flow utility – to put it simply, once a business has linked their accounting package for free, the invoice company is there in the background for them to access the money in their unpaid invoices whenever they need it.

Invoice trading is a popular tool for SME finance and according to the Cambridge Centre for Alternative Finance (CCAF), approximately 5015 SMEs used online invoice financing during 2015 so there is plenty of room for growth. DueCourse have stated that they expect to top £16.5 million in SME advances by the end of the year.

Manchester Fintech : Standing on the shoulders of giants

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It’s fair to say a lot of firms have taken inspiration from the fintech scene in the capital and this form of disruptive form of tech seems to be of an opportunity rather than a threat.

However, there  are challenges that remain, the need more for more infrastructure within the city as well as continuing to attract talented individuals hat can meet the pace of expansion will be a major area of focus.

Focusing more on the Northern Powerhouse will help transform another UK fintech centre, the likes of Tech North and Tech UK will help support companies that are dotted around the city by giving them the best advice, networks, support and inspiration they need to further the growth and success.

Bustling Berlin : A Look At The City’s Startup Scene

Bustling Berlin - A Look At The City's Startup Scene

Berlin – An Attractive Place For Startups

The German capital’s low rents, cool image and open attitude has attracted an array of creative startup businesses and the startup scene continues to flourish with a new startup being founded every 20 minutes, according to advisory agency Gruenden.

The city has grown up and become more professional according to Ahoy! co-founder Nikolas Woischnik. As a result, bigger companies are moving to the East German city and a lot of talent has been produced from the first wave of start-ups who are now churning out additional start-up businesses.

I recently started this post (well title idea and left it as a draft for a couple of months) and I am now resumed writing it in post-Brexit Britain, which has left many commentators (including myself) whether Berlin can topple London’s start-up and fintech scenes respectfully.

The Berlin start-up scene has already overtaken the UK capital in terms of venture capital investment and many argue that it offers a pool of talented international developers who may avoid the UK once new migration laws are put in place, in addition, commercial rents that are about a third of those in London, and has a better party scene.

From taking a huge interest in fintech this year, one thing that particularly fascinates me since the majority of the nation voted to leave the European Union is will UK fintech sustain its reputation for being the European fintech capital.

The likes of Berlin in my opinion have an opportunity to steal its fintech crown. For example, fintech start-ups such as Chicken Financial have already expanded their operations in the German capital after the Brexit vote.

Chicken Financial’s co-founder Samuel Ely told The Guardian last month that : “We expect there will be a long-term shift of fintech and banking from Frankfurt to Berlin and that Berlin could eventually become continental Europe’s new financial capital.”

Fintech giants TransferWise mentioned that they will not close their London office, however, they we will probably not grow the team based in the capital much more. Headquartering elsewhere is a possibility mentions Taavet Hinrikus (company co-founder) but the company hasn’t made a final decision yet.

N26 Inspired

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Image source  : FT

Any UK fintech might take inspiration from Berlin company Number26 (now N26) who has recently been given a banking license and giving a huge opportunity to shake-up financial services across the continent.

What’s even more inspirational besides fintech champions such as N26 is that compared to the likes of London and New York, it does not host a stock exchange or even have a major bank.

Unlike German banking giant Deutsche Bank which does come from the country’s financial hub, Frankfurt. The David vs Goliath battle here between N26 and Deutsche Bank has recently gained media attention, with the Frankfurt based bank currently going through an identity crisis, there has been reports that the bank is thinking about splitting itself into a lender focused on capital markets and another targeting retail and corporate clients.

Whilst Deutsche Bank seems to be going through an identity crisis, in the German capital N26 has attracted 200,000 customers with its virtual banking model. In addition, the fintech is already operating in six European countries.

N26 are working on some new features such as allowing customers share expenses between friends with a simple swipe between friends (similar to splitting an Uber fare).

N26’s chief executive officer Valentin Stalf, was recently interviewed by Bloomberg’s Caroline Hyde, she asks Mr. Stalf about the importance of being based in Berlin, she questions that many would have thought that Frankfurt would be an obvious place for a fintech company. Stalf mentions that he feels that it is a good thing not to be in the centre of finance, he stressed that at N26 they wanted to build a product that didn’t like it has been created from a traditional bank, Berlin is the place to attain the best creative people in Europe. N26 are very happy to be in the city where they can get the minds to work with them. He also mentions that Berlin (post Brexit) is even more attractive to Europe.

So what can we learn from Berlin? Firstly, from looking at the N26 example, the fintech has stayed in the capital because of the array of both domestic and international talent, the city as a whole is an international magnet for talent, similar to London which has attracted many tech enthusiasts and young entrepreneurs.

In order to keep its talent, Berlin has helped people relocate, it’s common for start-ups in the city to help with paperwork and with an employee’s first month of accommodation.

They also go that extra mile and provide free language classes, as well as help people open their first bank account and register in the city.

Start-ups in the German capital work hard to give their employees reasons to stay. Employees seem to stay at one company, and rarely switch from one role to another. The likes of offering flexible working hours to offering loyalty programmes are some of the methods used by Berlin start-ups.

In addition, Berlin definitely has more of a grass roots feel compared with London which has more of an established start-up scene. Berlin has a tenacious approach, and a main reason why the city has been put on the start-up map. A ‘we can do it’ attidude (whether that involves money or not) is apparent in pretty much all the start-ups in the city, with a strong ‘nothing will hold us back’ approach.

We’ve learnt from Berlin that all you need is a forward thinking and engaged approach for your start-up as well as having a strong community focus, this can make so many differences, regardless of where you are situated.

This type of philosophy that the German capital has on the start-up scene might sound very tempting for London start-ups and fintechs who are looking to relocate due to the Brexit vote, with lower rent prices compared with the UK capital and also having a wealth of talent in Berlin, many would find relocating to the East German city very tempting.

Spanish Fintech : Spain Bullish on the Fintech Scene

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When it comes to European fintech, for the majority, the likes of the UK, Sweden, and Germany all spring to mind straight away with all having a vast amount of companies dealing with an array of areas from money transfers to P2P lending.

However, Spain shouldn’t be overshadowed by its northern European counterparts. Spanish fintechs such as Kantox, Coinffeine, and peerTranfer for example, have caught the industry’s attention, and as a result have had very successful venture rounds.

Kantox from Barcelona, a foreign exchange service provider, offering SMEs and mid-cap companies a comprehensive solution to their foreign exchange needs, based on transparency, efficiency and value (as described on their website), has received over 7 million euros in investments from Partech Ventures, IDinvest Partners, Cabiedes Partners as well as a number of business angels.

In Addition, other fintechs such as Coinffeine which have also put Spanish fintech on the map, from developing a bitcoin and foreign currency exchange platform (and the first company in the world to be created using Bitcoins!)

Spanish Fintech : BBVA Turns To Fintech

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Image source : Fortune

From fintech start-ups to banks, national bank BBVA early this year bought Finnish fintech Holvi which provides online banking and financial planning services for small businesses.

The Spanish bank also took a 29.5% stake in U.K.-based mobile-only bank Atom, they also purchased U.S. banking service Simple (which is very similar to Holvi and only focuses on customers in North America).

BBVA have been very bullish on fintech and have a long term plan of becoming more and more digital savvy.

Chief Development Officer Teppo Paavola mentioned in a City A.M. article that : “We’re excited about Holvi as we share a vision about the benefit of technology for the customer. They use digital to bring a new approach to small business banking, where services essential to a business’ future such as invoicing are built into their core offer.”

Spain’s largest and most well known bank, Santander, has also been investing in fintechs and has launched a $100 million VC fund for fintech investments.

It’s particularly interesting to see the contrasting views in Europe with regards to fintechs, staying in Iberia, the region sees fintechs as acquisition targets. Research conducted by IDC and SAP found 29% of Iberian respondents linked fintechs with acquisitions, in contrast, only 14% of French respondents shared the same viewpoint.

French banks were the most likely to see fintech companies as a major threat, whilst Italian respondents viewed fintechs as a way of collaborating with banks (nearly half had this viewpoint).

With last month’s news of the UK leaving the European Union, many have questioned if London will be able to sustain its global fintech crown. It will definitely be interesting to see how the future will pan out for the city, the likes of Barcelona is a perfect place for any fintech that is looking to relocate. Since the 2008 financial crisis people in Barcelona have been forced to become more innovative, creative, and independent. As a result, a surge of office spaces have popped up and like-minded people have come together to create a tight knit community in the Catalan city.

It seems that the lesson learnt particularly in Spain is that if you can’t beat them, join them and BBVA have shown this, as Business Insider’s Andrew Meola points, out : “BBVA’s approach adds even more credence to the growing belief that established financial institutions and startups must work together in order to move ahead”.

Blockchain : It’s All About Trust

Blockchain - It's All About Trust

Many industries are buzzing about using blockchain technology – so what is this buzz all about and what is it exactly?

In a nutshell, blockchain is a way of recording data and also the foundation for cryptocurrencies such as Bitcoin. This innovative form of technology is made up of blocks of transactions (think of it like strands of DNA being joined together), and are added in chronological order.

The blockchain stores a wealth of information such as addresses and account balances from the genesis block (the first transaction), this is then added to the most recently completed block.

The blockchain acts as a public ledger which means that is simple to query any block explorer (details information about Bitcoin blocks, addresses, and transactions e.g. Blockchain Info) . The beauty of this is that you can view your own wallet address and view your bitcoin transactions.

Besides cryptocurrency, blockchain can also be used as a registry based system and can record, monitor, track, and transact an array of assets.

A good of way of thinking of how the blockchain functions is to see it as a giant Excel spreadsheet that can be used as an accounting system for transactions on a global scale. This can include a variety of areas such as finance, physical property, votes, health data, the possibilities are literally endless!

In addition, what is even more exciting about the “Internet of Value” as it has been dubbed, blockchain tech will further the value of the Internet of Things (IoT). Connected devices in the home and across various industries could automatically pay for the energy they use by writing to the relevant blockchain, creating a transfer of value based on the precise usage of the device (as mentioned by Forbes’ Bernard Marr)

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So how does trust come into play with blockchain? Users can trust the blockchain from the public ledger which is stored on decentralized nodes and maintained by miner-accountants, meaning there is no need to have a third party such as a bank. In essence, the blockchain allows the decentralization of all transactions on a global level.

Companies such as Lloyd’s have been open to adapt to new technologies such as blockchain. Their director of operations, Shirine Khoury-Haq, (who mentioned in a recent CoinDesk article)  that : “blockchain has the potential to improve the way insurers record risk, increasing the speed, accuracy and transparency of our processes.”

Lloyds have recently has taken on the responsibility of underwriting blockchain insurance startup SafeShare – “The insurance solution for the sharing economy” as quoted from their homepage.

So how was trust made? Trust was made directly from the blockchain and not directly with SafeShare itself to enter the business relationship. All Lloyds had to do was to approve SafeShare’s ledger, there was no need to study in detail their daily operations. The reason behind this is is that blockchain technology adds transparency by having a distributed ledger in place, therefore, it’s really hard for business to hide any dubious activities.

Trust and transparency are made in an instant, and this innovative form of technology has only just scratched the surface. It isn’t surprising that banks such as Lloyds are getting so excited about blockchain technology, even if the benefits for now seem quite distant. If we look at Cryptocurrencies for example, such as Bitcoin, which might be seen as innovative (depending on your point of view on the cryptocurrency), however, the innovation doesn’t come from the digital coin itself, it’s the trust machine that mints them.

Here I have just given a very basic overview on blockchain if you would like to know more about the technology I recommend  visiting the Reddit community r/BlockChain for the latest news as well as reading Blockchain Revolution : How the technology behind bitcoin is changing, money, business, and the world by Alex and Don Tapscott.

 

 

Nordic Fintech – A Look At How The Scene Is Shaping Scandinavia

Nordic Fintech - A Look At How The Scene Is Shaping Scandinavia

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

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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

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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.