The Fintech World Series: Finland, Iceland & Norway

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Fintech is exploding.
It is a global industry, striving to change the future of finance.
…And the future is now. At Kurtosys, we’ve set out to cover exactly what’s happening in the financial industry the world over, one country at a time. With so many places contributing to the advancement of our digital world, each deserves their own time in the spotlight.
To conclude our Scandinavian series, it’s a fun-filled three-parter featuring Finland, Iceland and Norway. All three countries are contributing massively to the Nordics’ fintech success. One has risen from the financial abyss, whilst the others are the world leading pioneers in innovation and digital infrastructure.
Let’s do this alphabetically: up first is Finland.

Finland: Helsinki or Swim?*

Finland-infographicFinland is the homeland of the cuddly Moomins. At least that’s been my personal knowledge of Finland since a very young age, but the creations of Tove Jansson are still very much cultural icons for the country, a nation that loves coffee, pizza and metal (the music genre). Indeed, that performance from Lordi to win Eurovision 2006 (the only Finnish entry to do so) will forever be engrained into our retinas, but did you know that three Finnish students also invented the first ever web browser with a user interface – Erwise – in 1994? The technological innovation doesn’t stop there, either.
Finland is famed for its eco-friendliness and efficiency, and attitude of grit and determination (known as “Sisu”). According to TechCrunch, 89% of large businesses and 59% of small ones use e-invoicing, which compared to a global average of 8.4% is quite astounding. Much of Finland’s tech revolution can be owed to workers rising from the shadows of Nokia, and it has an extremely influential gaming sector, adding to its rank as one of the top five innovative countries in worldwide, as judged by Bloomberg. Despite its (patronising?) coinage as “Sweden’s little brother”, Finland is still very much rising to the fintech prominence of its Swedish brethren; in fact, its smaller home market has given the country a strong global outlook.
Statista notes that transaction in the Finnish fintech market in 2017 amounts to US$8,745 million. This is estimated to rise to US$15,930 million by 2021, a growth rate of 16.2%. Its ecosystem prides itself on a strong collaboration between various business sectors, research institutes, universities and the government. It is noted to be one of the most improved EU countries in terms of the increase in its relative wage competitiveness and reductions in corporate tax rates, which is only 20%. Running a business in Finland is attractive as the country has an appealing political, regulatory and legal environment, lowering risks and costs. From a recent study by the European Commission, Finland is ranked top for its knowledge and innovation capacity. It’s doing pretty well, basically.
Even from as early as 1996, the Finnish bank assurance group OP launched their internet banking services, and this report from Deloitte taps further into Finland’s fintech development in recent years. Finnish investment has a preference to be state-backed, two such investors being Finnvera and Tesi (Finnish Industry Investment/Suomen Teollisuussijoitus), but the drawback for Finnish startups is obvious, as the licensing process is notoriously expensive and time consuming. Janne Lauha, Partner at Castrén & Snellman Attorneys, emphasises this bitter truth by stating:

“Start-ups seeking for an investment firm license in Finland should be prepared to invest at minimum some tens of thousands of euros and 12 to 18 months to get a license.”

Nevertheless, that’s not to say the Finnish authorities aren’t making a big effort to improve this. The local authority has already launched an Innovation Helpdesk specifically for fintech startups. A company can call or meet face-to-face with a staff member to get support about regulatory matters. Also, in September 2016, the Finnish Crowdfunding Act was passed by the Ministry of Finance to ease regulations within the investment-based crowdfunding sector. Apparently, like a fashion trend, it’s becoming popular to support legislative actions for technology companies, and even within Finnish media and politics, the backing for innovation-based entrepreneurship is extremely high. With an aim to bring this pop-culture-esque appreciation for startups to the Finnish government’s attention, it may continue to influence their investment decisions.
Since 2014, Finland accounts for 8.89% of Nordic investment across 8 deals totaling €39.6 million. It has a particular specialisation in the areas of financing for SMEs and e-invoicing, with its capital of Helsinki stating its ambition to become the Nordic’s fintech capital. It certainly seems to be going the right way about it. 90% of the country’s billing takes place electronically already, and the opportunities for fintech startups are becoming more abundant. Nordic bank Nordea launched a three-month accelerator program in Helsinki in 2015, in partnership with IBM, Tata Consultancy and Nestholma Venture Accelerator. This practice was repeated in 2016 in Sweden (“who’s the little brother now?” says Finland).
Elsewhere, FinPro (a public operator supporting SMEs to go global) organised a tour for Finnish fintechs to London, in cooperation with Fintech Circle. Pitches to investors at the UK’s fintech epicenter Level 39 certainly helped put Finnish startups on the world stage. Back in native Helsinki, HUB13 acts as a business innovation accelerator for fintech, worktech and martech companies. It is a co-working space which organises training and events. Fintech Finland is also an ecosystem invigorator, a community bringing together “the most rapid and divergent creators from the industry of Financial Technology”. Its partners include Suomen Pankki, LaskIT, Holvi and Turbiini (which provides workspace and workshops for startups) – Ihana!
Who’s investing? Mainly, Swedish VC NFT Ventures who, as Computer Weekly reports, has partnered with Finnish media corporation MTV to launch a fintech fund in Finland. It is looking to invest in tech startups, providing cash and media coverage in exchange for equity.
And to cap off this frolic through Finland, here’s a list of its already successful startups:
Arex – Founded in 2014, it offers short-term financing for SMEs and provides opportunities to link with investors.
Holvi – A user-experience centred banking alternative/current account with its own IBAN number, founded in 2011 with its HQ in Helsinki.
Invesdor – Invesdor connects businesses with investors globally and has held more than 60 successful rounds. Its own crowdfunding round in 2016 raised €1.2 million.
MONI – A modern platform to give everyone remote control of their finances: splitting bills, paying friends or making payments worldwide. Moni has been endorsed by Richard Branson and its pilot scheme to help refugees was praised by the UN. It doesn’t rely on traditional banking systems.
Tapp – A P2P commerce exchange network where users make purchases online via a network of micro-entrepreneurs as mobile points of sale. In 2016, Tapp closed a $9 million funding round to expand to Southeast Asia. It was founded in 2013.
Zervant – With over 100,000 users and a multi-million Euro deal with ING Belgium, this online invoicing software for SMEs is one of Finland’s success stories. Founded in 2010 with HQ in Espoo, it was also launched in Sweden in 2012. Zervant has traction in 7 European countries already, aiming to be active across 80% of markets by European markets by 2017.

Iceland: The Financial Phoenix

Iceland-infographicIt’s chilly. It’s small. Its parliament is the oldest in the world (the Alþingi, est. 930). We’re onto Iceland: the nation that drinks the most amount of Coca-Cola per capita, and home to both brilliant literature (the works of Snorri Sturluson) and a team of footballers so fierce that they humiliated England in the European Championships in 2016 (still not over it). But is its fintech landscape as volcanic as its natural one?
To answer truthfully, not yet. Deloitte reports that investments since January 2014 only accounted for 1.6% of the Nordic region, with 3 investments amounting to €7.8 million. Then again, that’s being harsh for a country with a total population of only 334,303 (!). Still, one of its fintechs Meniga (we’ll see more of them shortly) received one of the three biggest investments in that period in the Nordics (€20 million invested in Meniga, Tink and Qapital).
It also seems somewhat of an impossibility for Iceland to be in the fintech game, after suffering one of the worst financial crises ever recorded from 2008 to 2011, with its miraculous recovery outlined in this article from Washington Post.
A Bank Innovation post trying to determine if Iceland could be considered an alternative fintech capital concludes that is not so strong a contender yet. After banks had failed, been nationalized and then privatized, it has emerged from its crashed economy “blooded but unbowed” and with a vision to “bail out the people and jail the bankers”; so, surely the fintech route is a valuable option? But as the site notes, it is difficult to attract workers to the country’s harsh conditions and its main startups are in the realms of medicine and genomes. Similarly, Iceland has banned the use of Bitcoin and cryptocurrencies since 2013.
The Balance describes the fact that Iceland hosts some of the largest Bitcoin mining facilities in the world, and as it is not part of the EU, it is not beholden to outside currencies. By using Bitcoin, financial crime (a prevalent topic in the country) could be hindered, and technology and business growth could be stimulated by the uptake of Bitcoin and blockchain technology. Indeed, in 2014 Auroracoin was launched as an alternative cryptocurrency and in last year’s elections, the Bitcoin-friendly Pirate Party won 10 seats in Parliament. Perhaps in the near future, the government may reconsider their attitudes towards digital currency.
Similarly, Iceland’s unique banking system has relied on instant payments for almost 20 years and there is a core banking platform for all Icelandic banks. This begs the question: is there a need for innovation? The banks seem to have responded, and are actually embracing cooperation with fintech accelerators. Arion Banki was the first bank in the country to host a hackathon in June 2016: Fintech Party. It allowed companies to offer financial APIs in the hackathon to provide opportunities for startups to develop their products. Arion has also worked with the accelerators Startup Reykjavík and Startup Energy Reykjavík since 2012. Startup Iceland is a conference dedicated to entrepreneurship the startup community, founded in 2009, and is referred to as “a Woodstock for startups in Iceland” by its founder, Vala Kamallakharan. Íslandsbanki was the first Icelandic bank to use a mobile money wallet, provided by Memento (founded 2014). Memento is building a platform to allow banks to share personal data.
Íslandsbanki was also the first to utilise the personal finance management (PFM) solution Meniga. Founded in 2009, the tool is now used by 25 banks in 16 countries (including ING and Skandia), reaching 25 million people from Spain to Russia to South Africa. It announced a deal with Santander in 2015. It provides high UX and apps/websites for banks to maintain relationships with clients. Meniga’s new business model is based on joint ventures or partnerships with banks. As its co-founder and CEO Georg Ludviksson notes, “Meniga is very much a child of Icelandic financial crisis”; its innovative approach as a fintech is revolutionising financial management in Iceland and abroad. So far is has raised $6.5 million, as reported by Business Insider UK.
And whilst the Iceland fintech scene is at a nascent stage currently, there’s surely more to come in the near future. Other startups are below:
Easbit – A cryptocurrency software developer and user-friendly mobile bitcoin wallet, founded in 2015.
Kóði – Provides trading solutions for financial customers.
Netgíró – A payments system for use instore and online. Users can pay with a credit card in an app. 1,700 retailers offer Netgíró as a payment method. It was founded in 2012.
Valitor – Offers online and e-commerce payment solutions and works internationally (it was one of the first companies to receive a European cross-border license). Valitor was founded in 1983 with its HQ in Hafnarfjörður, Gullbringusysla.

Norway: Fjords & Fintech


“Norge er et flott land fordi det er et trygt, fint og rikt land. Vi har flere flotte ting i Norge enn troll, fjord og ostehøvel. Ikke hør på Elliot. Også vi selger alkohol etter 6, men det er veldig dyrt.”**
– Jen, native Norwegian and friend of Kurtosys

As well as that, Norway is said to have “the best digital infrastructure in the world” (as judged by the World Economic Forum’s Global IT Report 2015), hardly surprising considering the fact that 95% of Norwegians have access to the Internet (and that it was the second country in the world to be connected to it). It’s also retreading the footsteps of its neighbour Sweden; only 6% use cash daily and smartphone penetration is about 80%.
In Oslo alone, there are approximately 90 fintech companies, many focusing on the markets of security, e-identification and authentication (companies including Zwipe, Encap, Signicat and Promon), although robo-investments are an emerging force and mobile payments have grown from virtually zero to having “vast penetration” in under two years. All of these facts contribute to Deloitte awarding Oslo the rank of 22 in the Global Innovation Index. Norway has had 6 investments since 2014, accumulating to €12 million. In 2017, the transaction value in the fintech market is US$13,507 million and is estimated to have a growth rate of 14.8% by 2021 (US$23,479 million).
According to the Doing Business 2017 Report, Norway is ranked 6th in the list of most business-friendly regulatory environments. One organisation, IKT-Norge, aims to maintain this reputation. Amongst its many aims is to attempt to expand the SME market, increase industry value, reduce risk and provide access to capital. Norway’s characteristics also contribute to its success as Let’s Talk Payments notes: they’re early adopters of tech with an increasingly rapid startup community and there’s heaps of support for early-stage companies from the government.
On the subject of governmental issues, here’s an article detailing what the incoming PSDII regulation will mean for Norwegian FinServ, but these are some of the main takeaways:

  • The implementation of PSDII into Norwegian law will firstly depend on the adoption of new financial EU-legislation.
  • On 29 Sept 2015, the Ministry of Finance asked the Norwegian FSA (Finanstilsynet) to prepare a consultation paper on proposed changes for the implementation of EU-regulation and directives in EEA-agreement and Norwegian law.
  • The main changes that PSDII will bring are a broader scope, and regulation of third parties offering payment services.
  • PSDII allows for operators other than banks to offer payment services. Banks must facilitate access to customer care programs to third parties giving new entrants access to their customer base.
  • Over 100 banks have teamed up with DNB to collaborate on the Vipps app to build a strong payment service provider in Norway. One efficient, high UX solution will make it harder for new service providers to enter the payments market.

Similarly, whilst other Scandinavian countries aren’t taking this big step, the Norwegian government is committed to a regulatory sandbox principle, as in the UK, in 2017.
2016 proved to be a landmark year for the consolidation of/by Norwegian companies, as reported by Hernaes. In the mobile payments space, Meawallet was acquired by Swedish company Seamless; Encap was acquired by US-based AllClear ID; Retail Payment teamed with IBM, Capgemini, Forgerock and Verifone to build a platform to enhance the retail industry at Money20/20 2016; and in September 2016, Norwegian VC company Northzone closed its 8th fund, capped at €300 million.
Clearly, like many other European countries, once financial regulations are amended and specific governmental laws are introduced, the Norwegian fintech scene is going to skyrocket. To cap off this article, and to illustrate Norway’s ever-growing landscape, here are its main investors, accelerators and startups:





  • Auka – Based in Oslo, Auka is a payment app for smartphone to pay friends or merchants in-store. It made an exclusive deal with the second largest bank Sparebank 1. It has 500,000 Norwegian customers and was founded in Oslo in 2010 by Daniel Döderlein.
  • BankAxept – The Norwegian national payment scheme. 9 out of 10 card payments with Norwegian cards occur with BankAxept. At the end of 2015, 7 million cards were used, making almost 1.5 billion transactions.
  • BankID – A personal electronic ID for secure identification, wholly owned by banks, and can identify 3.5 million Norwegians.
  • Edgefolio – A platform connecting institutional investors with hedge funds, launched in 2013.
  • Spiff – A social saving service to close inequality the in financial world, hoping to empower women to financial independence. Spiff was founded in 2015 by Carl-Nicolai Wessman and Steve Mellbye-Stølen with its HQ in Oslo.
  • Vester – Based in Oslo, Vester is a banking platform for the collaboration economy. It enables banks to compete in P2P consumer finance, P2P SME lending and marketplace solutions, founded in 2016 by Jarle Holm and David Haum.
  • Vipps – A mobile payment app for smartphones developed by DNB, open to customers from any Norwegian bank.

You may be as exhausted as I am, that was quite a trek, which unfortunately brings our Scandinavian adventure to a close. As a region, it dominates a huge chunk of global fintech action; Sweden is as much a forerunner as Denmark, but Norway and Finland’s innovative nature provides each country the chance to take the lead. And despite Iceland’s miniature size, its small population still manages to continue to offer a massive contribution to Nordic fintech. Watch this space.
*Could I do better with that title? Most probably. Please accept my apologies. But, the answer is definitely swim.
**Feel free to translate this – it wouldn’t be accurate to leave out trolls, fjords and the cheese-slicer though, right?
Have any thoughts on fintech in Finland, Iceland and Norway? Let us know in the comments below, or you can tweet us.
Who will be under the fintech microscope next time? Check back soon for more episodes of the Fintech World Series!

Elliot Burr

Elliot Burr

Fervently chatting about the future of funds and fintech.