Fintech Disruptors Report UPSTART2016 Banking NORDIC EDITION #Nordicdisrupt
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Audit | Tax | Advisory | Accounting www.bdo.no INTRODUCTORY LETTER 2
FOREWORD 3
INTRODUCTION 4
KEY FINDINGS 6
U PRISING 8
P ARTNERSHIP 11
S IMPLICITY 14
T RUST 17
A GILITY 20
R RELATIONSHIP 23
T TRANSPARENCY 26
INTERVIEWEES 30 www.magnacartacomms.com Copyright 2015 MagnaCarta Communications BDO AS BDO Managing Partner Trond-Morten Lindberg journey. fintech unique own, your continue you as useful it find and report this reading enjoy you We hope www.bdo.no/en visit please deliver, we services the of overview an and details contact For needs. business your discuss to time devote we and attention, our of centre the at are needs your that ensures experience client best the providing on focus Our business. their to impact apositive making about care who experts by provided services bespoke means this clients our For engagements. our of all guides service client exceptional providing of vision Our quality. highest the of services professional comprehensive customers fintech offer can BDO competencies, relevant other and entrepreneurship technology, in finance, expertise With finance. and improvement continuous development, business and restructuring governance, risk, to in relation advice providing conditions, challenging navigate clients help department advisory Our complexity. any of conundrums legal on advice provides department tax our while processes, economic clients' our on assurance provide and streamline manage, auditing and in accounting services Our business. fintech ambitious any for partner business avaluable is BDO services, accounting and audit tax, advisory, of provision awide With market. important and attractive aparticularly as sector the upon look we businesses, fintech offer can BDO that services of range the Considering in Norway. conditions favourable and levels competency high to owing industry, Norwegian of sector significant and alarge be will fintech that believe we BDO, At globally. development fintech of vanguard the at undoubtedly are sector financial the for solutions technological future develop that entrepreneurs Norwegian significance, mounting and growth impressive their With interest. great with businesses fintech Norwegian of emergence the upon looks BDO sector, private in the growth solid of record track own our With A business partner for fintech
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of upstart innovators as they seek to re-make finance for the digital era. digital the for finance re-make to seek they as innovators upstart of raft region's the of support continued the for call the makes and ecosystem fintech the of breadth the explores it 2016, February and 2015 November between Conducted region. Nordic the and Europe across banks incumbent and start-ups 30 than more with interviews of result the is report The delivery. services financial of phase new the for course the chart to countries Nordic the and Europe across innovation fintech of currents shifting the of stock takes Edition Nordic Report: Disruptors Fintech the this, to In response muted. been has far so upstarts, digital local-market for support their and reform, to urgency of sense their means however, Europe of rest the to relative base customer trusting alargely from protection their and digitisation, to path the along progress Their innovators. fintech new from challenge the by confronted being also are banks Nordic underway. well is Banking Start-up of era the entrants, market digital-first new to incumbents multichannel traditional From industry. the across right models business of rethink aradical to contributing are foundations its from industry the shaking forces the that clear was it revival digital banking's European of makers the interview to project the started we When From FOREWORD START-UP to banking Nordic UPSTART
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Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications most successful examples of mobile payments anywhere anywhere payments mobile of examples successful most the arguably are what created have Sweden and Denmark in projects payment mobile bank-owned recently, More cash. and paper from away move the fuelling inertia the to adding payments card for established were companies owned jointly Norway and in Denmark and company ATM ajoint up set banks country’s the InFinland, followed. cooperation inter-bank of examples profile high several hold took automation As for everydayservices banking. digitised of use the to accustomed fully consumers, and sector private to public from sides, all on market services afinancial create helped have projects technology bank collaborative profile high several and century the of years early the through automation banking Widespread innovation. fintech inspire to most done has that culture banking region’s the is it explains, report this As Innovation by and banks for the financial own region’s the markets, advanced in other peers banking to contrast in marked shows, report this As Holvi). and (Meniga banking business and planning, financial (Lendify), lending peer peer-to- Zwipe), and (BehavioSec technology biometric and authentication advancing companies as well as world emerging the across inclusion financial improve to helping is that Kenya’s to M-Pesa answer Norway’s includes list This services. financial of spectrum full the across innovations fintech successful of list along to –in addition in Europe more) or dollars abillion around of avaluation with (companies status unicorn seven only of –two Klarna and iZettle companies technology payment including successes high-profile several spawned has region the years, five last In the enclave. fintech adynamic of development the to contributed –has match to industry banking sophisticated a with societies technologically-literate educated, well- –affluent, characteristics unique region’s The industry. technology financial avibrant developed has consumers, modern of needs the meets that design affordable accessible, for world the around a byword and others, among Spotify and Skype brands digital global to home region, Nordic the that surprise no is It Must be something in water the INTRODUCTION 6 generation of digital upstarts to look to other regions. regions. other to look to upstarts digital of generation a force may failure industry; banking digital region’s the of growth the mean will Success others. among organisations, services financial and banks incumbent from support to access their on heavily depend will thrive to talent fintech of wealth region’s the enabling that means hubs, fintech other to relative countries Nordic the across capital venture of pool Asmaller must. they collaborate But diluted. been has cooperate to banks for impetus the consumers, by liked, generally and trusted, well banks region’s the with and market services financial dominated bank- the to access gain to them for hard often is it that report fintechs Upstart slowing. is zeal collaborative the that signs are there underlines, report this As Denmark. of case in the service, MobilePay the using now country population the of percent 40 over – with payments. electronic of adoption in mass apioneer Scandinavia making cash, with made are region the across payments of 6percent than less time same the At in 2014. region Nordic the than companies fintech early-stage and in new investment more secured Ireland and UK the only InEurope, tradition. that continue to helping is investment in fintech boom current The process. in the industry services financial global the of expansion in the role vital a played and innovators fintech regional of wave early an foster helped that Alaunch century. twentieth the of much for in use system outcry open the from trading electronic pivotal role in switching the world’s stock-markets to a played that 1980s in the platform trading electronic Group’s OM Swedish of creation the to 2010 beyond back stretch innovation financial Nordic of examples Early world. in the highest the among are that availability internet of rates regional and penetration smartphone heavy of acombination by on spurred been has scene, start-up fintech global entire the of amicrocosm ecosystem, Nordic uniquely This profitably. customers serve to costs high the tackle to innovation of use greater and processes banking traditional of automation in the head-start decade three- anear banks Nordic given has 1990s in the crisis Source: MagnaCarta Research MagnaCarta Source: Source: Computerweekly.com, Nordic DIBS E-commerce report, Meniga.com, MobilePay, World Payments Yearbook 2015 TABLE 2: NORDIC FINTECH STARS FINTECH 2: NORDIC TABLE Holvi Lendify Zwipe Meniga BehavioSec Trustly iZettle Klarna Share of cashless payment as % of all payments all %of as payment cashless of Share $ raised to date to $ raised TABLE 1: NORDIC FINTECH PENETRATION FINTECH NORDIC 1: TABLE $280 million $280 $166 million $166 $8.2 million $8.2 $6.5 million $6.5 $30 million $30 $3 million $3 million $3 $7 million $7 Denmark Sweden Finland Iceland Norway 99 % 99% 95% 89% 84% payments per person per person payments non-cash 450 Biometric security Biometric Business banking Business Lending P2P Financial planning Financial Biometric security Biometric Online payment Payments Online payment
95 % 7 Fintech Brand MobilePay EasyPark Meniga Swish Holvi Source: Nordic e-Commerce Survey 2015, DIBS Payment Services Payment DIBS 2015, Survey e-Commerce Nordic Source: SCANDINAVIA IN ADOPTION PAYMENTS MOBILE 1: FIGURE Denmark Sweden Norway 2015 2012 2015 2012 2015 2012 84 % Audience of 35 million consumers million 35 of Audience countries in29 Available 25 million +transactions million 25 Used by 60% of population of 60% by Used Used by 40% of population of 40% by Used (% of all transactions) transactions) all of (% 89 % 16% 20% 21% Nordic cashless adoption cashless Nordic non-cash payments 450 per person 38% 40% 42%
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications experience, rationalise product lines and improve returns, which now stand on a level comparable to utilities companies. utilities to comparable alevel on stand now which returns, improve and lines product rationalise experience, user- the simplify to banks for opportunity the highlights research the institutions, multi-channel for impractical be may strategy this While companies. product single simple, themselves cases in most entrants, fintech new by distributed products straightforward to trend the driving is smartphones, specifically and channels, digital through consumers to access Easier Simplicity process. in the marketplace financial the of size the grow and dividend adigital from profit to economy wider the and banks incumbent allow will legacy this Maintaining flagging. be now may but 1990s late the since well region the served have that Traditions innovation. cost-efficient for globally-renowned industry, services financial avibrant of development the fostered have sector banking the within co-operation and collaboration of traditions which to degree the underscores report The Partnership delivery. services in financial revolution the complete to upstarts digital new allow to institutions export-focused other and industry services financial the from support on depend will brands fintech global of generation anew in creating success regional time, same the At services. financial digital customer-first, of creation in the apioneer as itself establishing fast aregion and ecosystem fintech Nordic the of breadth the reveal interviews The Uprising dividend. adigital into divide digital the transform to how to as questions fundamental themselves asking are many position market their define, re- or define, to seek they As entrants. fintech new and organisations, services financial and banks incumbent for agenda the dominating are that below out set themes inter-dependent seven, discusses and identifies report The industry. services financial region's the of position protected relatively the threaten to promises which models business cherished challenging are upstarts digital customer-first of breed anew 1990s, late in the crisis regional own their from lessons the learnt having Europe, of rest in the peers their than better fared banks Nordic While revolution. smartphone the through consumers to access cheaper and services, financial retail into competition more introduce to regulation favourable by supported Asea-change compete. to unable previously were that competitors non-bank to market the opened has in institutions trust of loss consequent the and banking global of implosion the thing, one For interpreted. being still are industry services financial the for implications longer-term The the German economy. of size the to equivalent is levels pre-crisis by predicted that to compared 2015 of quarter second in the output European in difference –the today felt being still are They far-reaching. were 2007-2009 of crisis financial the of consequences The UPSTART Banking KEY FINDINGS KEY 8 Source: statista.com Netherlands UK &Ireland Nordic region Germany FIGURE 2: FINTECH INVESTMENT BY REGION 2014 82 306 345 623 ($) CB Insights Disrupting FS Webinar FS Disrupting Insights CB customers. with connection the re-build and trust restore help to transparency to commitment aroot-and-branch require will aresponse pricing, opaque and businesses complex by characterised often banks, For internet. mobile the of age in the models business simple and pricing straightforward with entrants new of influx an by complemented been has Moneysupermarket.com, as such sites comparison price of form in the century, the of beginning the at wave internet first the by enabled transparency price The Transparency relationship. longer-term the fosters that a way in transparently services their monetise to how understand to insight customer greater for data of pools deep leverage to potential the seizing mean will this banks, For customers. their with providers services financial of relationship the redraw to opportunity the to attention drawing is report, in this those including entrants, fintech by experience user on focus The Relationship strategy for large institutions. innovation agile an to ingredients essential as viewed increasingly are failure' of fear the over 'getting crisis, financial awrenching after paradoxically and, bank the outside parties third with collaboration greater however, critically Most and acquisitions. development internal investment, capital include venture that initiatives innovation with change cultural this to adapting are banks how underline report in this Organisations refined. continuously and market open in the tested quickly, more launched products new with innovation, for demand consumer altered radically has use app Smartphone Agility and collaboration. innovation of culture admirable sector's the support to continue and experiences, product customer-first on emphasis an place to need will they base customer aloyal maintain to banks for in order that shows research The option. viable a not is advance their halt to crisis next the for waiting adownturn, by tested be to yet have start-ups fintech region's the of many While innovation. and technology for enthusiasm local does so but strong remains banks in Nordic Trust Trust FIGURE 3: FINTECH FOCUS AREAS OF 12 TOP VC INVESTORS SINCE 2007 SINCE INVESTORS VC TOP OF 12 AREAS FOCUS 3: FINTECH FIGURE PAYMENTS FINANCIAL PLANNING 9 LENDING BITCOIN
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications 1 percent had a clear plan in place to achieve this. achieve to in place plan aclear had percent 40 than less surveyed those Of era. digital in the compete two model business and strategy current their rethink to aneed recognise banks of percent 88 that revealed study industry aregional threat, potential their discounts that market banking aclosed to access gain to fight entrants new As however. option an not is Complacency Europe. of rest the and US the to in contrast sharply less felt was industry banking Nordic the on crisis financial global the of impact the 1990s, the of lessons the learnt Having section). Partnership (see fading be may zeal collaborative the that signs are there recently more underline, research the for interviews the of some As other advanced economies. in peers by unchallenged remains that success of a level With in Sweden. Swish and in Denmark, MobilePay as such solutions payment mobile of take-up in consumer evident is dividend collaborative thirty-year this of value The down. costs keep to cooperation greater forced necessity economic as other, each with in collaboration Often customers. their of trust the restored and providers re-positioned themselves as innovative, reliable service sheets, balance their rebuilt have banks region's the crisis, banking Nordic the since decades three near In the initiatives. fintech owned bank- by thwarted, even or eclipsed, often is progress where in countries succeed to Struggling challengers. digital of run latest the of many by encountered obstacles and Seamless, the interviews reveal the Klarna in iZettle, stories success Swedish, mainly albeit regional, some of exception obvious the and ecosystem, fintech adynamic of appearance the Despite revolutionIs the coming? is region The delivery. banking impacting shake-out digital global the of amicrocosm is scene fintech regional the which to degree the And innovation. Nordic of breadth the highlight report in the represented businesses of range The industry Nordic cottage A Insights from the interviews hint at future opportunities opportunities future at hint interviews the from Insights think. they than more other each need may They UPRISING Digital disruption in Nordic retail banking, Accenture 2015 Accenture banking, retail Nordic in disruption Digital 1
10 interviewed for this report. been have which of Many banking. business and payments to blockchain from marketplace, services financial the of corners all representing companies stage early to home It is seen as a cost and the barriers are high." are barriers the and acost as seen is It change. to needs mind-set the and industry atraditional is "insurance Solutions, Cloud start-up insurance technology of executive chief Sjøstedt, Axel by reflected A view entrants." new for hard very It's muscle. with providers existing fight to have They entry. to barriers high have providers "small explained, mCash, start-up payment mobile acquired recently that 1 Group, SpareBank Norway's of president vice Hernæs, Christoffer grow. them help to partners suitably-sized attracting and cultures corporate entrenched overcoming providers,service the research revealed the challenges of financial their from get they service the with content relatively is that population aregional from Apart high. is upstarts fintech Nordic for success for bar the need, consumer meet explicitly that up ground the from services build to start-ups fintech of ability innate the Despite experiences." customer exceptional and solutions seamless make to in order challenge a are banks within silos and in divisions organizing Traditional yet. it done has one no and environment multi-channel a] seamless [building challenging is "it bank, the for delivery service multi-channel of challenge the explained Bank, Danske pan-Nordic of Norway for manager country Trond Mellingsæter, alike. incumbents and upstarts benefits that relationship asymbiotic for to entry. have to fight existing They Small providers have high barriers Christoffer Hernæs, SpareBank 1Group SpareBank Hernæs, Christoffer providers with muscle. with providers
2010, is now available in thirteen countries. Founder Magnus Magnus Founder countries. in thirteen available now is 2010, in launched iZettle, company technology POS Mobile iZettle. and far, so Klarna successes fintech Nordic profile highest two in the evident is achieve can region the what of scale The tools." new with thing same the do to not important way. It's own your know to need "you research, the during elsewhere repeated and commented, interviewee one As window-dressing. just than more are that solutions create to entrepreneurs fintech forcing already is sophistication banking local that managers bank senior and founders up researchThe revealed widespread recognition among start- market. banking automated, highly- already but small in arelatively compete to having of economy export region's the to advantages additional some be may there longer-term In the Source: Hernæs Christoffer DAY-TO-DAY LOANS PLANNING WEALTH
FINANCE AND BORROWING 11 business model to the banks." the to model business adifferent has iZettle and underserved… are markets These services. business and hospitality retail, are segments main our and business our of 30-60% approximately is segment] SME "[the market, unserved an prioritises that model abusiness to success company's the attributes Nilsson SERVICES PAYMENT own way.own It's important You need to know your BLOCKCHAIN BITCOIN/ thing new with tools not to do same the Fintech start-up, Norway AUTHENTICATION/ SECURITY
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications systems. Mobile Life is an internal program in the bank were were bank in the program internal an is Life Mobile systems. legacy old of side the on solutions We build Bank: Danske other things? among regulation, systems, legacy old as such providers services financial for challenge the handle you do How together. solutions new develop and innovate and innovation own utilize to customers and partners with together work and environment bank traditional the outside think to We have streamlining. and data big with possibilities enormous with us provides Innovation services. and products our and working of way our of in terms ourselves disrupt should we how also but digitalisation of in terms both innovations new preparing and prioritizing By Bank: Danske challenge? the to responding Bank Danske is How disruptors. fintech and entrants new for closely market the follow we competitors, main our still are banks traditional Although model. business our and culture to interface customer the from everything involves This world. digital the to fully bank our readjust to is challenge biggest The Bank: Danske innovation? of in terms faces Bank Danske challenge greatest the is What challenge. digital the to rising at efforts bank’s the about talks Trond Mellingsæter, Norway, for manager country Danske's Here, Ireland. Northern and States Baltic in the operations to in addition Finland and Sweden Norway, in Denmark, customers business and personal serving institution financial amulti-channel is Bank Danske Pan-Nordic Adjusting digital to the age: Danske Bank abroad. venture to able be to in order home at barriers competitive breach to entrepreneurs individual of ingenuity the than more on depend will however flourish to continues Ensuring that the Nordic region's fintech ecosystem inception. from focussed globally be to fintechs forcing are markets regional and local Small Europe. across countries 29 least in at available now is solution company's The growth. to path asimilar plotting is development of stage earlier amuch at although Holvi, start-up banking business Finnish 12 dictating our decisions, and the opportunity is to lead or lag. or lead to is opportunity the and decisions, our dictating is behaviour Customer customers. business and private for –both experiences customer exceptional and solutions seamless make to in order achallenge are banks within and silos divisions of structures Traditionally organizational yet. this achieved has one no and environment channel multi- aseamless creating challenging is It Bank: Danske customers? your reach to decide you how dictates What banks? large for environment sales multi-channel the is challenging How lending. house and pension like events life major on primarily counselling for branches the using continue We will in Norway. 30 to 55 from branches our reducing than complex more is It Bank: Danske complex? more it is or smartphone web/ to sales direct and branch from a migration simply services financial of in delivery shift the Is within. from ourselves financing. We disrupt and residential/housing combine to run we project a is Sunday engineers. employees including robot new 65 recruited have we talent before it looks elsewhere. fintech of pool enviable its of uprising the enable to mantle this up take to need now Banks everyone. benefits that market banking alarger creates innovation collaborative shown, has payments mobile of take-up drive to Denmark and in Sweden banks between cooperation the As it. on depend may banking Nordic of future The crisis. Nordic banking the since decades three the over established been have traditions of partnership, collaboration and experience that the on rely to need still will success fintech constrained, relatively is capital investor to access where In aregion Inter-bank collaboration to enable easy consumer authentication benefits the whole banking market market banking whole the benefits authentication consumer easy enable to collaboration Inter-bank valueFigure 4: The ofpartnership BankID: cooperation of traditions long-established now by enabled been has penetration payment in mobile success Regional country. the of percent 40 by used now and banks Swedish six by in 2012 launched Swish, by boosted been has in Sweden payments mobile of Adoption population. the of percent 60 nearly by used is mobile to cards from payments shift help to Bank Danske by created in Denmark, MobilePay this. of example recent most the is adoption payments Mobile region. the across evident is revenues services financial to partnership of value potential the of Proof and innovation. development fintech of models new for atestbed region the made have partnership inter-bank, of years thirty nearly of experience Scandinavia's businesses, their for economy collaborative API, open source, open the of implications the with terms to coming are Europe of rest the across others, among networks, payment loop closed the and banks While exception. one notable with world, advanced the of rest in the counterparts their match largely region Nordic in the delivery services financial of forms new of development the driving currently forces The in digital "I" no There's Partnership to Proprietary PARTNERSHIP BANK A AML KYC Bank ID No secondary authentication required Authenticated Customer 13 and used by over two thirds of the country. country. the of thirds two over by used and banking online and declaration tax to agreements signing from ranging services for online themselves identify to consumers and banks sector, public the and businesses for mechanism primary the now is BankID in 2010. released version amobile with Nordea and Swedbank SEB, including banks largest Sweden's of aconsortium by developed was solution The identity. their prove to customers banking online for way easy asecure as in 2001 developed BankID, was culture collaborative the of beneficiary early One in 2014. banking mobile used country the half nearly and banking online used country the of percent 82 Sweden In table). (see in Europe population to relative branches bank of ratios lowest the of some has region The countries. in developed peers their than banking branch-based from away shift the to sensitive less and channels digital via banking remote to accustomed more is that market banking a to contributed has that development shared and automation to move the accelerated 1990s in the crisis financial A deep launch. after year first in the US, in the 6owners iPhone of 5percent over alittle by stores physical in goods buy to used was ApplePay comparison reasonable a As management. account to payments from services banking access consumers how shape helped have that Loan BANK B Credit Card Secondary Account BANK C BANK D
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications the threat of fintech upstarts. upstarts. fintech of threat the dismiss and streams revenue cherished protect in to close banks as years in recent dissipated have may industry banking the of zeal collaborative the thriving, are start-ups fintech regional some while that, reveals research The compete." still they but infrastructure acommon share Today [banks] costs. cut help to together infrastructure the We built society. atrusting and country asmall We're years. many for banks between trust of culture astrong have we that is in Norway unique is "what re-launch, and adjustment of rounds several off, after took project Norge BankID As Mr Mr As experience. shared of decades three nearly of result the is now from benefiting is region Nordic the that dividend collaborative The optimistic. overly- be may term short in the challenges current overcome to development to approach partnership the emulate to countries in other sectors banking by Attempts citizens. European to services public to access improve help to project e-ID apilot discuss to Barclays and Commission European the of attention the drawn has schemes BankID the of success The understood. being only now are Europe of rest the for spirit collaborative early this of benefits The director. managing company's Håberget Erling Odd to according users," unique million 3 over with use authentication identity sector public for market the of percent a50 gained has Norge BankID and IDs electronic different with services electronic public 670 access can citizens Norwegian "Today below). infographic (see in 2014 banks Norway's by owned acooperative as established later and in in 1998 launched first was report, this for interviewed Norge, BankID region. the of parts other in successors inspired has project the of success The on side the old ofthe legacy systems. Håberget notes, it was nearly 14 years before the the before years 14 nearly was it notes, Trond Mellingsæter, Norway Danske within and we build solutions We disrupt ourselves from from ourselves disrupt We , the the , 14 new competitors. new from risk at potentially are revenues banking Nordic of athird to up that estimates analysis Recent banks. Nordic for option long-term aviable not is complacency peers, European their to relative position, aprotected of In spite needs." customer resolve to approaches innovative and new with SMEs from competition prohibit BankID, Nets, Evry, like companies through market, to routes and share market end-user their with acting Telenor and Posten DNB, like businesses state-owned fought... be will quo status the fit not does that innovation "disruptive experience, own his on reflected Lemberg Mr As entrants. unproven, new, often with working toward hesitancy some explains partly perhaps that Afact 1990s. late in the crisis regional the of lessons the learnt having protected, better were institutions financial Scandinavian 2008, of crisis financial global the of turmoil the after reform to pressures multiple under are Europe of parts in other banks retail Whereas local partner." apreferred from backing without start-up asmall with up sign to reluctant be may customers prospective and new while on, jump distributors' before market the seed to We have dilemma. egg and chicken the is lift-off,"it get to partners right the find to struggling technology proven with companies innovative for challenge the explains executive of Protectoria, a firm Norwegian cybersecurity chief Trond Lemberg, fintechs. of generation new region's the for bar the raising is Valley Silicon or in London hubs fintech global to compared region in the capital investment available of pool smaller the with combined This, or back-office operations. operations. back-office or network bank's the to connected be later can that services or products useful with entrepreneurs fintech identify and attract to accelerator adedicated with Barclays, bank UK of that to similar is approach Nordea's talent. fintech new court to efforts prominent most the with institutions region's the among are Danske and Nordea banks pan-Scandinavian threat, competitive the meet them help to years, Inrecent unheeded. gone not has warning The 2 Digital Disruption in Nordic Retail Banking, Accenture 2015 Accenture Banking, Retail Nordic in Disruption Digital 2 will not buy a new legacy system." legacy anew buy not will we and within from ourselves We disrupt financing. and residential/housing combine to run we aproject is Sunday engineers. robot including employees new 65 recruited have we were bank in the program internal an is "MobileLife manager of Danske'soperations Norway explains, country Trond Mellingsæter, as within", from "disrupt bank the help to developers recruit to initiative internal an programme, MobileLife its launched in contrast Danske growth." for areas new discover and skills, new attract and identify culture, organizational change ideas, new generate help to innovators outside to expertise and assets property, intellectual own organization's the up opening and resources, and capital knowledge solutions, technology external with engaging means this Nordea like organizations large For revolution. digital the of heart the at is innovation "Open reflects, Norway Nordea at banking of head deputy Marjamaa, Randi As external technology solutions, knowledge capital and resources, For organizations large like Nordea this means engaging with and opening up organization's the intellectual own property. Open innovation is at heart the digital of the revolution. 15 region thrive in the new digital era. digital new in the thrive region the help to way third aviable offers innovators technology with partnership of tradition Nordic The story. sob local and success global between difference the make can markets in small capital risk-friendly to access Limited abroad." sold are many too and market this left have many "too remarks, Lemberg Mr as constrained less is capital where elsewhere go to champions export future forcing mistake, a be would businesses disruptive potentially their and challengers, digital with partnership on Turning back its dividend. digital a exploit to ability region's the of proof are Klarna and iZettle pioneers fintech and Skype, and Spotify titans, tech of creation The well. countries individual their and region the of interests longer-term the served has Scandinavia across potential,export culture the cooperative, collaborative global and stability financial of perspective the from Both Randi Marjamaa, Nordea Norway Randi Norway Marjamaa, Nordea
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications away with cheques in 2011 is a case in point. acase is in 2011 cheques with away doing against backlash UK The irrelevant. presumed long channels and products end to struggling often channels, of range awide through customers service to expected were banks most banking smartphone of era the before Even over-simplification. an be in itself may businesses services financial naturally-complex often simplify to desire This reform. for need the ignoring of risks A challenge that was reflected by the variety of opinions opinions of variety the by reflected was that A challenge higher. even banks incumbent for bar the pushing are experience user aredefined of expectations with coupled usually fees, and prices lower transparency, pricing for demand consumer Increased firms. financial for complexity of layer additional an added has smartphone the of era the boom, internet first the counterpart, 2001 its like Much sector productivity has not improved since 2001. since improved not has productivity sector financial 2007, of bust big the and 1988 of bang big the between revenues growing despite that identified Wyman Oliver by –areport crisis financial the before apparent already was in banking lines business of simplification greater for need The success. their ensure to in order users engage to designed carefully been have that services digital for need the to contributing are screens smartphone of limitations the grown, has web mobile the of popularity the As dividend digital the Exploiting 5 4 3 to pre-crisis levels are to be achieved again. achieved be to are levels pre-crisis to returns if required is that overhaul organisational dramatic for need the account into taking not is this often Quite efficiency. cost for shareholders and boards from demand driving is customers financially-straitened and regulation increased rates, interest low of climate today's While acquisition. or merger aprevious from with inadequate legacy infrastructure, IT often inherited Frequently channels. and lines product multiple across and sectors, and demographics differing geographies, across customers varying widely serve to battle they as firms services financial stretched has this of All SIMPLICITY
Average returns from large firms are now on a par with utilities companies - having fallen from 20% in 2000 to 7% 2013. 7% to 2000 in 20% from fallen -having companies utilities with a par on now are firms large from returns Average Wyman Oliver www.dailymail.co.uk/news/article-2013953/Cheques-scrapped-2018-better-alternatives.html Source: 2015, Industrie Services Financial the of State The Complexity: Managing each channel, but it is essential toembrace aholistics view of all of them. internal operations. It is not enough just tocreate asolid for strategy It is up bank tothe tocreate aunified experience regardless of its 5 4
3 A decade later and the growth in fintech start-up activity is revealing the the revealing is activity start-up in fintech growth the and later Adecade 16 quickly than was possible even after the first internet wave. internet first the after even possible was than quickly more much players, regional or global become and markets, in new themselves establish to businesses services financial product single allowing is that opportunity An markets. European in 29 solution its selling is start-up banking a business Holvi, countries. in 11 available now is company technology POS mobile the in 2010, Founded delivery. services financial for platform universal global, anew, truly creating Is smartphones of adoption widespread that highlights also iZettle Sweden's of founder the with Discussion staff. asmall with customers athousand over service to able been already has company the Dubai, in central offices modest from Operating ago. years ten to compared percent 80 fallen has in 2015 business financial anew launching of cost the that estimates Beehive.ae start-up lending peer-to-peer online Dubai-based of executive chief and founder Moore, Craig dividend". "innovation an through profitably customers acquiring and serving of cost falling the of advantage take to placed –better entities product single -often entrants market new from compression margin of threat external an and organisations, financial large and banks among efficiency cost for demand internal An services. financial of delivery the reshaping currents competing twin the identified interviews from Insights report. this for research in the expressed
Randi Norway Marjamaa, Nordea
their product range. product their of simplicity in the lies age smartphone in the advantage ultimate their research the for interviewed start-ups the of many for innovation, of culture in-built their Beyond Streamlining product the range making decision internal of speed the at Frustration businesses. independent as or sponsor programme the with later business their commercialise to potential the with programme intensive an through founders start-up and putting entrepreneurs involves compliance. This corporate of bottleneck the without innovation of aculture foster and talent fintech of breadth the harness to seeking are firms the cases, Inboth this. of examples are programme MobileLife Bank's Dankse and accelerator fintech Nordea's organisation. the outside sit that 'hubs' incubation start-up or innovation dedicated creating –by initiatives change internal risky and costly without dividend innovation the leverage to –seeking innovation for model hybrid a choosing are institutions financial many In response, peers. start-up their of scale the on innovate to struggling been have crisis, financial the after particularly risk, to approach conservative more a and management internal of layers by encumbered typically organisations, Large dilemma. a commercial is it as institutions large for challenge acultural much as is delivery service and ranges product Simplifying within from Simplification cards," said Jacob de Geer, CEO and cofounder of iZettle. iZettle. of cofounder and Geer, de CEO Jacob said cards," accept to Sthlm Situation like organisations for possible it make to happy very We're out. miss will you cards accept don't you if but important still is Cash card. by pay to prefer here people most as society acashless to closer and closer getting is "Sweden iZettle. firm payments mobile from technology using payments card debit and credit accepting start vendors seen has payments electronic accept to homeless the for and by sold a magazine Issue, Big the of equivalent Swedish the of vendors enable to ascheme 2013, in Launched numbered. are coins and cash of days the that say to fair it's payments card taking start sellers street When Big -iZettle Issue The ' s story of easy acceptances story 17 cost than mainstream competitors. lower) much (often at pricing transparent with combined experience customer Abetter premise. commercial asimple with entities, product single are years recent of fintechs profile highest the of many above mentioned As business. the of side digital the on peers newer their with directly work to employees corporate senior forcing is company the this To achieve organisation." the of culture the change to seeking really you're where one, embedded an or organisation the outside labs innovation through innovation, to approach "asequestered calls, Wascha Mr what between was choice the Travelex, like afirm For in London. Travelex headquarters the at company development asoftware building by efforts digital company's the spearheading with tasked been has Moo.com, company printing online and Microsoft with previously officer, product chief company's the Wascha, Dave organisation. the within from culture innovation an build to is ago, years 40 around established business alarge Travelex, provider money travel of approach The through." jump to hoops fewer are –there sometimes sector digital the and in astart-up working of advantage the –that's team management and founder the of ear the having by driven "I'm commented, Fair Currency of Davidson Adam As innovation. of a culture building to obstacle akey as cited often and interviewees several by expressed was organisations larger with Source: ITProPortal
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications and various analytical tools that vary by channel. It is up to the the to up is It channel. by vary that tools analytical various and departments different the and scenes the behind integration the about care doesn't "aconsumer explains, Norway Nordea at banking of deputy Marjamaa, Randi As out. losing of fear for technology, new on based products issue competitors their when jump to compelled feel often Banks patchy. been far so has technology of use effective more through footprint retail their leveraging at record track their Although multichannel banks. for opportunity of awindow indicating channel preferred the overwhelmingly remains branch the else anything almost For payments. making and balances checking as such transactions simple for growing is channels social or mobile internet, for preference that shows customers banking of Research channels. digital for preference customer reflects partly start-ups fintech product single of proliferation The robustly. respond can banks which to something are experience user and design pricing, of in terms transparency and simplicity product for expectations consumer banks, multi-channel large for option arealistic be to unlikely is focus product single While possible. previously was than timeframe ashorter within regions and markets multiple across Increasingly share. towin market marketing message acompelling into this translate and innovation of cost low the of advantages the exploit to able are entrants new Squirrel, app planning financial or Fair Currency at exchange foreign of costs hidden the exposing and cost lower of acombination or WorldRemit, of case in the transaction the of cost absolute the lowering by Whether obvious. is strategy product mono-line the of attraction commercial The report. this for interviewed entrants market new the all of approach the was this Atom, bank retail new of exception possible the With 18 and the same for the executive team." team." executive the for same the and mailings digital through interaction continual ensuring and basis amonthly on customers BoI to talking we're research, customer regular undertaking "we're explains, innovation of head bank's the Tighe, David channels. traditional and digital of amix through customers with interact to best how understanding of ameans as research customer prioritised has Ireland of Bank out, lose or respond to need the and expectations shifting customer's its of aware Highly report. the for interviewed banks the all across reflected A realisation atune-up. for due is century, last the of much for unchanged largely model, banking the that acknowledgement explicit and however in attitudes ashift of signs show Europ Visa and Danske Nordea, Barclays, from initiatives Fintech non-professionals." for available more management asset and investments make and messages the simplify to We need area. savings in the knowledge limited or little have "customers this, of example an as industry investment and savings the cites Marjamaa Ms operations." internal its of regardless experience aunified create to bank Christoffer Hernæs, Sparebank 1Group Sparebank Hernæs, Christoffer Banks need to be relevant for the customersfor the in the right context. Products Products context. right will be fragmented. be will
substantially. landscape services financial the defining and in shaping role its changing is it followed has that revolution fintech the bare, laid was system financial the underpinned it which to extent the While in finance. trust of end the marked crisis financial global the measures, some By survey. aglobal to according industry, technology the for percent 78 to compared percent, 54 of score atrust with industries global trusted least the among is awhole as industry services financial The 2008. since further deteriorated has situation the Infact, success. much not with Apparently providers. services financial of begrudglingly, often and, everywhere regulators of focus central the been has of trust maintaining crisis, financial global the after decade In the From watchword to 'once' word FIGURE 5: INFLUENCERS ON PEOPLE ON 5: INFLUENCERS FIGURE TRUST 7 6 Stand out for the right reasons, PwC, 2014 PwC, reasons, right the for out Stand 2015 Barometer, Trust Edelman Jacob de Geer,Jacob iZettle democratise payments toanother level. system. card isthe amilestone This us for as it People are happy their totrust cards vendors the with because they trust 41% banks Retail Retail
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Source: PWC Report - How financial services lost its mojo - and how it can get it back it get can it how -and mojo its lost services financial - How Report PWC Source: 23% 19 there's nowhere else to go. go. to else nowhere there's because providers existing with stay to only choosing trust, restore to initiatives bank's their to apathetic largely are customers that revealed study same the damaging, than a third of consumers said they trust their bank. their trust they said consumers of athird than less showed UK in the customers banking of study A 2014 ' s taking our vision to managers 19% Fund Fund 25% 19% 14% Lawyers/ solicitors 35% 22% 19% 26% Financial advisers 30% 23% 6 7 21% More 21%
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications trust in financial services providers has changed, and not and changed, has providers services in financial trust of perception the that however understand to need Banks consumer distrust. behind influences main the as transparency pricing and experience ranked percent 70 nearly above, to referred consumers UK of study same repair. Inthe beyond not is it decade last the over damaged been have may in finance trust While can. they indicates research The connection the Re-establishing was. once it entry to barrier expensive the longer no is competitors non-bank upstart their and banks between differentiation of means primary the as trust on areliance that needed, if year. Proof, every doubling are service its for numbers customer and revenue says report, this for Fair, interviewed Currency broker currency online Irish launch. after years three just quarter every in payments billion $2 around processes already teenagers, American among popular Venmo, app payments P2P results. startling with often banks, for Worryingly banking. retail and management fund planning, financial to payments, to lending from marketplace the of corner every into break to entrants new of list along enabling cause, the furthered has then since world developed in the adoption smartphone of pace The infrastructure. banking of burden hefty the without cost, low at market new awhole creating century, the of start the at Kenya in M-Pesa of success the with understood first perhaps was bank, the of confines the beyond securely, and safely offered being services financial retail of threat The process. in the providers services financial bank new, non- to closed previously doors opening reputability, their increased also has life consumer of aspect every nearly into technologies digital of creeping now. The clear become to starting only are this of implications The incumbents. banking traditional than less percent 90 and 50 between fees charge to able suddenly entrants digital new by relief sharp into blinkingly brought been have that Perceptions pay. staff and pricing to products from operations banking of area every infected has industry a'sick' as services financial of perception The eyes. customer's in least At invisible. increasingly line that made have pricing opaque and breaches data scandals, mis-selling repeated side, one to crisis financial The managers. bank responsible thrifty, and sharks loan shifty between line dividing The business. areputable it made what of heart the at sat regulation, by up backed trust, implied inception, banking's Since creditPoor history 20 age group we're going after." going we're group age single no there's bank, service afull we're -because issue attitudinal an is it than demographics about less "actually is entrants new some for customers targeting notes, Bank Atom at Twiddy Edward As overseas. homes second with customers older are clients Fair's Currency of proportion Alarge customers. millennial generation next among just irrelevance. risk or soon action take to need Banks box). (see trust manufactures literally quite that process automated an with transactions financial in intermediaries human party third replace to ability its for attention attracting already is blockchain the based, is bitcoin which on technology The late. too be may them beneath shifts ground the as responding, before unfold to crisis financial next the for 'wait-and-see' of a strategy in adownturn, tested be to yet are here, interviewed those of any including entrants, fintech new of majority the While out. lose will customers or supervision, constant needing children, naughty like inherently are banks that view aprevailing sustaining is rules new of flow continuous the damagingly, More pressure. the on piling is scheme, guarantee switching account UK's the as such switching, account encourage to incitement regulatory and practices opening account of Scrutiny way. same the in quite side their on regulation is Nor Source: Digital Disruption in Nordic Retail Banking 2015 Banking Retail Nordic in Disruption Digital Source: Norway Sweden Finland
Denmark FIGURE 6: % OF CUSTOMERS WITH WITH 6: % CUSTOMERS OF FIGURE POSITIVE BANKING EXPERIENCE
29% 37% 39%
42% the traditional banking relationship is being taken. taken. being is relationship banking traditional the to threat the which with seriousness the signifies also globe the around programmes accelerator and labs incubators, sponsored high-finance and bank of proliferation The partnership. of importance the highlight to Techstars with in conjunction programme accelerator its launched Barclays follow. to starting are incumbents some going, -are them among Fidor Moven, -Atom, banks challenger new Where goals. financial meet them helps that product affordable an with incomes lower on customers targeting meant this app, Squirrel planning financial For communication. and pricing fairer transparent, to acommitment with hand in hand culture, company of overhaul a fundamental implies lines these along reputation atarnished Restoring Restoring lustre the Twiddy. Mr of words in the fashion," proof in abomb- and well it "build experiences, friction-free friendly, into services reliable secure, safe, packaging for astrategy with replaced is window-dressing that requires bank tomorrow's for trust customer regaining to key the means increasingly data financial and payment including life, personal of digitization the with comfort Consumer blockchain can be used in traditional finance." in traditional used be can blockchain how "explore to Barclays' with up partnered has exchange, bitcoin anonline operates which Safello, Sweden's And value. bitcoin of astore is which coin aphysical of launch the with realm digital the of out bitcoins taken has that in Finland Denarium include Examples economy. real the into moving also are start-ups bitcoin Nordic versa. vice and bitcoins into currency local their convert to bitcoin of traders for aplace as well as currency, local in their paid get and payments blockchain and bitcoin accept to merchants allows that aplatform is Denmark, from also Coinify, blockchain. the on transactions micro secure efficient, offering network apayment created has Strawpay start-up Danish start-ups. blockchain of anarray to home is region the Europe, of rest in the than higher is banks Nordic the in trust Although processes. banking in traditional intervention party third human, to alternative an automated as viewed increasingly is technology blockchain tarnished, severely system financial global in the trust With Minting Nordic the trust: blockchain been paying meticulous attention tocustomer and partner feedback toinform our product design, build our reputation and win in trust open the market. forward, includingforward, that operate those behind scenes. the We have Fintechs corner in marketplace of the every are pointing way the 21 customers' finances. finances. customers' their of custodians as reputation atrusted on building by dividend digital the from profit to opportunity of window a have now banks experience, customer the improve and openness, drive to channels digital affordable Using study. in one retailers as much as twice than more and networks social as much as times –three protection data customer of perceptions in industries other outperform consistently banks decade last the over reputations their to damage the Despite forged. or fought, are reputations which on battleground the increasingly is security data world, digital connected, everything- Inthe light. of chinks some are There advice." provide and trust build to needed are meetings physical and online truly becomes world the before time takes It physical. 90% and online 10% still is world the since meetings in physical believe "I remarked, iZettle of founder Nilsson, Magnus As high. remains banks in trust where fintechs, region Nordic way. Even, the showing are marketplace the of corner in every Fintechs Kim Humborstad, Zwipe Humborstad, Kim
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications internet availability. availability. internet wider and smartphones of adoption mass by enabled insight consumer to access easier and market to time quicker the of advantage taking are small and large Companies sheets. balance company constrained for particularly astrategy, such to benefits commercial clear are There place taking increasingly is services in financial innovation which to extent the identify report the for Interviews Build out: Innovating outside business the in'. 'buy and out' in', 'build 'build as here characterised providers, established among challenge innovation the addressing to approaches three with external developers. In particular, the research reveals collaboration on relies that innovation to approach open an Adopting peers. upstart their as much as organisations services financial large by heart to taken being is message this which to extent the reveal report in this interviews The used. are products the as generate they data the to responding and monitoring by them refining then and quickly more products new –launching Apple and Google like companies by inspired improvement, continuous of aprocess for expectation consumer by outstripped being fast is model this pace gathers revolution fintech the As market. the to released being before doors closed behind companies by rigorously tested and designed were products financial new innovation, of model aclosed by dominated Previously development. product and delivery service financial of understanding redrawing rapidly are technologies New age. digital in the relevance, continued and their innovation, to commitment their demonstrate to keen providers, mainstream and banks of aspiration expressed awidely also is it entrants, digital-only by posed threat competitive the of in asign interestingly, More report. this for interviewed start-ups fintech of group the of attribute adefining is agility and different, no are start-ups Fintech quickly. more demand customer match or respond to them allowing competitors, established to compared 'edge' their them gives what is bureaucracy corporate of layers by back held being without quickly decisions make to ability The nature. by agile are companies Start-up friends Flexible outside the confines of the bank. bank. the of confines the outside AGILITY 22 of the functionality of the full site." full the of functionality the of percent 80 around has and app transfer currency p2p first the was It site. friendly aphone on previously relied – we app first our launched We also payments. regular enabling by product our "improving included have platform trading currency foreign online Fair's Currency to improvements that explained Fair Currency of Davidson Adam accordingly. products their adapt and quickly more demand customer to respond to providers allowing built-in, flexibility of advantage added the have technologies Digital Source: CB Insights Disrupting FS Webinar FS Disrupting Insights CB Source: weeks in 12 banks for services and products identify and create start-ups helps Lab Innovation Fintech Accenture months. 18 is cycle sales A typical FIGURE 7: SPEEDING UP THE SALES CYCLE SALES THE UP 7: SPEEDING FIGURE months Source: CB Insights Disrupting FS Webinar FS Disrupting Insights CB Source: 15 years 15 Mobile phone: years 35 Refigerator: years 60 Electricity: HOUSEHOLDS TO HAVE TO HOUSEHOLDS US FOR ADOPTION OF 8: SPEED FIGURE 18 weeks 12 opportunities. [They need to] work on the hypotheses that that hypotheses the on to] work need [They opportunities. swan black for look and go the on tactical be to need [Banks] cool. are that things to loyalty There's zero. to close already is "loyalty this, on reflected also 1Group Sparebank of Hernæs Christoffer ago. adecade was it what quarter one to down now is product anew launch to needed time the that estimates Beehive of Moore Craig innovation. agile enabling of heart the at are technologies Digital becomes the norm. a digital product development team in its London head head London in its team development product a digital establishing involved this Travelex retailer money travel For within. from innovation to committed still but businesses their for innovation of importance the of aware companies Both Travelex. and in ACI characterised best was this report the for interviews play. Among to arole has still business, the inside from way, innovating middle of The Build in: Innovating inside business the a across companies acquiring actively been have Visa and MasterCard Express, American schemes, payment The this. of example one BBVA is Spain's by USA in the Simple bank start-up digital of acquisition The agility. innovational buy-in to seek and operations their re-tune they as institutions many for strategy the of part form will fit cultural or product right the with fintechs acquiring for astrategy continues, shake-out digital the as that admits Barclays of White Derek up. picking also is technology in investment recover, sheets balance company As in:Buy Acquiring agility online. sold already are globally products financial all of percent 40 over that estimates CapGemini Consultancy approach. right the is this suggests data Available taken. being is delivery banking of model traditional the to challenge the seriously how of proof is them, among programme Life Mobile Bank Danske and accelerator fintech Nordea’s funds, innovation and incubators in bank-sponsored growth The 8 Michael Leyva, CapGemini, quoted in Bank Technology, 2014 Technology, Bank in quoted CapGemini, Leyva, Michael 8 A trend that will continue as digital banking banking digital as continue will that Atrend Accelerator Programme) than to do it internally and cheaper to innovate this way (Barclays The reality is that it'sThe three times faster 23 areas outside Visa's specialism." Visa's outside areas the at better are that partners trusted use and understands it stuff the "building to stick should organisation the that realisation sudden the and moment" "aeureka presented provider external an with in partnership Citibank with card anew of launch the that explained Collab, Europe Visa of founder Perry, Steve capabilities. digital company's the improve and in future products Visa become could that ideas inspire help in to outsiders letting is Collab Europe Visa the and lowered been have barriers the secret, guarded aclosely were efforts innovation company's the once Where Europe. Visa at heart of change the by epitomised is innovation to in approaches shift cultural The acceleration programmes. 100-day their with emulate to trying are Europe Visa and Barclays both that quickly." Afeat execute and true are competitors when it comes to launching new products. products. new launching to comes it when competitors only digital over start ahead them affords footprint retail company's the ago, years forty over established was business the although says Wascha Mr in 2016. launch for set and trial on currently are that products three developed already has team the says Wascha Dave office. turf. home its on innovation rampant with up keep in to abid companies acquiring actively been also has ACI vendor technology payment US retail. in digital acquisitions focused consumer and Airbnb site rental home with apartnership including afield further moved has Express American and biometrics. authentication technologies, payment new to related acquisitions with focus core companies' their to close stayed have MasterCard and Visa Both fields. of range Derek White, BBVA White, Derek
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications integrated into ACI's existing products. Another is set to open open to set is Another products. existing ACI's into integrated be can they how understand and innovations new test to experiments it where US in the labs two has company The technology. in new invested year each million $200 approximately to translates which in R&D, annual its of percent 20 invests company the says Boucheron Mrs development. and research to commitment company's in the lies solution the Europe, manager general and president Saunier, vice Boucheron- Sylvie to According dilemma. the of aware fully is ACI company technology payment US acute. more even is current stay to disruption digital of age in the technology banking of vendors large for challenge The integration with the app from Verifone terminals means no means terminals Verifone from app the with integration direct company, the to According merchant. the by received being not payment the of risk the evading while down costs transaction keep to helping payments, route to intermediaries use to need the avoiding payments, account-to-account direct on based is app Swipp The merchants. Danish Verifone's at phones mobile their on goods for pay to app Swipp the with Danes 800,000 over allow will which app payment mobile aDanish Swipp, with in collaboration working now is and in Denmark, payments contactless increase to Bank Danske with partnership in working been recently has Verifone elsewhere. and here, succeed to bid company's the of cornerstone the is products or solutions new design to providers technology and clients with in partnership Working countries. in Nordic originate now in Europe transactions company's the all of half than more percent, 65 and 30 between varies penetration merchant While region. the across footprint astrong has already Verifone age. digital in the succeed them help to innovation for capacity region's Nordic the exploiting is and this overcome to keen been has Verifone provider terminal POS iZettle, like start-ups fintech of incursion the with intensified has marketplace sale of point regional in the competition As innovation. supports, than rather stifles, that culture corporate and lines business processes, legacy with saddled Often providers. technology financial pre-digital the for ahurdle also is innovation of speed banks, universal by faced challenges the to Similar itSwipp out: Disruption at point the of sale 24 differentiation and play an essential role in their success. success. in their role essential an play and differentiation greater enable will innovation agile for astrategy banks established and entrants new both for that is however certain More results. best the deliver will strategy which tell to early too is it that underline report in the interviews The model. business the and delivery service culture, company for implications far-reaching With challenges. specific own their with come each technology, buying-in by or externally, internally, innovating between choice The landscape. regulatory changing the to better adapt to ACI enabling to geared a move Africa, and East Middle the Europe, across demand growing accommodate to in Ireland in 2016 incubation for new ideas and insight into early trends." early into insight and ideas new for incubation ideal provides which experimentation, to open workforce savvy technically educated, ahighly has Scandinavia way. in innovative an problems their solve to solutions akind' of 'first implement and design to partners with working increasingly are "We era. digital in the retailing of headache the address retailers help that services payment to terminals payment making from business the of focus the move to initiative an of part all are ventures these says Felix June president European company's The online. or in store made was payment the whether transactions, previous on based customer the recognise to retailers allows that provider technology aloyalty Bember, with service anew introduced has company the In Norway, adoption. to barrier the lower should and devices additional for need the avoids costs, project Source: verifone.dk Source: Cancellation of initiated online purchases (%) initiated of online purchases Cancellation 9: FIGURE of athird around that revealing research consumer While in 2014. switching account through customers amillion of aquarter lost banks largest four UK's the that shows banks, change to holders account for easier it make to designed UK, in the service switching account bank the of launch since year full first the from Data fickle. even fluid, more become has customer and holder account between relationship the that meant has providers online-only with comfort consumer growing and banks, large for respect reduced by compounded choice, consumer improve to designed regulations New entirely. it disintegrate to helping be to appears boom internet mobile the measures some by products, banking between comparison price direct enabling by customers, their on companies services financial of grip the loosened partially wave internet first the If remained unchanged. largely markets advanced most across landscape banking the that meant transactions banking of cost real in the transparency limited and climate, regulatory a favourable marketplace, banking the entering of cost high the by aided premium,' 'relationship lucrative This online. recently, more and, phone the then branch, the through first customers its with bond astrong maintain to ability placed uniquely its on itself prided industry banking the decades, For 9
RELATIONSHIP Atmia Loyalty Lens, April 2015 April Lens, Loyalty Atmia Denmark Sweden Norway E-PAYMENTS MID-WAY E-PAYMENTS WHY SCANDINAVIANS ABANDON 36% 37% 38%
25
BEING AS SEEN ARE DISRUPTORS WHY 10: FIGURE Innovative offering Innovative organisational complexity and improve profitability. profitability. improve and complexity organisational manage to technology of use greater making as time same the at experience, user easier an with coupled costs, and benefits in product transparency greater through simpler lives consumer Making relationships. banking redefine to struggle they as services banking of providers confronting challenge dual the revealed research the In particular, world. virtual in the customers their to relate to ways new for search banks' accelerated and delivery services financial of expectations consumer shifted has Apple, and Google like companies technology of success the with coupled storm', perfect 'the pyramid, income the of top the at customers some for hold still might bank their with relationship adirect of concept the While 10). figure (see successful are innovators fintech feel banks Nordic why illustrates use channel on data latest the strategy. their of heart the at mobile with engagement, and interaction customer of means traditional redraw to opportunity the recognising are entrants fintech new world, the around banks with satisfaction customer declining of abackdrop Against the main influences to switching bank accounts. bank switching to influences main the of one as rewards promotional by enticed were customers Faster execution Faster Convenience Aggregation Low Price Low SUCCESSFUL BY NORDIC BANKS BY NORDIC SUCCESSFUL Brand 17% 22% 33% 33% 33% 9
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Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications of banking consumers across nine developed and developed nine across consumers banking of survey industry One uneven. is this in achieving industry banking mainstream the of record the and advisors new revenue streams. Consumers are looking for trusted adding or existing preserving for opportunities be also may There costs. operational cut to technology using than more about is relationship retail the Redefining strong. holds branches of use and preference customer growing, is use channel digital away. While go to likely not is complexity This in 2013. 60 over to in 1993 10 from grew UK in the banks largest 20 the by offered products mortgage of number average the 2013, to years 20 in the example, an As customers. with relationship their streamline to seek they as them of ahead challenge the of scale the to adding is range product acomplex banks, mainstream For surplus. or in debit is account an whether indicate to system light atraffic using by better accounts their manage customers helps app banking retail Moven The years. fifty last the of generation literate financially least the are consumers millennial that reckons King Brett founder bank's The US. in the Moven by taken approach an also is engagement improve and use product drive to gaming Using strategy. hiring in its industries digital from others alongside expertise banking retail with staff combined Fair, intentionally has Currency like Atom, technologies digital other and gaming banking, between lines of blurring the of asign In in 2016. launches it when management account bank into features game-like introduce will bank the says Twiddy Mr gaming online from inspiration Taking revenue streams we wanted." and components the together put -we've new brand it's that is thing important [us] most -the differentiate does -which bank afull being and digital and direct being with do to everything "beyond explained, Atom, challenger-bank digital UK at officer innovation Twiddy, chief Edward As in Norway. We will continue using branches the for counselling primarily on major life events like pension and house lending. It is more complex than reducing our branches to 30 from 55 26 10 FIS Consumer Banking PACE Index, 2015 Index, PACE Banking Consumer FIS 10 finances. their of in control stay customers helping including areas of arange across expectations service meet to failed banks that felt percent 77 that showed markets, emerging opportunity to miss." to opportunity an good too just is it of back the on example for products financial target to able be then and data customer underlying the of sight have to opportunity –the Apple and Microsoft Google, Facebook, of likes the for space ideal an is this transaction… the of point the from removed further getting are they funds, bank central access to and gateway payment the as needed are banks "[while] aggregators, payment non-bank new to market the opens it as customer and bank between distance the stretch will PSD2 of form in the regulation industry payment new out points Cloud Currency of Todd Latham As out. losing risk they or soon enter to need they arace is It process. in the divisions siloed between walls the down breaking data, customer on based refinement service and product continuous of processes introduce to architecture technical the need banks Apple, and Google of success the Copying customers. their on insight greater deliver and efficiency improve to technology use to ability banks' on hinges premium relationship the rediscovering fintechs, new the from alesson Taking lending." house and pension like events life major on primarily counselling for branches the using continue We will in Norway. 30 to 55 from branches our reducing than complex more is "It Bank, Danske at Trond by Mellingsæter shared Aview interaction." personal the of value the on apremium place will customers some -and advice getting from guidance, in taking comfort take we consumers] [As themselves. doing comfortable not are people things Some glass. ashared about -are principles design [product] "our institution, alarge for means opportunity this what recognises BBVA, of White Derek 10
Trond Mellingsæter, Bank Danske and geographic reach – e.g. from wealth management management wealth from –e.g. reach geographic and offerings of in terms both products, and services financial its improve and expand to innovators and partners with working is key "the notes Ireland of Bank of Tighe David As this. of examples are programme Accelerator Barclays' the –and entrepreneurs and start-ups including partners, other with collaboration to doors the – opening development product to approach innovation open new Europe's Visa scheme Payment report. the for interviewed institutions financial large the across this of recognition Specifically, the research revealed the breadth of we suspect considerable opportunities." but uses about talk to early too still it's and first research the conduct to important "it's remarked, Tighe David As management. bank internal streamline to blockchain the of opportunity the exploring banks many of one is Ireland of Bank documentation. storing and ledgers bank managing including processes, office back improve to blockchain use to potential of investigation Industry-wide events. fintech and co-working start-ups, for allocated space with there team innovation its based also has bank The staff. branch from advice with supported are devices cashless Dublin in central branch apilot At branches. company's the of in some appetite digital growing customers' reflect to been also has approach Ireland's of Bank type. customer- anew for entry of point another yet as Facebook or Twitter adding than nuanced more is success to key The products." new services, events, promote to BoI by used also and bank the with engage and support request bank, the contact to customers our by extensively used being are media "social era digital the for repositioning bank's the to pivotal as sees Ireland of Bank that Something service. customer robust by up backed interaction digital of combination and strategy right the with engagement customer improve to ability the is channels digital of advantage The Using engagement to improve relationship the by out carried already now are detection fraud and assessment in credit advances automation, Leveraging technology. using at successful more been have banks products and channels multiple from streams data of sense make and integrate to how understand to trying While 27 decade. decade. next the for relationships banking shape will that platform the create to market the to up It's like. look should banking of model new the what know don't -and want they what know don't customers Jobs, Steve of echo Inan providers. incumbent as well as entrants new and start-ups for Both open. wide still is however it redefine to opportunity The develop. to likely is relationship banking retail the how of aglimpse offer they products, use to easier and advice and information relevant timely, providing experience, user on emphasis greater placing By customer. the on focussing by relationships banking transforming already are US in the Simple, and Moven and UK, in the Bank Atom like Companies growth." new for potential provide that areas other and funding) (crowd lending to insurance to strategies for money transfers and account management. account and transfers money for customers bank's the of percent 10 by used now is claims bank the which branch banking aFacebook launched has and loans for apply to consumers allow to Twitter uses Bank Deniz bank Turkish consumers. by favoured channels new the to ranges product their in adapting progress made also have markets in emerging banks Some computers. Built innovation for - Danske Bank geared for the digital age digital the for geared Bank - Danske
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications challenge for multichannel financial services organisations organisations services financial multichannel for challenge the report, this for interviewed those including start-ups, fintech most to naturally comes transparency While offer their customers. they value the articulating by internet the on comparison price direct of business their to threat the to respond to failed have banks time same the At advice. financial in trusted adeficit creating communications, in bank trust consumer eroded have scandal of waves successive mainstream providers has deteriorated further as for scenario the since, ahalf and decade In the transformation of transparency from doctrine regulatory to commercial priority. the accelerating competition, non-bank to doors the open thrown have since years in the untrustworthy deemed system wave. interent first in the sites comparison price of launch the with apparent made first was organisations services financial retail for proposition avalue as transparency of concept The transparent Visibly Source: PWC Report - How financial services lost its mojo - and how it can get it back it get can it how -and mojo its lost services financial -How Report PWC Source: FIGURE 11: CONSUMER 11: FIGURE TRANSPARENCY than today, perspective from aregulatory so what Iunderstandwhat is things will improve if and blockchain when is implemented. more transparent, and stronger and transparent, more stronger The auditThe trail will much be so 16% ' S MAIN CONCERNS S MAIN Erik Zingmark, Nordea Zingmark, Erik 23% 23% 25% 29% 30% 31% 37%
28 The institution going bankrupt going institution The ethics business's The information personal my of Security details account my of Security party third to sold being details personal My money my with investments daily making institution The fees unfair with Overcharging savings my on return apoor Getting use just as they can with unbundled digital competitors. competitors. digital unbundled with can they as just use or want they what for only pay to able Being rigidity. less expect increasingly and at, arrived is pricing the how know to want they that pay, just won't customers that not It's lesson. avaluable provide accounts current their for fees reintroduce to markets in some banks by attempts Failed 11). Figure (see now until up for banks their paying been they've exactly what to as perplexed consumers of proportion significant a leaving competitors, mainstream of that tenth one as low as services offer here, Fair, interviewed Currency and Cloud Currency WorldRemit, in banking. trust of loss the to further contributed probably has finance digital of advance Paradoxically, increased transparency enabled by the irrelevance. to organisations consigning of risk the runs 'doing digital' like much transparency' 'Doing them. with it leave to decide they when it with doing is institution the what of visibility greater much and money their to happens what over control greater want Consumers pricing. and development product communications, to style management from business the of area every infects impact Its complex. more is E ver M ore connected consumers and a financial afinancial and consumers connected ore the foundation on which to build longer-term relationships relationships longer-term build to which on foundation the setting and customers new of stream avaluable Creating incentives. and promotions through holders account student new in attracting successful were banks UK era pre-digital Inthe here. record atrack have do banks Retail organisation. the to benefit commercial immediate no offer that information or advice services, providing involve may this business digital of vocabulary Inthe trust. will they that in amanner customers their offer providers value the explain to effort organisational across- require will this Achieving age. digital in the bank retail the rebuilding to key the is communications in their confidence customer Re-installing alone. on price directly compete to unable are they mean entrants digital new to compared costs higher banks' time, same the At impartial. is bank their from receive they information the believe to likely not are consumers dismissed, be to likely are initiatives these report, in this elsewhere indicated As enough. be not may this indicates research implement, to transparency and disclosure are relatively straightforward institutional greater to attention drawing communications While in abind. caught are organisations financial Complex competition through See 29 competitive. competitive. remain to respond, to need will institutions local which to Amove around. shop to consumers encouraging are bodies consumer and regulators how of example one is in Norway Finansportalen of launch The region Nordic Inthe transparency. price with allied responsibility, and fairness prioritises that services financial of model new the of illustration clearest the provide services payment New companies offering remittance and international approach. asimilar planning is in 2016, launches it when Bank, Atom intuitive. spending their controlling make and customers engage to gaming from cues its takes that interface an uses app Moven –the in decades generation consumers are the least financially knowledgeable generation millennial that reckons Moven, of founder King, Brett finances. their manage customers helping by deficit advice the fill help to seeking are US, in the Moven and UK, in the Squirrel and Bank Atom like challengers Digital engaged. them keeps that experience auser and communications responsible honest, underpinning with this zeal, acquisitive their rediscover to need providers age digital Inthe future. the of customers affluent the with
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications services brands will likely remain important guarantors guarantors important remain likely will brands services financial while underlines, Collab Europe Visa of Perry Steve As happening. already is this places In some financial the marketplace. of areas all across participation wider encourage pursued, automated by intervention human replacing mean increasingly will transactions in financial transparency of aculture cementing trust, on section in the discussed As Transparent point to the of invisibility gap. advice the close and customer, and bank between bond the rebuild help could intelligently, used if insight, customer tap to potential enormous The view. customer single the of grail' 'holy the enable finally would products, multiple across often activity, customer's their from streams data the combine to platforms technology in new investment continues, shake-out digital the as open wide still opportunity of window the With known. well is industry music the which for offers free and gimmicks game-like or reductions price short-term through entrants new imitating about just not is again them believe to customers get to banks For cost." true the masking at good quite are banks transfers, free advertise and offer might providers some although so there, out disinformation of alot quite "[there's] notes, Fair Currency of Davidson Adam As determine. to customer the for hard be might transfers international of cost real the where banks mainstream to contrast A sharp country. adeveloped to sending as much as times ahalf and two cost can Africa sub-Saharan to money sending cases Insome funds. the of destination the on dependent hike price or mark-up hidden no With ownership of an asset is one such example that could, if could, that example such one is asset an of ownership prove to blockchain using of concept The processes. 11 World Bank, Send Money to Africa Report Africa to Money Send Bank, World quality, financial low-cost in away that is services completely transparent we strongly believe that mobile the phone is fundamental to delivering longer prepared and to pay they as basic see for what services Business models have had to change because people are no 11 30 and risk reduction. reduction. risk and competitionincreasing and transparency, standardisation innovation, stimulating at aimed initiatives industry and regulatory key 29 names 2015 Report Payments World The follow. to forced be may industry banking the rides, taxi 'friction-free' easy, to trail the blazes Uber Where customer. the to invisible is that one be will in future experience payment best the industry, PC the of principle Inside' 'Intel the as way same the in much security, transactional of short term internal targets. meet to products selling beyond goes that advice impartial providing to commitment asustained with coupled be will this whether is established be to yet is What this. of examples are innovation to approach secretive aless and branches bank re-position to Initiatives efforts. strident making and customers their with re-connect to need the of Interviews for this research reveal banks are highly aware world. developed the for here lessons valuable some offers Africa across money mobile of growth The marketplace. overall the of size the increasing customers in new draw help likely and usage drive will services banking of use of ease to make will it contribution the regions, across and industry the across out plays trend this As technologies. between integration easier enabling while update, and evolution future enable to aback-door with designed being increasingly is technology product financial and bank that is innovation of era collaborative the of advantage clear One imagined. be might than fear to need less have Banks Alix Murphy,Alix Remit World transfers traditionally associated with high fees, the long long the fees, high with associated traditionally transfers money international and trading exchange foreign of areas in the visible particularly been has change In 2015 potential. their into tap fully consumers and merchants banks, once like look will future the what show that trends some witnessing already are we and emerged finally have technology' 'emerging calls industry the what of Many technologies Disrupting regulations. new design regulators when focus important an become has and consumer the for experiences payment initiatives have resulted in more transparent and improved the wallets, mobile as such objective, primary the is innovation where cases in many that states It momentum. genuine gaining is area this and innovation payment support indirectly or directly either initiatives industry and regulatory key of percent 50 than more that shows report The disruption. for ripe more be not could practices traditional figures, published recently to according and, transparency of issue the lies business WorldRemit's to Fundamental fraud. of incidence the reduce to trail audit adigital and payees of authentication robust transactions, anonymous and cash of areduction include online remittances moving of benefits the In addition, cost. reduced vastly at and instantaneously service this deliver to vows that astart-up WorldRemit, established Ismail In 2010 itpersonally. tackle to him for enough painful was experience the In fact, country. in another someone to through money get to it takes time the and fees high of issue fundamental the facing others of millions for itis as experience a frustrating been has Somaliland to home money sending Ahmed, Ismail student, School Business London former For WorldRemit born out of personal experience 31 between 6.3 percent and 10.5 percent. 10.5 and percent 6.3 between at estimates 2015 Report Payments World the which market', payments 'hidden the as known money, otherwise mobile and wallets digital applications, cards/mobile loop closed through technology mobile is enabler big The commissions. agent as such costs hidden and payee the reach to money for takes it time experiences. user enhanced and environment, payments price transparency, faster transaction times, a safer greater promise payments immediate consumer, the For products. of security and features/options, pricing, the influence also will payments Such providers. service payment of reporting and processing, origination, on impact awide have will payments immediate that believe report the of Writers Alix Murphy, senior mobile analyst at WorldRemit. at analyst mobile senior Murphy, Alix argues transparent," completely is that in away services financial low-cost quality, delivering to fundamental is phone mobile the that believe strongly we and services basic as see they what for pay to prepared longer no are people because change to had have models "Business • • (Source: Africa Progress Panel Report) Report) Panel Progress Africa (Source: year. each billion $2 as much as Africans cost transfers money that estimates Bank World The Report) Africa to Money Send Bank World (Source: fraud. and laundering money combat to inflated being –fees amount transaction the of percent 12-20 as much as cost can however, Africa, in sub-Saharan countries to money send To atransaction. of 7-8 percent up makes cost the markets In developed settled. not still is internationally money transferring of cost The
Copyright 2015 MagnaCarta Communications Copyright 2015 MagnaCarta Communications INTERVIEWEES Trond F.Trond Mellingsæter, Country Manager Norway Manager Country Trond Lemberg, DANSKE BANK PROTECTORIA CEO Protectoria of Financial Services at Telenor at Services Financial of Tine Wollebekk, President, Europe, Verifone Europe, President, CLOUD SOLUTIONS CEO Cloud Solutions Cloud CEO Axel Sjøstedt, Sjøstedt, Axel Marius Olsen SCHIBSTED VERIFONE June Felix, June Felix, TELENOR
SVP Head SVP 32 President SpareBank 1Group SpareBank President Christoffer Hernæs, Hernæs, Christoffer Magnus CW Nilsson, Nilsson, CW Magnus Odd Erling Håberget, MD, BankID Norge BankID MD, SPAREBANK Founder iZettle Founder Bjørn Søland Bjørn i PROMON BANKID ZETTLE Vice Vice Randi Marjama, Marjama, Randi of Banking at Nordea Norway VISA EUROPE COLLAB COLLAB EUROPE VISA Kim Humborstad, Visa Europe Collab Visa Ingun Berget Steve Perry, NORDEA CEO Zwipe CEO BRIGHT ZWIPE Deputy Head Head Deputy
NOTES Report Authors Imprint
Simon Hardie Published Febuary 2016 +44 (0) 7782 197 608 Copyright 2016 MagnaCarta Communications [email protected] Infographics & Layout by Graphiques Aspique Denise Gee [email protected] +44 (0) 7793 768 109 [email protected] www.magnacartacomms.com Let´s do startup investing together!
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