Look North: Nordic fintech focuses on financial inclusion

Look North: Nordic fintech focuses on financial inclusion

Close to 30 Nordic fintechs are joining the 2019 Financial Inclusion Summit in Oslo this March. Among other issues, this summit will ask how the Nordic region’s fintech strength might benefit unbanked and under-served populations in developing economies.


Success Breeds Success

Modesty to one side, it’s clear Nordic countries have been world leaders in many innovative financial technologies. Nordic high-value start-ups are worth more ($6.3 billion) than the rest of Europe’s put together ($5 billion). The Nordics have led the world in cashless payments, online credit scoring technologies, and other innovations. This geographic region also gave birth to world-leading fintechs like Klarna, iZettle and TransferWise.


Technologies like these have a special role in developing economies. As is broadly appreciated, connecting unbanked people to the formal economy enables them with new economic opportunities. It improves the entire economy of a country by enabling farmers to get their produce to market, and small businesses to get paid and order goods. More sophisticated financial technologies also speed up the rate at which money flows and enable availability of new services such as credit scoring, micro-lending, and micro-insurance.


Perhaps less well-known is the speed at which digital finance can proliferate in a developing economy. The growth of bank branches and paper communications took decades in Europe and North America. However, AntPay in China shows how rapidly new financial technologies can be adopted: late last year, the company announced user numbers had grown more than 40% in a year, with one in seven Chinese citizens now using the social media payments service. Because digital services don’t require physical branch infrastructure, deployment occurs more rapidly in today’s economy than was previously.


Transformative Speed

For developing markets, there’s a connection between rapid growth in today’s fintech ecosystem and the growth of mobile phone technologies in the early years of this century. Unencumbered by existing fixed-line mobile telephony, cellular communications took off in Asia and sub-Saharan Africa between 2000 and 2010, with growth in mobile phone usage for these markets outstripping that of mature economies for a decade.


Now those very same mobile networks look set to play a major role in the development of new financial technologies for emerging markets. This means Nordic companies using the internet or mobile phones as delivery media have significant opportunities in emerging economies, from providers of remittance technologies, e-wallets and insurance providers through to micro-lenders, biometric ID firms and underwriting services. All of these sectors, and more, will be represented at the summit, and we welcome colleagues who would like to join us.

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