When you think about countries leading the way in fintech you might not immediately think of Sweden. The thing is, if you didn’t, you’d be missing a trick. Sweden has emerged over recent years as a hotbed for fintech innovation. But why is this? What is it about the market in Sweden that has put it at the forefront of fintech developments worldwide?
A cashless society
In the UK, we complain about every small bank branch that faces closure. However, in Sweden they have embraced the move towards a cashless society and it’s actually predicted that Sweden might become the world’s first completely cashless country.
The transition is being helped by the widespread use of mobile payment apps that allow people to transfer money instantly using their smartphones. As a result, traditional banks and payment methods are slowly becoming obsolete.
Sustainable investment
Sweden’s fintech revolution is supported by companies like Incore Invest, who recognise the unique position of Sweden and the potential for fintech companies to do well. Incore Invest already has investments in companies like Mynt, a Swedish fintech that simplifies business expenses and accounting, and they’re keen to invest in more.
Incore Invest’s founder Nicolai Chamizo, who grew up in Sweden, has spoken widely about his goals and has said that his ambition is to build the next Swedish fintech unicorn.
Open banking
Open banking allows different institutions to share financial data and makes fintech solutions much easier to develop and implement. While some countries have been resistant to open banking, Sweden has been an early adopter and Swedish regulators are keen to do what they can to promote innovation and competition in the financial sector.
It’s only with a well-regulated but well-supported nationwide open banking system that fintech solutions and platforms can thrive.
Blockchain and cryptocurrency
Sweden is also making strides in blockchain and cryptocurrency technology. Blockchain, with its transparent and tamper-proof ledger, has the potential to revolutionise financial services, from cross-border payments to smart contracts. Startups like ChromaWay and Coinify are at the forefront of these innovations, exploring the applications of blockchain technology in the Swedish financial sector.
Robo-advisors
Robo-advisors have gained significant traction in Sweden, offering automated and algorithm-based investment services. Companies like BetterWealth and Lysa are disrupting the traditional wealth management industry by providing cost-effective, data-driven investment strategies. Robo-advisors are making it easier for Swedes to invest their money in a diversified and efficient manner.
Financial inclusion
Sweden’s fintech sector is also working towards greater financial inclusion. Companies like Tink and Klarna are enabling easier access to financial services and credit for underserved populations, including young adults and those with thin credit histories.
Collaboration and innovation
While in some countries fintech businesses exist in a competitive, secretive environment, the industry couldn’t be more different in Sweden. One of the hallmarks of the Swedish fintech scene is the spirit of collaboration and innovation, as businesses recognise that the only way to succeed is to share knowledge and support each other.
A great example of this is how well the old and new work together. Startups often collaborate with traditional financial institutions, harnessing their expertise and infrastructure while providing fresh perspectives and agile solutions.
The combination of a tech-savvy population, a robust financial ecosystem and a supportive regulatory environment has made Sweden a fertile ground for fintech developments and those developments don’t look set to stop any time soon.
What is much more likely is that Sweden will serve as a model for other countries, showing what’s achievable with the right attitude, government support and independent investment. Keep an eye on Swedish fintech over the next few years and you should see very exciting things.