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Copenhagen Fintech is connecting Nordic fintech expertise to the wider global finance and technology sectors to ensure Nordic startups are among the best connected in the world.
The startup incubator and accelerator was established in September 2016 by the Financial Services Union Denmark, the City of Copenhagen and the Danish Bankers Association.
Today, with financial backing from the Danish government as well as financial services companies in the Nordics and beyond, it is linking the Nordic tech sector to the global fintech ecosystem.
Copenhagen Fintech is establishing links with global organisations, which presents the biggest challenge for Nordic fintechs, according to Thomas Krogh Jensen, who became the entity’s first CEO soon after its launch in 2016. He said the founding members realised they could never be the biggest fintech ecosystem, but because of the attractiveness of Nordic tech innovation, it could make connections with the rest of the world.
Copenhagen Fintech wants to bring these relationships to its startups, said Krogh Jensen. “We are Copenhagen-based but with a Nordic focus, and we are building a global network. We realised early on that we could never be the biggest ecosystem, but we could aim to be one of the most connected ecosystems in the world.”
There are usually between 35 and 40 startups using its physical space in Copenhagen. Since it started, between 150 and 170 companies have been part of it. It also has over 300 across wider Denmark and 1,000 in the Nordic region.
Blockchain data platform provider Chainalysys is one of its success stories. “It was founded in Denmark before we started, but was one of our first residents,” said Krogh Jensen. “It now has over 900 people with headquarters in the US. It has worked with the FBI and CIA and other intelligence agencies and banks to investigate the misuse of cryptocurrency and help unravel global criminal rings.”
Krogh Jensen pointed out that the Nordic region has huge advantages for fintechs. “The infrastructure built up over a number of years between the Nordic countries has created a region that is among the most digital,” he said. “The Nordic countries are now quite far ahead and this infrastructure benefits what is going on in financial services.”
The Nordic region also ranks high in terms of innovation, he added. “For example, when Mastercard and Visa wanted to acquire open banking platforms, they bought in the Nordics.” Mastercard took over Denmark-based open banking fintech Aiia last year, hot on the heels of Visa’s €1.8bn acquisition of Sweden’s open banking fintech Tink in June.
But global networking is the challenge. “If you are startup in London, you benefit from having access to capital and loads of potential partners,” said Krogh Jensen. “If you are based in Copenhagen and the Nordics in general, you lack access to capital and you also lack having international banks on your doorstep. We need to build that network for them to help them scale.”
This process is helped by the region’s reputation in technology, he added. “Quite a lot of organisations want a piece of the Nordic ecosystem and we find it quite easy to engage with big financial institutions and governments around the world.”
To this end, Copenhagen Fintech has agreed a partnership with Mastercard. “You can get partnerships in the Nordics to start, but there aren’t any Nordic-based global financial institutions and tech companies,” said Krogh Jensen.
Rune Mai, senior vice-president at Mastercard and co-founder of Aiia, said: “Copenhagen Fintech is a vibrant innovation hub that not only creates successful startups, but has become a centre for technology and innovation that activates and inspires everyone in the fintech ecosystem. In the new capacity as Mastercard, we now have the opportunity to help new fintechs take Nordic financial services innovation even further in close collaboration.”
Krogh Jensen has 30 years’ experience in banking and financial services, working in asset management at large banks, including Nordea and Danske Bank, as well as business consultancies.
“I understand both the legacy side, with the big financial institutions and their decision-making process, as well as the technology stack and I have a network in the industry,” he said. “Since I have been in digitisation for some time, I understand the role of technology in finance and the changing business models.”