Copenhagen Fintech connects Nordic fintech expertise to the wider global finance and technology sector to ensure that Nordic startups are among the best connected in the world.
The start-up incubator and accelerator was established in September 2016 by the Financial Services Union Denmark, Copenhagen municipality and the Danish banking association.
Today, with financial support from the Danish government as well as financial services companies in the Nordics and beyond, it links the Nordic technology sector to the global fintech ecosystem.
Copenhagen Fintech is establishing connections with global organizations, which poses the biggest challenge for Nordic fintech, according to Thomas Krogh Jensen, who became the unit’s first CEO soon after its launch in 2016. He said the founders realized they could never become the biggest fintech . ecosystem, but due to the attractiveness of Nordic technological innovation, it can 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 realized early on that we could never be the largest ecosystem, but we could aim to be one of the most connected ecosystems in the world.”
There are usually between 35 and 40 startups that use their physical space in Copenhagen. Since it started, between 150 and 170 companies have taken part. It also has over 300 throughout Denmark and 1,000 in the Nordics.
Blockchain data platform provider Chainalysys is one of the 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 headquartered in the US. It has worked with the FBI and CIA and other intelligence agencies and banks to investigate cryptocurrency abuse and help uncover global criminal rings.”
Krogh Jensen pointed out that the Nordic region has great advantages for fintech. “The infrastructure that has been 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 happens in financial services.”
The Nordic region also ranks highly when it comes to innovation, he added. “For example, when Mastercard and Visa wanted to buy open banking platforms, they bought in the Nordics.” Mastercard took over Denmark-based open banking fintech Aiia last year, on the heels of Visa’s €1.8 billion acquisition of Swedish open bank fintech Tink in June.
But global networking is the challenge. “If you’re a startup in London, you benefit from having access to capital and lots 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 international banks on your doorstep. We need to build that network for them to help them scale.”
This process is aided by the region’s reputation in technology, he added. “Quite a few organizations want a part of the Nordic ecosystem, and we find it quite easy to collaborate with large financial institutions and governments around the world.”
For this purpose, Copenhagen Fintech has entered into a partnership with Mastercard. “You can get partnerships in the Nordics to start, but there are no Nordic-based global financial institutions and technology companies,” said Krogh Jensen.
Rune Mai, senior vice president of Mastercard and co-founder of Aiia, said: “Copenhagen Fintech is a vibrant innovation center that not only creates successful startups, but has become a center for technology and innovation that activates and inspires everyone in the fintech ecosystem. In the new As Mastercard, we now have the opportunity to help new fintechs take Nordic innovation in financial services even further in close collaboration.”
Krogh Jensen has 30 years’ experience in banking and financial services, and has worked with asset management in large banks, including Nordea and Danske Bank, as well as business consultancy.
“I understand both the old 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 digitization for a while, I understand the role of technology in finance and the changing business models.”