In the picturesque landscapes of the Nordic region, a compelling story travels. It’s not just about the serene fjords, the enchanting Northern Lights, or the legacy of the Vikings. It’s about fintech, the financial technology industry that the Nordic countries pride themselves on.
And for a good reason: this small region has made a big splash on the global fintech scene. With robust economies, tech-savvy populations, and a supportive governmental framework, the region has become a fertile ground for fintech innovations and exports.
At least, that’s how we like to think.
To address the prevailing narrative about the Nordic region, we discussed with Sopnendu Mohanty, Chief FinTech Officer of the Monetary Authority of Singapore, presenting four theories for discussion.
- Hypothesis 1: The Nordics stand as one of the most digitally advanced regions globally, providing us with a distinctive competitive edge, particularly in fintech.
- Hypothesis 2: The Nordics rank among the world’s most sustainable nations, a quality reflected in the developed fintech solutions.
- Hypothesis 3: The Nordic countries are among the world’s most innovative nations, and the size of our domestic markets enables us to think globally from an early stage.
- Hypothesis 4: The Nordics are globally recognized as hubs of innovation, and the size of our local markets gives us the insight to consider global expansion from the beginning.
Mohanty has over 20 years of experience in technology and finance across both public and private sectors. He’s instrumental in launching initiatives like Proxtera, PayNow, Project Ubin, API Exchange (APIX) and the Singapore FinTech Festival while advising global bodies on Fintech and Inclusion.
Thomas Krogh Jensen (TKJ): Is it accurate to say that the Nordics are among the most digitally advanced regions worldwide, and does this confer a distinctive competitive advantage to us, especially in the fintech sector?
Sopnendu Mohanty (SM): “People often view the Nordics as highly digitalized, judging from their move towards a cashless society. Cashless signifies a high level of digital engagement with the community and a robust usage of digital platforms for transactions. This is an achievement the Nordic countries should take pride in.”
“This gives them a significant edge in crafting products relating to digital services. The essence of their product design inherently leans towards being intuitive, simple, and deeply focused on the consumers.”
“This leads me to another observation. Despite the pronounced digital consciousness and liberal, open-minded society, the Nordic region’s public digital infrastructure in financial services is not pervasive. If I’m correct, most of their digital payment systems are predominantly bank-driven and not a public infrastructure. Comparing this to India, with its ‘India Stack’ or Aadhaar Stack, many transactions in India go through a streamlined set of APIs. Due to the scalable and efficient public infrastructure, businesses in India can start operations within days.”
“In the context of public digital infrastructure, the Nordics wouldn’t be my first thought. However, the Nordics undoubtedly excel and stand out when discussing private sector-driven digital evolution and collaborative initiatives.”
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TKJ: What is your perspective on the claim that the Nordics are among the world’s leading sustainable nations, and is this sustainability evident in their fintech solutions?
SM: “Sustainability and ESG (Environmental, Social and Governance) is primarily an economic concern, encompassing sustainable farming, power and water maintenance, and waste management. Nordic countries have long practised sustainable principles, naturally placing them ahead of many nations.”
“The Nordic countries’ natural, sustainable edge in their economy is now visible digitally. By digitally showcasing their sustainable practices, they enhance transparency, making their sustainability progress clearer and more accessible. This gives their sustainability transparency index an intrinsic advantage in detail and precision.”
“From our experience, sustainability data primarily comes from payment and ERP systems used by businesses. Nordic countries’ inherent sustainability gives their fintech firms an edge, allowing them to develop unique ESG software solutions on easily available ESG related data. Where other regions lag in sustainability, Nordic fintechs can guide them, setting standards in disclosure, benchmarking, and transition based on their sustainable foundation. Due to their economic strengths, Nordic companies work seamlessly with responsible partners. However, their solutions aren’t directly applicable in Africa or Asia. Asia, in particular, needs a shift from a ‘brown’ economy to a ‘green’ one.”
“I’d like to see Nordic companies develop tailored solutions to guide Asian businesses’ sustainability journey.”
TKJ: From your viewpoint, are the Nordic countries among the world’s most innovative nations? And do you believe the size of their domestic markets allows them to adopt a global mindset from an early stage?
SM: “Nordic nations are truly privileged. It’s not the market size that made Nordic products stand out. Instead, it’s the sheer quality of their offerings. Nordic products excel because of their meticulous design, thoughtful engineering, and excellence.”
“This superior quality spans various sectors, from food to gaming and other solutions. The consistent quality of Nordic nations is undeniable. And I don’t believe it’s connected to the market size. Nor do I think global connectivity is the sole reason for their success. Simply put, they produce outstanding products.”
“Furthermore, I’d like to share a personal perspective, though I’m uncertain how widely it’s shared. To me, Nordic societies appear to be among the kindest globally. They exude empathy, hold liberal views, respect individual boundaries, and are incredibly accommodating. Such evolved societal values likely influence product design. Being a society that’s more open-minded and freer from the common prejudices related to race, religion, and gender sets them apart. And I’m convinced that this societal advancement contributes to the superior quality of their products.”
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TKJ: Are the Nordics internationally acknowledged for being centers of innovation, and does the size of their local markets equip them with the foresight to think about global expansion right from the outset?
SM: “I often circle back to a foundational belief of mine: excellent products stem from an enlightened mind. When the mind embraces social inclusion, when it exudes empathy, and when it genuinely cares for its environment and community, innovation naturally flourishes.”
“This is what seems to have transpired in the Nordic regions. The progression towards being an incredibly empathetic society undoubtedly provides a competitive edge. However, my earnest hope, not so much a critique, is for the Nordics to extend their wisdom and values, emphasizing the significance of an empathetic society in fostering innovation, especially to parts of Asia that are grappling with myriad social challenges, including race, gender, and class disparities. Overcoming these hurdles is crucial for creating exceptional products.”
“For Nordic fintech firms looking to enter Asia, I recommend Nordic companies focus on the B2B segment. They can act as the backbone for local B2C entities, offering solutions like fraud prevention, insurance, pension schemes, and wealth advisory. Navigating the B2C space might be challenging due to cultural differences, but Nordics excel in product innovation and can thrive in Asia with a B2B strategy.”
