The Nordic region, especially Denmark, has led the way in integrating digital financial services with the public sector, providing efficient, user-friendly platforms. However, challenges persist due to regulatory hurdles, and some individuals find it difficult to access public services due to barriers to digital platforms, underscoring the importance of ensuring inclusivity and providing additional support.
The Nordic countries are at the forefront of digital governance, where financial services are seamlessly integrated with public sector functions. This includes everything from tax filing and social security to digital banking and payment systems.
Citizens across the Nordic region benefit from highly efficient, user-friendly platforms that simplify complex financial processes and ensure accessibility for all.
“We usually say that (almost) all users are both citizens and customers in a bank. With this “overlap” in the user group, and both sectors being highly digitised, the collaborations have proved to be very beneficial and make it possible to develop solutions that are either linked or can be used across both sectors,” says Michael Busk-Jepsen, Executive Director, Digitisation, at Finans Danmark.
Denmark was one of the earliest countries to adopt digitisation fully. For many years, Danish banks have been pioneers in going digital, focusing on making banking more convenient for customers while cutting costs. Additionally, the banking sector has a strong tradition of working together on major infrastructure projects.
The financial sector has a history of being an early adopter of digital technologies. For example, Denmark was the first country to make electronic securities trading, replacing physical securities with digital records in 1983.
At the same time, the public sector in Denmark has pursued a strong digital agenda for many years, guided by Joint Government Digital Strategies. These strategies involve collaboration between national, regional, and local governments to build a unified digital public sector.
“We have always had a strong tradition of good collaboration between the private and public sectors. That also goes for the banks’ cooperation with different public entities. With the public sector focus on digital strategies, it has therefore been quite natural to extend the collaboration to the public sector in the digital realm,” says Busk-Jepsen.
MitID revolutionizing security
A significant milestone in the digitisation of Denmark’s public sector was the launch of the digital ID NemID (EasyID), the electronic ID, in 2010, and since 2021 the next generation of digital ID – MitID (MyID).
“NemID was based on a collaboration between the banks and the public sector, and the collaboration on NemID has been crucial for the digital development we have seen in Denmark over the past 10 years. And this has continued with MitID,” says Busk-Jepsen and adds:
“The collaboration is driven by a strong desire to create a single solution that can be used across public and private self-service solutions.”
Michael Busk-Jepsen
Today, MitID is used by all Danish banks and Public Authorities. It is also used by more than 1,400 third-party service providers, ranging from the Danish version of Craigslist, DBA, the Danish dating portal Scor.dk, to the national lottery and gaming company in Denmark, Danske Spil. According to Finans Danmark, MitID has approximately 20 million transactions each week.
MitID also serves as a great example of how the quality of the digital solutions has increased security when it comes to avoid misuse or fraud. Neither MitID nor NemID has ever been hacked due to multiple layers of protection. MitID also protects against identity theft and meets high standards for identity verification.
“The solution is a good example of effective collaboration between the public and financial sectors. A solution that ensures that Danes can easily and securely be identified and communicate with authorities and businesses online,” says Daniel Vittrup, Deputy CEO at e-nettet.
e-nettet is the financial sector’s joint digitisation enterprise and has contributed to many crucial digital solutions.
Selected e-nettet solutions:
Digital Tinglysning
Digitalisation of land registration provides society with significant savings of more than 100 million euros annually. The solution serves real estate agents as well as financial and mortgage institutions, ensuring that registration processes are carried out efficiently.
eSkatData
Allows banks to access customers’ tax information directly in the systems they use daily. This creates a solid foundation for customer advice and credit assessment without manual data entry and scanning of physical documents, resulting in less paperwork for all parties.
Ejendomsdata
Provides access to data such as property characteristics and historic prices, helping both real estate agents and financial institutions when setting the right listing price or offering a loan. The solution saves time on documentation and data entry.
Digitisation empowering banking
Due to the high degree of digitisation, the financial sector can offer products faster. As a customer, you no longer need to go to the bank during business hours to sign a piece of paper. As a bank, you get the desired response immediately and are no longer dependent on physical locations.
According to e-nettet, the vast majority of banking transactions and interactions can be handled remotely today, making bank operations much more efficient. This has led to the closure of many physical bank branches.
Public-private partnerships have created networking opportunities for companies, allowing them to connect with potential partners, investors, and customers.
“Systems like MitID and a generally high level of digitisation in Danish society make Denmark the perfect sandbox for fintechs to launch new solutions and services. The well-developed digital infrastructure serves as a strong foundation for many new start-ups. New users can easily identify themselves, and digital communication channels are already trusted and well established.”
Daniel Vittrup
Data from the European Commission confirms that we have one of the EU’s most digital economies and societies.
“We are quick to adapt to new digital solutions, and our public and private sectors are among the most digital – not just in Europe – but the entire world. This is an excellent foundation for the introduction of new solutions,” says Busk-Jepsen and highlights that public-private collaboration on digital ID has been essential in enabling the development and launch of several other solutions, such as the digital driver’s license, a Corona passport, and strong customer authentication for card payments.
“It is unique in the EU to have a single digital ID that can be used both for online banking, at the doctor’s, on several private companies’ websites, and for general communication with the public sector. It makes it easier to act digitally as a bank customer and citizen,” Busk-Jepsen says.
Factors such as public sector budget constraints, procurement rules, and regulatory requirements can delay the development of solutions through public-private partnerships in Denmark.
“Strong governance and ongoing dialogue are crucial to navigating these complexities. We believe overcoming these challenges will ultimately lead to more satisfied citizens and bank customers,” says Busk-Jepsen.
Digital inclusion challenges
One approach to ensuring widespread digitisation in Denmark is through consistency. The chosen strategy mandates everyone to adopt a particular platform or solution, with exceptions only granted under specific conditions.
However, this approach also presents particular challenges.
Some estimates suggest that nearly 20% of the population aged 15 to 89 face digital challenges due to various factors, including disabilities, limited IT skills, a choice to avoid technology or lack of registration in Danish systems for those who have recently moved to Denmark. This presents a challenge that demands additional support from authorities.
“A specific challenge for Denmark is that the public solutions must be capable of accommodating all citizens in all situations. This brings additional complexity and cost into any collaboration and the financial and public sector must work together well in order to secure effective ways of supporting the non-digital citizens,” says Vittrup.
Denmark has reached out to non-digital citizens by offering in-person assistance at places like Citizen Service Centers (Borgerservice) and bank branches. For example, Danish banks helped with the roll-out of MitID by using their branches and support teams to guide citizens who needed help. Other approaches have included running awareness campaigns for specific groups and working with interest organisations to gather feedback and ideas.
