by Svea Bank
“It’s immensely challenging for a small business to open a bank account with one of the main banks in Sweden,” says Johan Bergström of Svea Bank, an agile institution dedicated to entrepreneurs and startups. Onboarding a business account in Sweden involves significant costs due to the burdens of KYC and AML compliance. High costs and skepticism about long-term profitability make small businesses a low priority for traditional banks. This gap has left many entrepreneurs struggling to secure the financial tools they need to grow.
Svea Bank addresses this gap with a data-driven solution that drastically reduces onboarding costs and opens up access to financial services for small businesses. “Volvo didn’t start with 25,000 employees from day one. You have to cater to small businesses so they can grow,” Johan emphasizes, reflecting on Sweden’s entrepreneurial legacy.
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Banking-as-a-Service: A Game-Changer for Partners
Svea Bank’s innovative BaaS platform has its roots in the bank’s own operations. “We were our first customer,” says Johan. Operating entirely on the same APIs it now offers to partners, Svea has perfected its system to ensure stability, security, and compliance. This platform allows partners to build their offerings directly on Svea’s balance sheet, enabling embedded financial services for various use cases.
One of Svea’s most prominent partnerships is with Bokio, a leading accounting and business management platform. Together, Svea and Bokio provide business owners with an integrated solution for managing finances, from bookkeeping to payments, seamlessly embedded within the Bokio platform. This partnership exemplifies Svea’s commitment to empowering entrepreneurs with tools that are as accessible as they are effective.
Seamless Integration and Data-Driven Efficiency
Svea’s reliance on data-driven principles allows it to onboard businesses efficiently and assess risk more accurately than traditional banks. While many incumbents hesitate to adopt such methods, Svea has leaned into this approach, enabling the bank to take on customers that might fall outside conventional risk parameters.
This strategy is paying off: in the first half of 2024, Svea reported profits of SEK 734.8 million (USD 65.4 million). The bank’s ability to combine cutting-edge technology with a deep understanding of its customer base has been a cornerstone of this success.
The flexibility of Svea’s platform also allows partners to choose between embedded implementations or a platform-as-a-service model, depending on their needs. This versatility ensures that Svea’s BaaS solution can accommodate a diverse array of use cases and industries.
Join us at Stockholm Fintech Week on Feb 11-12!
Building Trust through Technology
As Svea continues to refine its BaaS offering, the focus remains on delivering secure, compliant, and scalable solutions. The bank is actively preparing for broader integration with systems like SEPA to enable seamless cross-border transactions. “Banking is all about trust,” Johan emphasizes. “We are committed to ensuring that our platform is as secure and reliable as possible before expanding further.”
The Future of BaaS
As Svea Bank continues to refine its BaaS offerings, its focus remains on empowering businesses and fostering innovation. Through strategic partnerships like its collaboration with Bokio, Svea is not just filling gaps left by traditional banks but also setting a new standard for what financial services can achieve.
“Our mission is to support entrepreneurs and businesses with the tools they need to succeed,” Johan concludes. With a clear vision and a proven track record, Svea Bank is poised to lead the way in transforming banking for the modern age.