Writer: Anni Salo, LVS Brokers anni.salo(at)lvsbrokers.com
”I came to Copenhagen for a 2 month period in the middle of August to give a good kickstart for the opening of Saverium.dk, the service by which LVS Brokers is expanding to Denmark, and to participate in a Nordic Fast Track program arranged by Copenhagen Fintech. At the point of entering the country in August, the pandemic situation was reasonably under control European-wide after the “first wave” this spring: Countries started to carefully open up, and travelling and everyday life wasn’t as restrictive as it had been earlier this year.
Well, as we all know, the situation has changed again, but before we go into that, let’s wind a bit backwards. You probably are now interested in why a Finnish fintech company decided to go to Denmark, or at least I’m being asked this all the time. Actually, there aren’t that many Finnish fintechs going to Denmark and vice versa, if you compare similar activities between Finland and Sweden for example. I find this strange, because there are many things that actually make Denmark an appealing opportunity for Finnish fintech companies.
Finnish and Danish people have a lot in common
From what I have learnt so far, Finnish and Danish people are actually quite alike: We like to talk things as they are and be straight to the point. Finns like sarcastic humour, and so do the Danes. We both also like beer and good food. The level of English skills is very high, so you won’t necessarily run into language barriers when doing business here. At least personally I have found it enjoyable and straightforward to interact with the locals.
Danish people have the reputation of being a very trade-oriented nation and tough negotiators, which is good to be aware of, but Finns should not underestimate themselves in the matter either. Eventually, negotiation is about finding a common ground and the best possible outcome for all parties (and going through all the possible ‘what if‘ scenarios).
The financial industry in Denmark
Denmark is a highly digitised country, which also applies in the financial industry – I would say that in some parts they’re ahead of Finland, and in parts lag behind, but in general very digital compared to many other European markets. For example, almost every inhabitant is part of the digital identity system NemID which makes it easy and secure to identify customers online. A normal consumer is still very loyal to their main bank, but on the other hand also open to the use of new technical solutions around finance. MobilePay is a good example: The app came to the Danish market in 2013 and has grown fast since. Today, with over 4 million Danish users, the app is used by the majority of the Danish adult population on a regular basis. I have even ran into cafes and shops where you can only pay with MobilePay.
There’s a high degree of regulation in the Danish financial industry, but as we’re used to it in Finland, it should not be an issue for a Finnish fintech company, just something you need to know and adapt to. What I find interesting and different from Finland is the unique mortgage system that Denmark has; I don’t want to make this article any longer by going into the details here, but if you’re interested in learning more about it, I’d suggest an interesting read on the topic by Bloomberg, published about a year ago: Negative Rates Are a Cash Cow for Denmark’s Mortgage Lenders.
In Denmark, the banking sector is highly concentrated on a few major players taking the majority of the market, which is very similar to Finland. Also smaller regional banks are popular in Denmark. And I of course have to mention that the neo bank Lunar originates from Denmark!
The second part of this blog article series gets deeper into the fintech industry in Denmark, what makes Denmark an interesting country for Finnish fintechs, and what is it like to launch in a new country in the middle of a pandemic. The article will be published on Monday, October 26th, 2020 – Stay tuned!