”Of course, when making the decision to relocate to Denmark for a few months, I had to take the risk that no one knew how the pandemic was going to develop during the next months. This emphasizes the importance of staying on track of the situation in the new country, as the operating environment and regulations can change surprisingly quickly."
As there’s no ending in sight for this pandemic, the pandemic itself shouldn’t be seen as a barrier of entering new countries. Instead, when choosing which market to enter, doing your homework is increasingly important: Conduct a thorough market research and analyze the opportunities and threats, naturally also from the pandemic point of view. If the market reopening involves external parties, such as authorities and banks, be aware that things might proceed more slowly than usual or priorities might change rapidly (which might be either a good or a bad thing).
The current situation can also open a unique opportunity: If there are plenty of companies “holding it back” and waiting for more suitable time, there can be even more room for newcomers in the markets. So I actually think that this is an excellent time to concentrate on doing the groundwork and building new market entries!
Fintech scene in Denmark
Denmark hosts fintechs of all kinds; Everything from open banking and investments to financial solutions for SMEs and not-so-regular fintechs that have built their products and services around the crossroads of finance and other industries. Sustainability is currently a big topic in Denmark, also in the fintech world. Copenhagen Fintech just hosted the Copenhagen Fintech Week, for the first time online, and the entire program was tied around sustainability. Denmark was also recognized in the recent Nordic Impact Fintech Report with having the highest number of impact fintechs across the Nordics. Design and impact are definitely the factors that Denmark and Danish fintech is becoming famous for (if not already!).
There is a lively fintech community in Denmark, and compared to Finland you can at least double the number of fintech companies. It’s pretty impressive, considering that the countries are about similar in size of the population. The local fintech community Copenhagen Fintech has more than 200 members and hosts Copenhagen Fintech Lab, the coworking space for fintechs.
Copenhagen Fintech Lab is a coworking space for 40-50 fintech companies from small startups to larger, more established fintech scale-ups. For example, Nordic API Gateway and Chainalysis have started their journey from the Copenhagen Fintech Lab. This is definitely the place to be for a newcomer in the market! You get to meet plenty of fintech colleagues working with different kinds of products and markets, as well as participate in the Fintech Lab events. They also offer incubation and scaleup programs, which we are now participating as part of our expansion to Denmark.
Why Finnish fintech companies aren’t expanding more to Denmark?
Of course, as you know, in terms of population Finland and Denmark are about the similar size; Both of the countries being fairly small, I do understand fintechs “thinking it bigger” and going after bigger markets. But there are also clear advantages why Denmark could be a good choice for a Finnish fintech company that is considering their next step of expansion, such as;
Ease of doing business: In The World Bank’s 2020 Ease of Doing Business Index, Denmark was ranked number 1 in Europe and number 4 worldwide
Very digitalised nation and financial industry, for example, KYC/customer identification is not a problem
Passporting the Finnish FSA licenses to Denmark seems to be fairly straightforward
Active fintech community where you can get support, find partners, learn more about the market and build a good network
Denmark is physically and culturally close to Finland, but still a good step towards central Europe
Danish being one of the Nordic languages, it is pretty understandable to most Finns – at least in written form
I can definitely suggest considering Denmark as the “gateway” from Finland to the rest of Europe. I hope these articles have given you some new information about Denmark and doing business in the country, and if there are any further questions about expanding to Denmark, I’m happy to help you to the right direction!
– Anni Salo, Country Manager Denmark, LVS Brokers anni.salo(at)lvsbrokers.com, +358 50 502 5140