The Future Of Finnish Fintech Is Bright

Of course you’ve heard of Nokia – and you know about Rovio and Supercell too. But have you heard of Finnish fintech? After phones and gaming it might just be the next big thing to come out of the land of a thousand lakes.

Our guest blogger, John Hill from Zervant wants to tell why fintech is big – and why Finland is the place to look for it.

To fully explain this phenomenon we’re going to need to delve a little deeper than your average listicle of “exciting companies” by going through three reasons why Finnish fintech is hot right now.

Finnish fintech not only embodies many of the traits that have led to other great start-ups in the country, it’s also symptomatic of wider changes in the global economy.

From the Ashes of the Multinational Comes the Start-up Phoenix

Reason number one is tied to the perennial Finnish ability to re-invent and adapt. Throughout history Finns have always seemed to find a way to turn unfavourable odds to their advantage. Maybe it comes from centuries of being on the fault line between East and West? Or maybe it’s just good old fashioned grit and determination (that famous Finnish “Sisu”).

The shadow of Nokia still looms large over the Finnish economy. Not surprising, given that in its heyday the company accounted for 4% of national GDP. So when things went South there was quite a large hole to be filled by the Finnish start-up scene.

According to Dennis Mitzner of TechCrunch, over 200 start-ups in the gaming sector alone have emerged since 2009. And this market was worth over $2 billion last year. The Huffington Post and Geektime have also picked up on the Finnish start-up phenomenon, writing about the unique symbiotic relationship that exists between start-ups and big business in the country. In fact, Bloomberg now ranks Finland as one of the top five countries when it comes to innovation worldwide.

And the change isn’t just economic.

Time was when the most popular stereotype about Finland was how shy its people were. As the jokes goes, there’s two types of Finn – the introvert, who looks at his own shoes when talking to you, and the extrovert, who looks at yours. But if you were in Helsinki a few weeks ago you’ll have noticed something quite different.

Over 15 000 journalists, VCs, entrepreneurs and start-ups descended on the city for the annual Slush-conference. In just over 5 years it has become one of the world’s biggest start-up events. A unique platform for the once shy and retiring nation to show off its unique start-up talent.

So, great to know that Finns are adaptable and inventive – and that they make killer gaming software. But where’s the link to fintech?

Old Banks – New Entrepreneurs

Well it’s not only Finland that’s been changing, the whole world of work has evolved since Nokia’s demise. Which is where reason number two comes in.

The banking sector took a serious beating following the events of 2008. And subsequent attempts to regulate and control the industry continue to limit its ability to evolve alongside the rest of the business landscape.

And this landscape is changing. Fast.

Micro and small business are growing in ever increasing numbers. In the UK, for example, the number of new start-up companies created is set to hit 600,000 this year alone. That’s a 36% rise in under 5 years! The SME sector now accounts for 95% of all UK companies. The rest of Europe is not far behind either. According to American Express, the title “owner” is now the fifth most popular amongst Gen Y.

Old, out-dated, and over regulated banking structures simply can’t keep up. Which has created quite a big gap in the market. And it’s a gap that the magical combo of geeks in T-shirts and venture capital have been all too happy to fill.

Which, in a nutshell, is how fintech was born.

It’s an industry that, as Forbes explains, is “easing payment processes, reducing fraud, saving users money, promoting financial planning, and ultimately moving a giant industry forward”. The figures speak for themselves, with global investment nearing $3 billion in Q1 of this year alone – compared with less than $1 billion in Q2 of 2010.

But what joins the dots between the two trends?

Well, although running your own business is a thrilling ride, it’s certainly not without its challenges. And it’s not just about what your business does. You suddenly need to find a way to manage all the things that used to be taken care of for you, when you worked for someone else. Sending invoices, getting paid, and managing your money, to name but a few, all suddenly end up on your own desk.

“Yes, ok”, I hear you say: “fintech is big, but I’m still not sold on the idea of Finnish fintech”.

The Little Brother With Big Ambitions

Finland has a lot in common with its Nordic neighbour, Sweden. In fact, so much so that it’s often referred to as Sweden’s little brother, be it politically, economically or socially. But yet again it’s something the Finns have turned to their advantage.


Well the answer lies in reason number three. Coming from a small home market means that you need to have a strong international outlook if you plan to make it big. From the very start you need to have a product that will appeal to users outside of Finland, something that people feel is localised and relevant to them.

This applies to many different things: language, usability, cultural quirks, or regulation – which is the last point being crucial when talking fintech. Once again the Finns have a proven model for achieving big things with few resources.

What’s Next?

Building on what we’ve already discussed, it would be fair to say we’re at a crossroads. We know Finland is a dab hand at launching new, cutting edge ideas, with a thriving start-up community to prove it.

We also know that fintech is growing, as it looks to cater to a new breed of 21st century entrepreneurs. Add in Finland’s adaptable, internationally focused outlook, ideally suited to our increasingly connected world, and you start to see quite an interesting picture emerge.

There’s another gap in the glo
bal market right now, and Finnish fintech is ready and waiting to fill it.

This post is written by our guest blogger John Hill, the marketing manager of Zervant – a Finnish start-up that provides online invoicing software for over 70,000 small businesses and entrepreneurs worldwide.