It is already serving as a prime motivator for Nordic fintechs to expand their cross-border operations in the banking sphere. The directive has raised the competition stakes for all banks across Europe, while creating a potential opportunity in the financial services sphere for those fintechs with the resources to compete with high street banks. The EU’s PSD2 directive mandates that banks provide access to registered third-party providers on behalf of and with the consent of their customers. P27 allows us to leverage new kinds of data while raising connectivity and integration between the economies of the Nordic countries,” she said. “P27 not only presents a significant opportunity to help us to further improve our offering to customers in the Nordics, it will also enable us to streamline our processes and reduce complexity internally. The transition to open banking infrastructure, bolstered by the European Union’s Payment Services Directive (PSD2), presents a ready gateway for fintechs to access and “hook” the customers of traditional high street banks, said Gredenhag.
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P27 is devised to equip participating Nordic banks with the means to build a robust and resilient payments infrastructure that delivers a wider a range of new payment possibilities. This new thinking has emerged as payments feature higher on the strategic agenda in the wake of technological advances, changes in customer behaviour, the introduction of new regulations and the shift to open banking interfaces,” Gredenhag said. “There is increasing recognition that payments are the glue that connects banks to their customers. Tech companies are developing new payment services, credit solutions, deposit accounts and may even expand to offer investment products,” Nødgaard added.ĭeeper collaborations, combined with scaled-up investment in next generation technologies, provide the best line of defence for Nordic banks to avoid a mass exodus of customers to fintech disruptors, said Lena Gredenhag, Handelsbanken’s deputy head of Nordic payments. The banking industry must respond as tech giants target lucrative core areas of banking. “Fintechs, and especially the global tech giants, have the capacity and financial muscle to become game changers in how banking services are marketed and delivered. Through collaboration, Nordic banks will core business against disruptor fintechs such as Google, Apple, Facebook and Amazon, said Ulrik Nødgaard, administrative director of Finans Danmark, the Danish central organisation for banks and financial services providers. The growth plan includes the complete acquisition by P27 of Bankgirot’s proprietary clearing system in Sweden. The EC’s merger approval means the P27 platform can move towards the next stage of its development – the on-boarding of clients in Denmark, Finland and Sweden. This concern is based on the real fear that inaction could lead to diminished power and status for traditional banks and the future possibility that they could become little more than subcontractors to fintech giants such as Google, Apple, Facebook and Amazon. Increasing cooperation among Nordic banks is driven by a need to swiftly respond to the rising presence and economic impact of fintechs and niche banks in their home markets. We are building a platform that will transform the payments infrastructure in the Nordics,” said Lars Sjögren, CEO of P27. “The EC’s approval is a huge milestone for P27. Backed by Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB and Swedbank, the P27 platform is set to become the world’s first digital platform that enables consumers and businesses to make domestic and cross-border payments in real-time, both in batches and in multiple currencies. The EC’s authorisation for P27 marks an important juncture in the creation of a single common payments infrastructure across the Nordic countries.
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The most striking alliance is led by the P27 Nordic Payments (P27) initiative, which obtained European Commission (EC) merger approval on 9 July to establish a pan-Nordic real-time payments infrastructure and platform. Visa Europe’s €1.8bn acquisition in June of Swedish open banking fintech Tink was a further reminder to Nordic banks of the magnitude of the challenge posed by increasingly well-resourced fintechs operating in their backyard.Ī growing fintech presence, which is intensifying the battle for market share and customers, has produced a number of significant cross-border collaborations between the leading Nordic banks.