Established for the first time as part of the Hamburg Fintech Week 2019 as an event for networking the banking and fintech industry across borders, the first Building Bridges event of 2021 took place on February 8th for well-known reasons as a digital event.

Since 15 months have passed since November 2019, it was important to us to once again offer the Swedish fintech scene a stage to see what has happened since then. And a lot has actually happened, despite the circumstances that are currently significantly more difficult for everyone.

At the beginning of the event, we spoke to Anders Norlin from the Swedish fintech hub Findec ( www.findec.co ) and Jan Korte from Finanzplatz Hamburg ( https://finanzplatz-hamburg.com/de/ ) about the changes since 2019. Both agree that it is noticeable that Swedish fintechs have discovered Germany as an important foreign market. This not only applies to the big players like Klarna, Trustly or Tink, but in general. You can see some companies that are putting out feelers to Germany or already have concrete implementation plans ready for market entry. Anders Norlin pointed out that in general for Swedish companies the first step abroad is automatically the other Scandinavian markets. Then, for many, Germany would come directly and, to a lesser extent (keyword: Brexit…), Great Britain too. This trend is also clearly expressed in the announcement that Findec and the Hamburg financial center are currently discussing the design of a partnership. Really good news!

Immediately afterwards, the three Swedish fintechs (Markus Alin for Sharpfin / https://www.sharpfin.com/ , Fabian Grapengiesser for StockRepublic / https://www.stockrepublic.io/ ) and Anders Martensson for Vilja Solutions/ https ://viljasolutions.com/ ) confirms exactly what was said before… Swedish Companies setting sail for Germany! The details of these 3 fintechs and their approach to entering the German market can be found at https://www.buildingbridges.hamburg/ .

It can be summed up in unison for all three that knowledge of the German peculiarities (e.g. KYC, data protection, currency) and also a local network or support are considered essential for a market entry.

As an interim conclusion, it can be stated that Germany seems a worthwhile destination for Swedish fintechs, partly because of the size of the market; but what about the reverse direction? It is known that Mambu and Deposit Solutions are active in Sweden. Anders Norlin shows why it is worth looking at Sweden for German companies, even if the actual market may seem quite small compared to the German home market. Due to other location factors such as the well-developed fintech ecosystem and a high degree of innovation, Swedish fintechs are ideal for German companies, for example as partners for product development. Experience has shown that Swedish fintechs need partners at their side who can, for example, solve the KYC challenge or license issues for a market launch in Germany.

Christoph Iwaniez, CFO of bitwala ( https://www.bitwala.com/de/ ), after a brief presentation of the company and the crypto offering, went into the importance of customers who are based outside of Germany. Around 40% of customers are currently not from Germany; there are already a large number of customers from Sweden. Sweden will continue to play an important role in bitwala’s plans in the future, but the Swedish krona is currently still a hurdle for a comprehensive bitwala offer to Swedish customers.

Sarah Kok from the Women in Fintech Network ( https://www.wiftn.com/ ) moderated a panel that dealt with the question of what is the key to entering new markets.

Staffan Wegdell from AddleshawGoddard ( https://www.addleshawgoddard.com/en ) pointed out that Swedes and Germans are always surprised in the other country that there are also cultural and legal/contractual differences despite the proximity. You should get involved and prepare for this in the course of initiating a market entry.

Erik Bennerhult from Näktergal ( https://naktergal.tech/ ) reported on previous experiences specifically with Germany. It is not enough to deal exclusively with the customers, rather one must also know and take into account the sometimes heterogeneous / regional framework conditions. Madeleine Af Ugglas reported that Vilja Solutions decided to use a local “navigator” as a first step to Germany to get to know the local conditions, to have discussions and to avoid possible obstacles.

Christoph Iwaniez explained that, in addition to currencies other than the euro (SEK, GBP, CHF …), the national KYC conditions in particular posed a challenge. Currently, bitwala customers who are not from Germany still have to go through a KYC process based on the German specifications, which entails a certain complexity for the Swedes, for example, who are spoiled with BankID. Felix Magedanz from the Kiel startup Hanko (www.hanko.io) reported on the current challenges; since Hanko’s path is clearly heading in the direction of internationalization, the regulatory framework in each new country has to be dealt with in detail; uniform EU rules or not… In addition, it is not easy for Hanko to find and hire the necessary new colleagues at the Kiel location.

All participants of the panel agreed that the fintech industry is still not sufficiently diverse and that women in particular are still in a clear minority in this industry. However, companies also find it difficult to find or attract women to vacant positions. On the one hand, we have to ensure that women are finally given the same opportunities in the fintech (and banking!) industry, but on the other hand we have to advertise that our industry is a great professional home for EVERYONE.

The main findings of the BB21 event could be summarized as follows:

  1. Bridges (symbolic of international cooperation) are required; if not available, we have to build them.
  2. Businesses looking to enter a new market need to research in detail what to expect on the other side of the bridge.
  3. Ideally, someone is waiting on the other side of the bridge to “take the company by the hand” on its way into the new market.

We look forward to more events as part of the Building Bridges series; we are already working on ideas for new regions, to which a bridge building and thus also an event makes sense. Hopefully soon more and concrete information on this…

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