Market study: The Swedish market for financial technology (fintech)

This market study helps in your research on the Swedish market for financial technology (fintech). It gives an overview of the industry, trends, requirements and potential business partners. Moreover, representatives of fast-growing Swedish fintechs share their recent experience of the market.

What does fintech mean?

Fintech is defined as innovation in financial services, based on technology that could result in new business models applications, processes, or products with an associated material effect on the provision of financial services. Fintech companies in this context are companies whose business model focuses on these innovations. Fintech can be broken down further and classified by main economic activity areas and corresponding technological innovations.

Sweden ranked 4th globally by number of active developers

Sweden represents a very attractive and interesting market for both fintechs and their servicing companies, such as outsourced subcontractors. The key catalyst for the rise of disruptive fintechs in the mature Swedish financial industry has been the rapid development of its information technology (ICT) services sector.

Sweden is one of the strongest and most competitive ICT services providers in the European Union (EU), with a particular emphasis on open-source technologies. A recent study estimated that at the beginning of 2021, Sweden ranked 4th globally by the number of active developers per 100 thousand population. In addition, the success of Swedish fintechs has been
supported by the wide consumer adoption of innovations.

Albeit a relatively small market in the global context, Sweden is the centre of attention of the international fintech community. Sweden’s supportive startup ecosystem for fintechs represents a birthplace of many global industry trailblazers, like Klarna, iZettle (acquired by PayPal), Trustly, Tink and Swish, one of the most successful nation-wide mobile payments apps.

Competition is high

However, as the Swedish fintech markets matures – with over 500 local fintechs, the competition is high. Fintechs in Sweden also face challenges due to the vast influence of the local banking system and the legacy payments infrastructure that it struggles to maintain and has no foreseeable plans to transition from.

At the same time, this situation has increased the need for transition and/or integration between various systems, presenting wide market opportunities for those with legacy computer language expertise. The slow market reaction times of the major banks have, however, ushered many opportunities for the fintechs to react upon. Since Swedes are quick to adapt new technologies, any new market need that arises, is usually quickly solved by some fintechs and also quickly brought to the market, surpassing the capabilities of banks to do the same.

Open to partnerships and outsourcing

But the key factor why Sweden can be attractive to foreign fintechs, is that Swedish financial services providers are becoming more open to partnerships and outsourcing, as they come to realize the physical limitations of their market talent pool, as well as advantages to a more streamlined business model. In order to catch these opportunities at hand, key methods for this is to optimize visibility and accessibility online and to make use of the well-developed fintech community and network in Sweden, mainly by taking part in industry networking events.

For more tips on exporting to Sweden and the EU, check out our guide The Road to Export.