The state of the Norwegian Fintech sector
Also: BNPL, A visual introduction to machine learning & Python in Excel
The state of the Norwegian Fintech sector
For the fourth time, Finansforbundet and Ontogeny Group released their status report called "Fintech 2023 - status of the Norwegian fintech sector." This time, it is based on the companies' 2022 figures, and it is not a cheerful read. Summed up, several new companies have emerged, but the overall revenue growth has stalled in 2022, losses are increasing, and only a few companies are experiencing substantial expansion.
The report might show a trend, but if one is to be precise, the report dropped 1/3 of their data (69 companies) due to a lack of submission of annual results (perhaps to finish the report for Arendalsuka?). One of these is Signicat, which, in previous reports, has been one of the largest companies. Signicat's figures from earlier years have, therefore, been removed in this report to ensure that the aggregated figures provide a more representative picture of the development. However, I still find it weird to present a report where you have dropped 1/3 of the data based on when the annual reports are delivered.
Christoffer Hærnes argues that Norwegian Fintechs are struggling because of fragile revenue models in an industry where it turned out to be anything but easy to provide financial services without being a financial institution. Just ask Vipps Mobilepay, who has applied to become a financial institution. This comes after their application to become a payment institution to offer a payment deferment of 14-30 days was declined.
On the other hand, banks are making more money than ever, while most notice that their wallets are slimmer. This has started a discussion of whether banks have responsibility for their customers' economy. Many politicians and consumer authorities say yes, while other experts say no.
Customers have an effective leverage, and that is switching banks. However, when only 7 percent take advantage of this opportunity, banks can stay put and watch their profits grow. In comparison, 36 percent switched electricity suppliers in 2022. A lack of competition influences the low switching rate. Still, more importantly, it is due to banks offering similar services and comparable digital solutions, and more than anything else, customers perceive a high cost and inconvenience when switching.
An interesting finding from Horde is that young persons (18-24 years old) who use Klarna (BNPL) have four times higher debt growth than those who do not.
Unge personer (18-24 år) som benytter Klarna har 4X høyere gjeldsvekst enn dem som ikke gjør det 🤯
Studien ble utført på 10.000 anonymiserte brukere av @HordeApp over en periode på 14 måneder.
— Alf Gunnar Andersen (@AlfG86)
Aug 14, 2023
Swedish measures against over-indebtedness are not sufficiently powerful
The previous Swedish government initiated an Over-indebtedness investigation recently published during the summer. The purpose was to counteract over-indebtedness and, in particular, to submit a proposal for a debt register where creditors can report on credits and debts to get an overall picture.
The Swedish association Svensk Inkasso participated in the investigation, but is now criticizing the fact that the investigation's proposal is not powerful enough, as it stopped short of proposing a debt register which, in principle, only includes information relating to credits provided by banks, credit institutions, and consumer credit institutions. Thus, data from the debt collection companies has been omitted, much like in the Norwegian Debt register.
A visual introduction to machine learning
We came across this excellent explanation of machine learning and how computers apply statistical learning techniques to identify patterns in data automatically. These techniques can be used to make highly accurate predictions. Highly recommended to read if you work in the Fintech space to get an idea of how this works:
Design as a Service
This week, we launched a design subscription for Banks, Fintech and insurance. At Stacc, we pride ourselves on helping countless clients in the banking and fintech sectors enhance their User Experiences. Our expertise has traditionally been provided on a project or short-term basis, but once our initial work is complete, many clients find it challenging to handle many design responsibilities without any designers on board. That's why we’ve launched Design as a Service, where you, for a flat fee, can get your design needs handled as a cost-effective alternative to hiring full-time employees or consultants. You can read more about it on LinkedIn or just reply to this email if you want more details.
Python in Excel
Excel news in this newsletter always performs very well. I therefore had to add that Microsoft is bringing the popular programming language Python to Excel. A public preview of the feature is currently available for Windows users, allowing Excel users to manipulate and analyze data with Python.
Python inside a Microsoft Excel spreadsheet. Image: Microsoft