Sustainability as a success factor for Nordic fintechs

Why is sustainability such a hot topic in the fintech world right now? And why is the Nordic region evolving into a hotbed for sustainable fintech solutions? Let’s hear some answers from different angles of our fintech ecosystem.

We organized a panel discussion addressing these questions as part of the program of our satellite event that was streamed from Helsinki during the Singapore FinTech Festival 2020.

The panel discussion was hosted by Teppo Havo who works at Danske Bank as the Head of Startups, Growth and Societal Impact & Sustainability in Finland. The panellists included Hasan Malik, CEO & Founder of P3 Cloudasset, Ilona Kivimäki, Business Development Director of Sustainability Services at Enfuce, and Pekka Sivonen, Executive Director at Business Finland.

Everyone was excited about the topic, as sustainability is clearly one of the most significant megatrends of today and tomorrow.

“Europe wants to be the role model for the rest of the world, and Finland wants to be a thought leader and a forerunner for this continent,” Sivonen summarizes the ambitious targets.

Customer demand drives the development

Enfuce is one of the Finnish fintechs that is showing the way in the field of sustainability and has always had it as one of the core values of the company.

“There is a growing interest towards a low-carbon lifestyle. Approximately 70% of greenhouse gas emissions come directly from consumption, which means that we individuals, ordinary people, could make a huge impact, but we are lacking the tools,” Ilona Kivimäki says.

She reminds that if you really would like to lower your carbon footprint, you need to be able to measure it. Enfuce’s solution My Carbon Action does exactly this by giving consumers insight on the environmental impact of their everyday actions.

“As fintechs we can provide a holistic view to consumers of what is the actual environmental impact of their actions,” Kivimäki explains.

Hasan Malik refers to United Nations’ Sustainable Development Goals that provided a good framework for P3’s approach to sustainability.

“The three main themes for us at P3 are the environment, social impact and economic impact. Interactions and transactions have to be responsible. That creates the sustainable lifestyle not just from the individual point of view but from the ecosystem point of view,” he says.

Living and breathing the right values

According to Hasan Malik, you must start from outside in.

“It is all about how we are defining our value propositions. When you focus on the themes that drive you and take those to the market, you can create impact,” he says.

Finland is a very conscious society in terms of its impact, and societal awareness is very high here. These values are something that P3 wants to globalize and take wherever they operate.

“When I wanted to build P3, I needed to be in an environment where I could be inspired. You can look at aspects like financial inclusion, equality, economic access, and when we see these things working and we live and breathe that environment, it allows us to create those value propositions and take them credibly to the world. If we did the same in some other part of the world, where these values were not alive, it wouldn’t be so easy to really internalize them,” Malik explains.

“For us, being a Finnish company – coming out of Finland and having the Finnish values embedded in operations – really makes the difference,” he says.

That value base has an impact on the consumer behaviour, too.

“Consumers are really sustainability-oriented, educated and aware, so the market-readiness is very good here,” Ilona Kivimäki says.

Pekka Sivonen agrees and continues: “Tech-savviness of the people in the Nordics is very high, so this is probably the best test lab in the world for launching new solutions and services.”

Hasan Malik wants to send a message to all Nordic fintechs out there:

“You are in the right live lab already, utilize it and learn from it and create those value propositions that solve problems and fulfil needs around the world,” he encourages.

Ecosystem supports collaboration and disruptive thinking

Everything in our life is happening nowadays in mobile. One of the clear assets of the Nordic countries is the great amount of knowledge in mobile communications and software. Pekka Sivonen believes that this is one of the most important reasons why Nordics are emerging as a hotbed for sustainable financial technology. Another reason is our ecosystem approach.

“What is unique in the Nordic countries and especially in Finland is the ecosystem thinking where we facilitate mechanisms with our funding to bring big and small companies together to tackle bigger challenges,” he describes.

The Nordic market is a very condensed area with lots of talent, a high-quality education system and a strong focus on R&D. However, the market area is so small that partnerships are needed with companies coming from elsewhere with a different geographic footprint.

“You should imagine a scenario, make a map and figure out who do you need to partner up with in order to stay viable also in the future and to survive in the fierce global competition. We are looking for disruptive, exponential thinking,” Sivonen says.

The secret sauce for success

To conclude the discussion, Havo challenges the panellists to pick one key factor for creating a successful sustainable fintech product or service.

Ilona Kivimäki emphasizes the importance of transparency and the scientific base.

“When talking about sustainability, there is always speculation about green washing. It is crucial to be able to establish trust between companies and end-users. If you provide some calculations, they need to be based on reliable methods and scientific research,” she says.

Hasan Malik brings up the human-centric approach.

“The common nominator is the end-user: the individual benefiting from your product or service. The context is different from market to market, so keep that individual in mind, be responsible, focus on the impact and just go for it,” he advises.

“The world is in a situation that screams for ecosystemic thinking, partnerships and collaboration, and disruptive ideas. We have already seen private-public partnerships, and now we need to include people in our thinking – that is the secret sauce for success,” Pekka Sivonen sums up.

This panel discussion was organized during the World Fintech Festival in Finland that took place on December 9^th, 2020, as part of the world’s largest fintech conference Singapore FinTech Festival. You can watch the recording of the broadcast over here.