"Last week I shared the stage with Eivind Gjemdal (Bits AS) and Olav Johannessen (Norwegian FSA) at Dagens Næringsliv Finansteknologi where we discussed “The PSD2 battle”. The picture that some are trying to paint is that financial services in the Nordics are open, collaborative and highly competitive, a battleground operating in the best interests of consumers. I and many of my colleagues and friends working in the space call bullsh*t.
The reality on the ground, especially in the tech stacks we work with, see and experience a completely different reality and we are going to take this argument as far as we can for one simple reason.
Consumers will be the biggest beneficiaries of a more competitive payments and financial services environment.
By giving merchants lower costs and more stable pricing we can incentivize them to further harness the power of the regulatory push that enabled open banking to begin with. What is and continues to be surprising when it comes to payments services and financial data in the Nordics, is that the banks are making it harder for their own customers to see the benefits of their own investments in open banking and PSD2 regulations. Our friends at the Norwegian FSA have said much the same.
Most banks have built APIs that target compliance, a few have built APIs that target the opportunities. We see this very clearly in the UK where some banks are leading the way in how they collaborate closely with stakeholders across the industry, developing win-win solutions that firstly, give their own customers better services. With service providers competing to develop better products on top of this more open access, the end users end up winning the most. It is not surprising that the UK is also the country where the international card networks have had the hardest time cementing their dominance while in Norway, we have one international company controlling the lions share of many of our most used payments services.
The companies and people that sit as gatekeepers have eerily similar CVs. It is by no accident that we have the market conditions that we have and that is precisely why the Competitive Authorities need and will see merit in our petition.
At Neonomics, we have built competitive payments services in one of the most anti-competitive environments in the world, yet we are barely scratching the surface. The fact that international card networks control so much of so many services directly or indirectly here in the Nordics and that banks themselves routinely operate in a herd mentality furthers the need to consider - how a more competitive environment benefit consumers?
- Better access to financial options that is more personalised to the consumers need
- Lower prices, better deals and more choice for consumers
- Stronger security measures which in some financial areas are still quite poor for the consumer
We have learned and grown so much in the last few years and believe we have the fundamental building blocks in place to give the current status quo a run for its money. Our mission is to remove the inefficiencies in financial services today to give people more power when it comes to their money and their financial data. The opportunities are literally endless.
Enough is enough. A more collaborative environment between banks, merchants and technology providers like us will be a win-win for the entire ecosystem. The Nordics takes pride in being digitally-savvy yet our financial services lag behind the rest of Europe in certain areas. Regulators have tried to set the framework, but its implementation and execution has proven to be flawed. We are pushing forward as we cannot wait for the rest of the market to get its ducks in a row. The banks have the biggest opportunity to win big as there is a vibrant ecosystem waiting for a more open environment to work with. We are one of hundreds of companies, just in Norway, that would benefit from this approach, creating both opportunities and value for the country.
I posted not too long ago about summiting a mountain and the grit it takes to get there. We are now one step closer and believe the weather conditions are very favorable. We are working with some banks to improve this collaboration and create opportunities for all stakeholders. At the same time, we are taking this fight to a higher power and considering precedence we believe we not only have a fighting chance but that we can win."
Christoffer Andvig, CEO of Neonomics