We were asked to give a talk at Almi HQ in Stockholm, where a banking delegation was taking place with CEO’s of venture firms and startups from all over Europe. The idea was for us to represent a northern perspective of the tech-sector, with ‘digitalisation’ as the theme. Here at Instantor, we take pride in being a part of supporting the tech-community to grow, share knowledge and challenge one another. In other words, that was of course something we were happy to do.
We're proud to announce we’ve been approved to operate as an Account Information Service Provider (AISP) in Sweden, by the Swedish FSA (Finansinspektionen). We’re the first authorised AISP FinTech in the country, allowing us to build and provide better and even more relevant services.
The Swedish FSA's approval means we can continue developing products that support consumers to prove their true financial capacity. We see it as an important step in helping the financing industry to digitise its processes, as well as a significant step for the future of our company.
Image Credit: Hanson Lu
Just a few years ago, only a few people in the financial industry had access to an individual’s banking data. Data was ‘owned’ by a few major players such as large financial institutions, and all access had to go through these information gatekeepers. Limited sharing of data has resulted in a stagnated offering of banking products to customers that have not significantly changed in decades: people are paying too much for their overdrafts or money sits in current accounts earning little, or sometimes even no interest. To summarise, customers are not happy.
On-boarding drop-out rates are rising significantly for financial service institutions. Banks are now losing 52% of their potential customers to application drop-out, an increase of 35% from two years ago. Consumers are increasingly frustrated with time-consuming, legacy processes and are willing to switch to challengers in their search for a streamlined, user-friendly experience. In fact, 43% of customers who had low satisfaction during new account opening indicated they will “definitely or probably” switch as a result.
Image Credit: Etienne Boulanger
Since the 2008 financial crisis, the banking landscape has undergone a seismic shift to a new age of innovation and digital transformation, marked by the advent of FinTechs companies. By observing and often experiencing first-hand what banks offer – or do not offer – these new entrants have targeted what consumers perceive as the failings of banks to capture significant market shares.
6% of global consumers have shifted their primary banking relationship from traditional banks to newer companies with better technologies and simpler products. This percentage is on track for continued growth. In 2015, one in seven digitally active consumers was using FinTech. In just two years, that number has risen to one in three. The banking landscape is fast moving from an era in which a handful of big banks dominated global markets. This is a significant shift in the banking landscape: one that’s driven by radical changes in consumer preferences and underpinned in part by a generational gap.
Image Credit: Fineas Anton
To eliminate extreme poverty, many leading global organisations have made financial inclusion a top priority. Business leaders and policymakers have dedicated themselves to improving the quality of life for the world’s poorest, and they believe economic and social progress starts with an inclusive financial system that meets the needs for all income levels.
2018 has been a fantastic year for Swedish startups. In the past 8 months alone, Stockholm has given birth to 3 new unicorns, and has been home to some of the world's biggest tech exits, including the $29B IPO of home-grown Spotify in April.
As Financial Services processes continue to become digitised, one could almost be forgiven for expecting that more consumers would, therefore, complete the on-boarding process. Yet, drop-out rates are mounting as modern consumers demand easier online applications. This increase is spurred, in part, by how mobile technologies have raised consumer expectations, as users expect simplicity in design and experience.
The traditional credit scoring system has long been used as the primary method to rate a person’s creditworthiness. The current rating system is led by a select handful of major credit bureaus and agencies within each country, who hold the power to determine an individual’s credit eligibility. Yet new systems, known as alternative credit scoring methods, make a strong case for providing a fairer and more modern scoring system and are already making huge strides in shaking up the industry.
Here at the Instantor Zagreb office, the working environment is hugely important to us. We realise that behind every great business is a team of happy people, and it is our responsibility as an innovative company to make that happen. Our culture is centred around a shared set of beliefs, values, and practices. By having a great environment we can attract and retain the best talent, and importantly, have fun while doing it! A happy culture leads to pleased customers and to satisfied employees in return; it’s at the heart of everything we do.