Denmark

95% of houses in Denmark have internet access, and 88 per cent of Danish mobile phones are smartphones. The proportion of 14–76-year-olds using digital banking is 91% in Denmark. In general, online banking has grown in popularity among all ages in Denmark over the past decade, with the overall penetration rate increasing from 83% in 2011 to 95% in 2020. Additionally, Denmark ranks second in the integration of digital technologies and digital public services among EU countries in the Digital Economy and Society Index (DESI) 2022.

Denmark falls under the PSD2 legislation and has adopted Berlin Group’s NextGenPSD2 standard. PSD2 is a European Directive that regulates electronic payment services and was implemented in all EEA countries in 2016 and went live in September 2019. Finanstilsynet is the financial authority in Denmark.

In their European Open Banking league, Yapily ranked Denmark 7 out of 18 because Denmark has good regulatory supervision with some guidance provided around implementation. Denmark’s well-established mobile banking payments infrastructure makes it well-prepared for Open Banking. It is also part of the Nordic P27 initiative, using the collaborative model to take its proven domestic payments system to the next level. Denmark also sees greater bank support for API customers than its other Nordic counterparts, with brilliant downtime communication, responsiveness, and willingness to solve issues.

However, Yapily states that Denmark has no industry body to help centralise standardisation and drive technical standards. The progress toward Open Banking could be accelerated by creating a specific industry body to oversee its standards and implementation – similar to the UK Open Banking Implementation Entity (OBIE). Alongside this, as a quickly maturing market, Denmark should aim to lay a foundation upon which Open Finance can be built in the coming years, bringing in regulation beyond that implemented at the EU level.

The EU Commission has announced its intention to adopt an Open Finance regulatory framework.

There is already robust culture of interoperability between the authentication solutions in the Nordic Countries, which consist of Denmark, Finland, Iceland, Norway and Sweden. The P27 initiative is expected to increase interoperability, and efficiency and save processing time of cross-border payments. 

Denmark, Finland and Sweden are working together towards the Nordic collaborative models and P27 initiative, which include Open Banking to deliver a cross-country system and to establish a common clearing platform for payments in DKK, EUR and SEK. While Norway had been a driving force behind P27 in its first year, it stepped back from its involvement in layer one services, consisting of interbank debit transfers, cross-border payments, requests to pay, real-time payments and batch payments  (see Figure 1). However, Norway is expected to join the initiative again soon, as the P27 banks have a large market share in the country. The P27 initiative started in 2017 as a joint Nordic bank project. In May 2019, an interim company was established to implement the initiative. In June 2019, an agreement was signed with Mastercard to operate the payments platform. The aim of the initiative is to create one common state of the art payment platform for the Nordic countries. 

The next step for P27 is to obtain the necessary clearing licence and merger filing approvals, as well as continue to develop the clearing platform together with Mastercard. The ambition for the company is to go live with the first transactions in 2022.

According to The Global Findex Database, 100% of Danish had bank accounts in 2021. Danish consumers are particularly interested in the benefits that Open Banking payment initiation services can provide. In a recent study researching the Open Banking adoption among consumers, 41% of Danish consumers were interested in having their data used to develop convenient new payment methods and 38.5% were interested in receiving intelligent assistance to manage payments.

Denmark has good regulatory supervision with some guidance provided around implementation. However, it has no industry body to help centralise standardisation and drive technical standards. This is something they will most likely be implementing in the coming years.

Yapily states that given the existing direction of Denmark and its welcoming approach to Open Banking, regulators should start focusing on how Open Banking will become interoperable with Open Finance. Regulators could provide a roadmap to start preparing TPPs on how to adjust their internal systems, in a way that would allow them to integrate with other financial providers beyond banks as features become available.

The Danish financial sector is one of the most digitised in the world, with new initiatives evolving regularly. For example, an online log-in solution was created in 2010 to help fight online crime targeting banks and consumers. The achievement of continuous digital development is attributable to good collaboration between the financial and public sectors.

Denmark, Finland and Sweden are working together towards the Nordic collaborative models and P27 initiative, which include Open Banking to deliver a cross-country system and to establish a common clearing platform for payments in DKK, EUR and SEK. While Norway had been a driving force behind P27 in its first year, it stepped back from its involvement for layer one services. However, Norway is expected to join the initiative soon again, as the P27 banks have a large market share in the country. The P27 initiative started in 2017 as a joint Nordic bank project. In May 2019, an interim company was established to implement the initiative. In June 2019, an agreement was signed with Mastercard to operate the payments platform. The aim for the initiative is to create one common state of the art payment platform for the Nordic countries. The next step for P27 is to obtain the necessary clearing licence and merger filing approvals, as well as continuing to develop the clearing platform together with Mastercard. The ambition for the company is to go live with the first transactions in 2022.

Denmark ranks fifth in human capital among EU countries in the Digital Economy and Society Index (DESI) 2022. 

The human capital measures digital skills, the proportion of employed people working as ICT specialists, female ICT specialists, and enterprises offering ICT training.

FT Lab is the Finanstilsynet or the  Danish financial supervisory authority (FSA)’s regulatory sandbox, where selected financial companies can test their innovative business models in a safe environment. FT Lab ensures a basis for testing innovative financial products and services, promotes the development of beneficial financial products and services for consumers and society, helps the Danish Financial Supervisory Authority to better understand Fintech and supports the use of new technologies in the financial sector.

Denmark has adopted the Berlin Group’s NextGenPSD2 technical standard.