Finland

95% of houses in Finland have internet access, and 96% of Finnish mobile phones are smartphones. The proportion of 14–76-year-olds using digital banking is 95% in Finland. Online banking is gaining popularity among senior citizens. According to Finance Finland’s survey conducted in 2017, more than 80% of users aged 65-74 years tend to use online banking. Additionally, Finland ranks first in the integration of digital technologies and second in digital public services among EU countries in the Digital Economy and Society Index (DESI) 2022.

Finland 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. Finanssivalvonta (Fin-FSA) / Financial Supervisory Authority is the financial authority in Finland.

In their European Open Banking league, Yapily ranked Finland 12 out of 18 countries due to good regulatory supervision with some guidance provided around Open Banking implementation. Alongside Sweden and Denmark, Finland is part of the P27 initiative, a real-time domestic and cross-border payment system implemented across the Nordics, and like its Nordic neighbours, Finland boasts a tech-savvy population.

However, there is no independent implementation body, such as OBIE (The Open Banking Implementation Entity) in the UK, to help centralise standardisation and drive technical standards. To take its Open Banking ecosystem to the next level, Finland must focus on standardising APIs across the largest banks and improving bank uptimes.

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 Finnish had bank accounts in 2021. Finnish 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, 31% of Finnish consumers were interested in receiving intelligent assistance to manage payments, and 30% were interested in having their data used to develop convenient new payment methods.

The regulations in Finland are stricter than in the EU in general; however, the government offers Finnish Fintechs a steady business environment, digital literacy, strong cybersecurity and frameworks in open source, data and API. Finland has good regulatory supervision with some guidance provided around Open Banking implementation. However, according to Yapily, an OBIE-like body would help centralise standardisation and drive technical standards, while adding a lot of value to the ecosystem as it would help clarify any remaining issues around the implementation of Open Banking and how the industry could address more use cases.

Finland is an internationally recognised Fintech hub with a lot of activity saturated around Helsinki. The number of Fintech companies has increased steadily from around 190 to over 210 in 2021, more than 50% of which were founded in 2014 or later. 

Finnish Fintechs benefit from a steady business environment, digital literacy, strong cybersecurity and frameworks in open source, data and API. These conditions, combined with a strong ecosystem around technology startups, make Finland an ideal operational environment for Fintech.  

The Finnish banking sector is dominated by four major banks: OP Financial Group, Nordea, Danske Bank and Municipality Finance. These banks hold 80% of the total market share. However, at least 21 major banks currently offer Open Banking services in Finland.

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. 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 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.

Finland ranks first 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.

The Finnish Financial Supervisory Authority’s (FIN-FSA) Innovation Help Desk advises service providers on authorisation, registration and other licence issues. The Help Desk welcomes as customers both start-up companies in the sector as well as already established enterprises that are planning to introduce a new type of product, service or way of operating.

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