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Nordea Bank launches startup accelerator to boost fintech innovation

Nordic bank is the latest finance firm to turn to startups for digital innovation

Nordea is joining the ranks of corporations who believe startup co-operation is the key to innovation in the banking sector. The Nordic bank has launched a startup accelerator programme and is looking for 10 to 15 companies to help develop new digital services for its customers.

“We need to rethink the way we are developing banking going forward,” said Christian Bornfeld, Nordea’s head of digital banking. “Where the new thinking is coming from now is from smaller companies around banking. We have seen a more vibrant fintech [financial technology] community and startups pop up in the Nordic region during the past few years. So [an accelerator programme] seemed like a very good match.”

The three-month programme will focus on developing new innovations for payments, savings services, customer experience and digital customer interaction. The application period for the accelerator is open and Nordea aims to have the selected startups working at its offices in Vallila, Helsinki in November 2015.

Seed investment

In addition to the workspace, the startups will be given coaching, access to Nordea experts, resources and relevant application programming interfaces (APIs), as well as receive a seed investment of €6,000 to €100,000 based on progress and agreed milestones. The programme is run by Nordea’s digital banking unit – a 400-people division founded in October 2014 to develop and deliver Nordea’s digital offering – in collaboration with Finnish startup accelerator Nestholma.

“It is a model where we could quickly invest some money together with Nestholma and get some practical results in a very short timeframe, within the next three to six months,” said Bornfeld. “We will continuously re-evaluate if we want to increase our investments or if we want to try out another model.” 

Bornfeld said the aim is to develop the ideas together, but startups will retain their intellectual property. The door is also open for deeper partnerships as Nordea hopes to find three or four companies it can keep working with after the programme and in which it can potentially become a major investor.

While the accelerator programme is open for all startups across the Nordics, Nordea expects most companies will be from Finland as this is where the work will be physically done. Consequently, the bank, which has more than 10.5 million household and business customers in the Nordic and Baltic countries, is already planning similar initiatives in other capitals in the region and evaluating options in Stockholm and Copenhagen.

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Need for agility

With its accelerator programme, Nordea is joining a growing number of banks deepening their startup co-operation, for example Barclays Bank in the UK launched its own accelerator programme in June 2014. While the need for digital innovation is a major driver, Bornfeld believes corporations also have something to learn from the startup mentality.

“Especially if you look at sectors like banking or insurance, we have always been taught that risk is not good and should at least be managed very carefully,” he said. “At the same time we see lots of new, interesting ideas coming from these startups. They take risks and are used to in a way failing many times before they actually succeed. 

"This is an area where we will need to improve to be competitive going forward. Opening our doors and having these companies sitting in our premises is a good way to also inspire and influence the way we think internally,” Bornfeld concluded.

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