Finland

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English Usage: Finland

As of 2018, out of 88 countries worldwide, Finland had the eighth-highest rating on the English Proficiency Index. It is the sixth-most proficient English-speaking country in Europe. However, English is the mother tongue of less than 1% of the population, and it is not a primary language for mainstream media outlets or in e-commerce concerns in Finland.

ENGLISH USAGE IN FINLAND

ENGLISH PROFICIENCY LEVEL IN FINLAND
  • As of 2018, out of 88 countries worldwide, Finland had the eighth-highest rating on the English Proficiency Index.
  • It is the sixth-most proficient English-speaking country in Europe.
  • The EFI ranks the people of Finland as very highly proficient English speakers. Most Finns can use nuanced and appropriate language in social situations, read advanced texts with ease, and negotiate a contract with a native English speaker.
  • Around 70% of the Finnish population speak English with varying degrees of proficiency.
ENGLISH AS A MOTHER TONGUE OR SECOND LANGUAGE
USE OF ENGLAND IN FINNISH ADVERTISING AND MEDIA
  • The Finns' use of English in their advertising and media generally mirrors the behavior when it comes to speaking the language. Apart from a few international-standard online publications and places that are known to be tourist attractions, websites for mainstream news corporations in Finland (such as Uutiset or Kauppalehti) or popular e-commerce sites (Verkkokauppa and Zalando) load entirely in Finnish and need to be translated.
  • A leading marketing services company that provides e-commerce solutions to businesses looking to expand to places like Finland sell "translation and localization" services to those businesses, signifying that English-speaking web stores may not completely fit in Finland without translation services.
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Digital Banking By Industry: Finland

A deep search in the public domain shows that information on the top industries in Finland that have embraced digital business banking services more is non-existent and media coverage on the specified topic is scarce. The most relevant media mention is: In Finland, electronic invoicing is popular in both Business-to-Consumer (B2C) and Business-to-Business (B2B) segments, for example, almost two-thirds of customers in the country receive e-voices via their online bank for phone bills, electricity, among others. Below are the helpful findings and a detailed methodology on the topic.

USEFUL FINDINGS: DIGITAL BANKING BY INDUSTRY- FINLAND

  • In Finland, electronic invoicing is popular in both Business-to-Consumer (B2C) and Business-to-Business (B2B) segments, for example, almost two-thirds of customers in the country receive e-voices via their online bank for phone bills, electricity, among others.
  • In the B2B segment in Finland, around 80% of invoices are electronic.
  • About 0.12% of total transactions in Finland are by debit cards as compared against an average of 21.3% in the European Union.
  • The use of cash payment in Finland as greatly reduced because many customers, 98%, are using e-voicing and online banking to pay bills.
  • Online Banking is more common in Finland followed by online investment services, online insurance services, and online provision of credit.
  • Based on a survey report by Digital Economy and Society Index (DESI), which examined the usage of internet news, music, internet banking, among others, it could be found that businesses in Finland are the most advanced in Europe as they are more integrated with digital technology and cloud computing.
  • Holvi bank which is one of the premier digital banking service in Finland is used by entrepreneurs, IT consultants, filmmakers, and small businesses, among others.
  • The Electronics Industry, Motor Industry, Chemical Industry, and Forest Industry are some of the biggest industries in Finland.


RESEARCH STRATEGY

We could not find any information pertaining to the research criteria. The following are the strategies we used trying to find information to answer the research questions.

We began our search by looking for information on banking industry reports of Finland. We searched for information on financial industry association sites in Finland like Finanssiala, Finance Finland, among others. Our aim behind this strategy was to see if there is any information on the top industries that use the most digital business banking services in Finland. This strategy was not fruitful as the information found focus on the individual/ personal digital banking rather than business digital banking. We had thought that this strategy may work as organizations like Finanssiala, a Federation of Finnish Financial Services in Finland representing banks, financial companies, among others, would have published such information on their reports.

Next, we searched for the top digital-only banks/EMIs banks that offer digital business banking services in Finland. Our aim behind this strategy was to find the adoption of digital banking services of the digital-only banks by various businesses in Finland. We looked for information on sites like Holvi, Banksoft, among others. Then, we checked their publications and reports in search of their clients (businesses) and see if they are embracing digital business banking services. However, this strategy did not work as most of the reports merely quotes information on statistics of customers, hence, we could not find any business these banks serve. Additionally, we searched for traditional banks that offer both traditional and digital banking services to derive at industries that have/had the highest uptake of digital business banking services in Finland with respect to digital-only banking. Some traditional banks in Finland include banks like OP Corporate Bank PLC, Aktia Savings Bank, Bank of Aland, among others and most of these banks offer digital banking services. However, details on their client segmentation have not been published in the public domain.

Further, we looked for information on the top industries in Finland from sources such as World Atlas. The assumption behind this strategy is that the top industries are most likely to use digital banking services and this might be mentioned in reports, articles, media publications, among others. Using this strategy, we discovered that the top industries in Finland include Electronics, Motor Industry, Chemical Industry, Forest Industry, and Energy. Additionally, we tried to derive information on the adoption of digital business banking services in those sectors through various reports and publications such as Deloitte, PWC, Theseus, Business Finland, among others. This strategy did not work because the information on these sources only focus on the digitization of respective industries, but not specific to digital banking. We had thought that this strategy may work as there may be some mention of industries in Finland that have adapted to digital business banking services with stats which would have been useful to help us know which one has/had the highest uptake of digital business banking services.

Finally, we expanded the scope of research to find the information on the Nordic region. We looked for Nordic banking reports on digital business banking services on sites such as Bof Bulletin, Finans Norge, Finance Digest, among others. Our aim behind this strategy was to find the businesses with the highest uptake of digital business banking services in the Nordic region and provide the same as a proxy for the country Finland. This strategy did not work as the information found is on how banks in the Nordic region along with Finland have adopted digital banking, but there is no general insights on how digital business banking services are used by businesses in this region.

NOTE: We could not find the information pertaining to the research criteria because there are no industry reports or publications that provide information on the digital banking by industry in Finland as most of the information focus on the individual personal banking rather than business banking.


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Digital Banking: Finland

90% of Finns (Finnish people) uses online banking services in paying e-invoices and about half are making digital payments on their mobile devices.

OVERVIEW OF DIGITAL BANKING IN FINLAND

  • A survey from Finance Finland showed 90% of respondents "pay their invoices via online banking services" and about half reported that they are using a mobile device in making digital payments.
  • The total transaction value of digital payments in Finland amounted to $8.94 billion in 2019. The total transaction value of digital payments for the year 2017 amounted to $7.6 billion thus CAGR is at 8.94%. It is expected to continue to grow with total transaction value estimated to reach $12.25 billion by 2023.
  • In 2017, 4.3 million users used digital payment and online banking services and today the number of users increased to 4.7 million. It is expected to continue to increase to 5.12 million users by 2023.
  • Finland's population is currently at 5.5 million which means Finland has 85.5% digital payment adoption.
  • According to Techcrunch, 59% of small businesses and 89% of large businesses use e-invoicing and the adoption rate is much higher compared to the global average of 8.4%.
  • There are currently 160 Fintech companies in Finland compared to just a little more than 100 in 2014. This equates to 9.86% CAGR within the past 5 years.
  • Among the Fintech companies in Finland, the fields of digital and electronic payments and digital financing services platforms have the most number of companies with 32 and 23 companies respectively.
  • Among Finland's digital financing companies, Ferratum, a Fintech that specializes in automated banking processes, leads them with $290.3 million (262 million Euro) of revenue along with top digital payment platform, Ukko with $94 million (24.9 million Euro) revenue.
  • A report from Deloitte noted the only drawback for Fintech startups in Finland is that "the process may cost over a hundred thousand euros" and may take 12 to 18 months for the license to be released. However, local authorities made the effort to improve this by launching an Innovation Helpdesk to support Fintechs.

DIGITAL BANKING EFFORTS OF TOP BANKS IN FINLAND

RESEARCH STRATEGY

The research leveraged data from Finance Finland’s Survey, Statista, Finnish Fintech Landscape, Deloitte, and reputable news sites such as Techcrunch and Fintech Futures. Finance Finland's Survey noted that 90% of its respondents are online banking services and this is backed by Statista that estimated 4.7 million out 5.5 million (85.5%) Finns are using digital payments. I also used the CAGR calculator to compute for the growth of the total digital payment transaction value as well as the growth of Fintech companies in Finland. I also included digital banking initiatives of Finland's large banks because their digital initiatives have an impact not just in Finland but even on the Nordic region as a whole.
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Apple Pay Statistics: Finland

Apple Pay is not a very common payment service in Finland. The payment service accounts for only 1% of mobile payments in Finland. The findings from the research are presented below.

USEFUL FINDINGS

  • There are no detailed statistics on the use of Apple Pay in Finland that had been published as of October 2018. (Source 1)
  • A survey by Paytrail’s found that Apple Pay is a preferred payment method among Finnish users between the ages of 24 and 30 years, as 1% of them use the service. (Source 1)
  • The adoption of Apple Pay in Finland has been hindered by lack of support from Finnish banks. (Source 1)
  • Apple Pay was launched in Finland in October 2017, and the credit cards that work with it in Finland are Nordea, Aktia, and ST1. (Source 6)
  • Apple Pay payments are accepted wherever contactless payments are available in Finland. A "list of supported retailers and more information on Apple Pay can be found on Apple's Finland Apple Pay website." (Source 6)
  • Apple Pay was launched in Germany following the introduction of the "mobile payment service for N26 customers in France, Italy, Spain, Finland and Ireland." (Source 3)

HOW WIDELY USED APPLE PAY IS IN FINLAND

  • Apple Pay represents 1% of the mobile payments made in Finland. Hence, it is not widely used in the country, compared to other payment methods.
  • Apple Pay, Google Pay, and Samsung Pay have a 7% penetration rate in the Nordic countries, and Finland is a Nordic country. This shows that there is a low usage rate of the service in such countries.

RESEARCH STRATEGY

We began the research by going through global statistical sites that could give us useful data on the number of Apple Pay users in Finland, the number of Apple Pay payments by volume in Finland, the number of Apple Pay payments by value in Finland, and the number of merchants accepting Apple Pay in Finland. We found a mobile payments guide and we hoped to extract the required data regarding the use of Apple Pay. However, we only found data on the use of Apple Pay in Finland through N26. This was not useful in finding the required data. We then consulted more sources and found a publication from Deloitte, but it only provided the percentage penetration of Apple Pay, Google Pay and Samsung Pay in Nordic Countries, which was relatively low. This data did not help in finding the required information.

We also consulted news publications in an attempt to find the required information. We leveraged MacRumors in trying to find the required data regarding the number of Apple Pay users in Finland, the number of Apple Pay payments by volume in Finland, the number of Apple Pay payments by value in Finland, and the number of merchants accepting Apple Pay in Finland. However, we could only find data on when Apple Pay was launched in Finland, and the credit cards in Finland that work with Apple Pay. This data was not sufficient in providing all the required information.

We delved deeper and found the QVIK publication. The publication revealed that there is currently no published data on Apple Pay statistics in Finland. This gave us an insight into why information regarding the use of Apple pay in Finland was widely unavailable. Going further, we consulted business statistics databases such as Statista, to see if we could find any insights or data on the required information. The only insight we were able to get from this source was that the penetration of Apple Pay in Finland is low.

After a thorough search, which produced very limited data, we concluded that, according to the QVIK Publication, statistics or data on the use of Apple Pay in Finland is not publicly available.
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Google Pay Statistics: Finland

Information regarding the extent of use of Google Pay was no available. However, we have provided some useful insights below.

HELPFUL FINDINGS

  • Google Pay was launched in Finland in October 2018.
  • Google Pay is currently supported by Edenred Finland Bank, Nordea Bank, Revolut, Danske Bank, and Komplett Bank AS in Finland.
  • Online bank payment is the most preferred payment alternative in Finland with about 40% of shoppers preferring it.
  • The total transaction value for digital payments in Finland is about $8,936 million in 2019.
  • The average transaction value per user for digital payments in Finland amounts to $1,901 in Finland.

RESEARCH STRATEGY

To provide statistics on the usage of Google Pay in Finland, we commenced with a thorough search on official reports, press releases, and the website of Google in Finland. This search attempt only provided insight into the banks that support Google Pay in Finland. Our next approach was to search on credible payment statistical databases such as the Central Bank of Finland, the European Central Bank, among others. While these sources provide information related to digital payments in Finland, there was no data or information specific to Google Pay.

We also searched for articles and expert analysis for any useful data point on the usage of Google Pay in Finland. In the course of our research, we found that Google Pay was launched in Finland in late 2018. We deduced that the newness of the product in the country is likely the reason for the unavailability of data points related to its usage in the country.

With the knowledge that pre-compiled data has likely not been computed, we resorted to triangulation. First, we searched for information on the general transaction value, volume, and the number of users on digital payments in Finland. While we found useful data points such as the total transaction value, there was no information on the market share of Google Pay in the country, probably because of its relative newness compared to other options in the country. Hence, we could not proceed with our triangulation attempt.
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Digital Services Trends: Finland

Digital financing, open banking, digital book-keeping, AI-powered claims processes, and e-invoicing are some five trends in digital services offerings to businesses in Finland. The following section delves deeper into each of the trends detailing what they involve, companies at the forefront of such trends as well as reasons why they are considered trends.

E-INVOICING

  • According to a 2018 insight report, e-invoicing is the most prevalent in Finland than in other countries of the world.
  • According to entrepreneurs in the country, one of the benefits of e-invoicing and the reason as to why it is trending lies within its convenience is saving time and money for businesses.
  • Bo Harald, one of the most influential technologists according to institutional investor and the creator of online banking in Finland, notes that e-invoicing is most popular now that it has ever been in the history of Finland.
  • Start-ups like Zewart are at the forefront in providing e-invoicing software for Finnish small businesses and entrepreneurs.

DIGITAL FINANCING

  • Alternative financing trends in Finland show that digital financing is taking shape in Finland through strategies like crowdfunding.
  • Digital financing is trending owing to the wave of digital transformation in the financial services landscape in Finland.
  • Service providers are keeping up with the pace by being innovative in their offerings to attract business.
  • Recently, the Nordea and Invesdor initiated a collaboration in digital financing for Finnish growth companies.
  • One indication that alternative digital financing is growing is that the size of the "investment-based crowdfunding platform market rose to EUR 56 million" in 2017. The same report projected that crowdfunding would continue to grow further in the next years to come.

DIGITAL BOOK-KEEPING/ONLINE ACCOUNTING

  • In recent years, online bookkeeping systems and services have increased rapidly and the scope has expanded.
  • Digital bookkeeping and accounting are trending because the face of financial administration is changing as technologies evolve including new innovations and software that are automated and reduce the challenges otherwise associated with traditional bookkeeping methods.
  • One of the players in the Finland financial services sector that provided online accounting services is Digibalance.
  • The company specializes in automated online accounting offering services "suitable for micro-entrepreneurs, start-up entrepreneurs, sole traders, and small business owners".
  • Digibalance's "AutoAccount service includes bookkeeping, VAT reports, annual closing, and tax returns".

OPEN BANKING

  • Open Banking is trending in Finland especially as industry experts demonstrate their confidence in the trend. There is an opportunity for businesses to thrive with open banking through open collaborations in financial services providers.
  • Nordea is at the forefront of the open banking trend in Finland. It "released the first version of its open banking portal".
  • Open banking is a hot trend even as industry insights show that it is taking shape and "European banks that exploit Open Banking may generate up to 20% of lending revenue pool by 2020".

AI AND ROBOTIC PROCESS AUTOMATION IN CLAIMS PROCESSING

  • According to research conducted in the Finnish insurance industry, findings show that AI and Robotic Process Automation are some disruptive technologies that have transformed service delivery for businesses.
  • AI and RPA application in the insurance industry is trending as service providers exploit the opportunities that have come with AI technology.
  • Insplanet is one of the insurance service providers that utilize AI to provide an automated claims process for businesses.
  • AI and RPA is a trend because industry experts forecast that its application in the insurance and fintech industry will increase in the next few years. Technologists are in the process of investigating further possibilities with AI and RPA for better services in the financial technology industry.

RESEARCH STRATEGY

To compile the digital services trends offered to businesses in Finland, we reviewed top industry publications and utilized expert opinions and insights to gather the trends. We were keen to only include such trends that are mostly discussed by expert and thought leaders in the industry as well as the one that most featured in top industry publications.
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FinTech Companies: Finland

Midaxo, Zervant, Moni, Silo.AI, Enfuce, Invesdor, FNA, Mash, Riskrate and AlphaSense are 10 fintech companies in Finland who have received funding in 2018 or 2019.

FINDINGS

MIDAXO

  • Midaxo helps M&A teams drive an end-to-end merger & acquisitions from deal sourcing through evaluation, transaction and integration.
  • The company was founded in 2011 and is located in Helsinki, Finland.
  • Midaxo received a Series B funding of $16 million in 2018.

ZERVANT

ENFUCE FINANCIAL SERVICES

  • Enfuce Financial Services acts as an integrator to help different companies in the payment industry to partner up.
  • The company was founded in 2016 and located in Espoo, Finland.
  • Enfuce received a Series A funding of $5 million in 2019.

INVESDOR

FINANCIAL NETWORK ANALYTICS

  • Financial Network Analytics is a deep technology analytic company that enables financial institutions to map and monitor complex financial networks and to simulate operational and financial risks.
  • The company was founded in Finland.
  • FNA received a Series A funding of $5.5 million in 2019.

MASH

  • Mash uses advanced proprietary algorithms, machine learning capabilities, and automated platform to deliver superior finance and payments solutions to customers.
  • The company was founded in 2007 is located in Helsinki, Finland.
  • Mash received a $50 million funding in 2018.

SILO.AI

  • Silo builds AI as a service for industries including central banks, financial institutions, among others. [12]
  • The company was founded in 2017 and located in Helsinki, Finland.
  • Silo.AI received €10 million ($11.1 million) funding in 2019.

ALPHASENSE

  • AlphaSense organizes and semantically index global investment and market research data, allowing clients to be more efficient and outdo the competition and is used by financial firms worldwide.
  • The company is located in Helsinki, Finland.
  • AlphaSense received a Series B funding of $50 million in 2019.

RISKRATE

  • Riskrate helps business owners, and companies in industries like construction, renting, wholesale & retail, transportation and manufacturing tell when their customers will pay.
  • The company was founded in 2018 and located in Espoo, Finland.
  • Riskrate received undisclosed funding in 2018.

MONI

RESEARCH STRATEGY

The following conversion metrics have been used to convert the monetary amounts from Euro to US Dollar (wherever applicable): 1 Euro = 1.11 US Dollar.

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Part
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FinTech Climate: Finland

Finland's business climate is highly favorable to fintech companies thanks to its high technology base, progressive regulatory support, healthy innovation culture, and strong traction in business and consumer fintech adoption. The latest regulations implemented in the Finland fintech landscape are the Second Payment Services Directive (PSD2) in 2018 and the Fifth Anti-Money Laundering (AML) Directive as well as The Act On Virtual Currency Providers in 2019. These are outlined below.

FINTECH FRIENDLINESS

  • According to Helsinki Fintech Guide 2019, Finland offers a great environment for fintech thanks to its high technology base, innovation culture, and digital readiness.
  • Finland also offers the advantage of being a member of the EU and the banking union.
  • According to the report's survey participants, Regulation is the second key challenge for Finnish fintechs next to Growth Management.
  • Regulation was rated as a Low concern by 39% of survey participants, Intermediate by 21%, and High/Very High by 40% of participants.
  • The regulatory climate in Finland is very favorable to fintech companies as the Finnish Financial Supervisory Authority (FIN-FSA) engages the industry in dialogue.
  • Deloitte reported in its 2017 Fintech in the Nordics review that Finland along with Sweden are more progressive than their neighbors in terms of fintech regulation.
  • This is due to Finland authorities' active support of the industry, characterized by the launch of an Innovation Helpdesk to support fintech companies.
  • The platform enables fintech companies to ask questions and request support for their regulatory concerns.

RECENT FINTECH REGULATIONS

  • The latest regulatory changes to the Finland fintech landscape are the Second Payment Services Directive (PSD2) in 2018 and the Fifth Anti-Money Laundering (AML) Directive as well as The Act On Virtual Currency Providers in 2019.
  • The Second Payment Services Directive (PSD2) was first implemented in January 2018 and will require all banks to comply on September 14, 2019 as the final deadline.
  • PSD2 paves the way for fintech players to provide services to banking customers outside their bank. The legislation grants third party access to banking payment accounts of users.
  • It also decreases the responsibility and expenses of consumers for unauthorized use of payment services and usage of common payment cards.
  • The Fifth Anti-Money Laundering (AML) Directive was implemented this March 2019 and requires all cryptocurrency exchanges and electronic wallet providers for virtual currency to register with the Finnish Financial Supervisory Authority.
  • The legislation provides oversight and regulation of fintech players involved in crypto-exchanges, cryptocurrency issuance and crypto deposit.
  • FIN-FSA stated that registered crypto firms will be allowed to legally operate in Finland.
  • The authority also held a briefing for crypto firms in May to help fintech players with the registration.
  • Concurrent with the AML Directive is The Act On Virtual Currency Providers enacted this May 2019.
  • The legislation establishes the Financial Supervisory Authority (FIN-FSA) as the authority for registration and supervision of all virtual currency providers in the country.
  • These include virtual currency exchanges, custodian wallet providers, and virtual currency issuers.
  • FIN-FSA will ensure the reliability of the provider, protection of client money, segregation of client from the provider's funds, marketing, and compliance with AML/CFT regulations.
  • The Act on Virtual Currency Providers was based on the EU Anti-Money Laundering Directive amended in May 2018.

FINTECH LEADERSHI

  • Finland's fintech climate encourages incubation and innovation, with multiple initiatives to push it to the forefront of the international fintech industry.
  • A new initiative by Fintech Finland and Helsinki Business Club this 2019 aims to make Finland a forerunner in the international fintech hub.
  • The 2-year program aims to create a world-class fintech ecosystem and attract foreign companies to move their operations and expertise to Finland.
  • It will also help establish new fintech companies as well as increase profitability and employment in the fintech industry.
  • The initiative is funded by the Ministry of Economic Affairs and Employment, Helsinki's city government, and private investors such as the Finance Finland and Technology Industries of Finland.
  • Nordea, currently the largest bank in the Nordic region, is also mobilizing the fintech landscape in Finland and neighboring territories for greater innovation and collaboration.
  • These will include the Helsinki Fintech Farm with 100 institutional members, Copenhagen Fintech, Stockholm's FinDec and SUP46, and Oslo's The Factory.

BUSINESS AND CONSUMER ADOPTION

  • Helsinki Fintech reports there are over 160 companies in the Finland fintech landscape.
  • The largest categories are Financing (24 companies, revenue €301 million), Financial Software (33 companies, revenue €237 million) and Payments (32 companies, revenue €133 million).
  • These are followed by Investing, Wealth Management, Customer Service & Acquisition, Data & Analytics, APIs & Platforms, Security & Compliance, Insurance, Blockchain, Crytocurrencies and Personal Finance Management categories.
  • All together they employ over 6,500 people, reported more than €340 million in investments and posted €780 million in revenue for 2017.
  • Of the 13 categories under fintech, the payments (€188 million in revenue) and financing (€301 million in revenue) segments demonstrated the most significant growth in recent years, indicating both businesses and customers adoption of fintech services in Finland.
  • Fintech Global also reported that Finland had a record year for fintech investments in 2017.
  • Investments in fintech for the first half of the year alone surpassed total investments made in 2016, reaching $24.6 million.
  • Since 2014, Finland's fintech sector has also gained strong traction with more than 53 deals worth over $80 million.
  • Payments & Remittances was also noted as the largest sector within the Finnish fintech landscape, thanks to strong performances of P2P payments platforms and companies.
  • Fintech Finland's Chairman of the Board Olli Kiuru pointed out that "Finland has all the prerequisites to become a technological hub for the financial sector. We have strong expertise, a safe business environment and a large number of financial companies relative to population."
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Part
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Registering a New Company: Finland

The process of setting up a new company in Finland is not challenging. Generally, the Finnish authorities are supportive of new companies and offer a streamlined approach to ensure all the legal and regulatory requirements are met. There are a wide range of government services and online resources that are provided free of charge to make the process as easy and as encouraging as possible.

NAME OF BUSINESS

  • The first step in formally setting up a company in Finland, like any other country, is deciding on the name for the new company.
  • Once a name has been decided, it needs to be submitted to the Trade Register. This will enable registration by the Finnish Patent and Registration Office (PRH).
  • This process is streamlined and not complex.

BANK ACCOUNTS

  • It is not difficult to open a business bank account in Finland.
  • There is some variation between banks as to the documents required. 
  • Generally, the company extract from the trade register, the minutes from the decision-making body of the company delegating authority to certain individuals to operate the bank accounts, a copy of incoming and outgoing payments, a summary of the company's operations and details of the shareholders, are all that is required.
  • This process needs to be completed in the bank. It cannot be completed online.
  • If the required information is available, then the process of setting up bank accounts is easy and can be completed relatively quickly.
  • Although the process is not difficult, some less experienced operators may require assistance in getting the required documents together.
  • There are a range of consultancy firms available that can assist in this process. These firms are not overly expensive and serve to minimize any delays that may be caused if the required documents are not available.

START OF BUSINESS NOTIFICATION

  • When you start a new company in Finland, you are required to notify the relevant authorities. This enables you to establish and register your company.
  • This process is not overly challenging and can be done by completing a single form. This form is obtained from and filed with the Trade Register. 
  • It also serves to notify the relevant Tax Administration Registers. The required form is known as a "Y Form".

ONLINE TOOLS

  • If the company is to be a private limited liability company, there are a range of online tools that can assist you in this process. They are easy to use and ensure all the aspects are addressed.
  • These tools are available through the BIS service or My Enterprise Finland.
  • My Enterprise Finland is particularly useful as it has a huge database of online resources available to assist in the process.
  • These resources include the legal requirements, as well as several advisory and educational documents. For a new company, they are an invaluable source of information.
  • The availability of support and the wealth of resources available are indicative of the supportive attitude by the government toward new companies.

LEGAL REQUIREMENTS

  • If the company is going to be a limited liability company, some legal requirements must be met.
  • At least one of the founders is required to be a permanent resident of Finland or have their domicile in the European Economic Area.
  • While this can create challenges for some new companies, there are exemptions to the rules. To gain an exemption, the required paperwork needs to be filed with the National Board of Patents and Registrations.
  • There is a EUR120 fee for making an application of this nature.
  • There is no requirement that the founder is a Finnish national.
  • One thing that may create challenges is the requirement that the documents be filed in either Finnish or Swedish. This has the potential to create difficulties for those not fluent in the language.
  • The only other restrictions in respect of the founders are that they must be legally competent and have not been declared bankrupt.

REGULATED TRADES

  • Certain trades in Finland are regulated. They require a license if you wish to operate in those areas.
  • These trades relate to the serving of alcohol, collection of debts, and security work. The process is not overly challenging and requires the filing of the appropriate paperwork to obtain a license.
  • Certain commercial activities, such as real estate agencies, package travel agencies, and housing rental agencies require registration. Information about the company and the activities it is undertaking are kept in a Register.
  • In most instances, the company is permitted to start business activities before the consideration by authorities of the notification.

FUNDING

  • Many new companies in Finland are eligible for funding to assist them in the initial stages of developing their businesses. The purpose of these grants is to encourage entrepreneurs to set up new companies and businesses in Finland.
  • The Finnish people and government are generally supportive of new companies.
  • A new business operator can receive approximately EUR700 per month for the first six to twelve months. It is important to note that this funding is considered income and is subject to taxes.
  • The process of applying for funding is relatively simple. Applicants need to send their financial plan and a tax debt statement to the “Oma Asiointi” service.
  • If you are applying for funding, it is important not to commence business operations until a decision on the funding is made.
  • To maximize the chances of the new company being successful, a range of services, resources, and courses are available through the local “Oma Asiointi” office.
  • A range of Finnish Enterprise Agencies are available to assist with this process and to ensure that the correct information is included in the application.

THE FINNISH CULTURE AND BUSINESS ENVIRONMENT

  • Finland is extremely supportive of new companies. Many articles list the ease of starting a business and the low cost as being compelling reasons to choose to set up in Finland.
  • Only one type of company, a limited liability company, requires start-up capital. The amount required is only EUR2500 if it is a private venture company.
  • This is in contrast to other European economies, where the start-up capital is significantly higher.
  • Germany requires starting capital of EUR25,000. Italy requires EUR10,000, and Sweden requires EUR5,000.
  • When Nokia failed, the effects were felt by the Finnish economy. At one stage Nokia had been responsible for 4% of the Finnish GDP.
  • Now the failure of Nokia is seen in many quarters as a positive as it saw thousands of ex-employees flood the start upmarket.
  • As a result, Finland is experiencing unprecedented growth in this area. It is the ideal time to be starting a business in Finland.
  • The Finnish market is not one of cut-throat competition. It is supportive of new companies and ideas.
  • Culturally, the Finnish people have a strong work ethic and good attention to detail. They present as the perfect workforce.

RESEARCH STRATEGY

We extensively searched a number of industry publications, articles and legal papers to determine how to start a new company in Finland. These sources provided us with an overview of the legal and regulatory process. They also enabled us to determine the required paperwork and processes that must be completed. We reviewed a wide range of government and local business consultancy websites to determine the current business climate, the receptiveness toward new business and the resources that are available for a new company.

Finally, we considered the process of setting up a bank account. We reviewed the information that the various major banks make available as to the documents required and the process of obtaining these documents. We also reviewed various industry publications to determine the support and assistance available to a new company in completing this process.
Part
10
of twelve
Part
10

Co-Working Space: Finland

There are four major co-working space providers operating in Finland. They are UMA Workspace, Village Works, Kenno Lounge, and Regus. Regus is the largest provider with 20 locations in Finland.

CO-WORKING SPACE PROVIDERS IN FINLAND

RESEARCH STRATEGY

To identify the number of major co-working space providers in Finland, we first examined the locations listed on co-working databases such as Coworker, CoworkBooking (Helsinki and other cities), and Coworking.Coffee. As these databases include thousands of co-working spaces across hundreds of countries, it is assumed that they would provide a comprehensive list of active locations/providers in Finland. The website of every provider listed on these databases was examined to identify the number of co-working spaces that they operate. Among the 20+ providers examined, only UMA Workspace, Village Works, and Kenno Lounge operate co-working spaces in three or more locations in Finland.
To ensure that every popular co-working space provider in Finland have been examined, we next conducted a press search for articles that talked about co-working in Finland. The articles published by EU Startups, Helsinki Business Hub, and Valuer talked about the best co-working spaces in Helsinki, Finland. It is assumed that they focused on Helsinki as the city is known for being one of the co-working hotspots in Europe. The majority of the providers considered the “best” were already listed in the databases mentioned above. Among the additional providers examined, only Regus operates co-working spaces in three or more locations in Finland. Other operators such as Startup Sauna, Spaces, and others operate only one or two locations in Finland.
Lastly, we examined some of the largest co-working companies in the world or Europe that were not listed in the databases and articles mentioned above. We have assumed that global players similar to or larger than Regus may also operate in Finland. However, we have discovered that global players such as WeWork and Servcorp and Europe-based co-working space providers such as Talent Garden and Silver Square do not operate any location in Finland.
Part
11
of twelve
Part
11

Business Statistics: Finland

Over half the businesses in Finland are sole traders or equivalents and nine out of ten businesses have less than 10 employees. There were 34,349 new businesses started in Finland in 2018.

FINDINGS

  • Proportion of businesses that are sole traders or equivalents: 53.11% (2016)
  • Proportion of businesses with less than 10 employees: 91.17% (2016)
  • Proportion of businesses with less than 250 employees: 99.75% (2016)
  • Proportion of businesses with less than EUR 40 million in revenue: 99.63% (2017)
  • Number of enterprise openings in 2018: 34,349

ADDITIONAL INFORMATION

  • The number of enterprises in Finland grew at approximately 1.6% CAGR in the period 2005-2014.
  • The birth rate of enterprises in 2016 was 6.9%.

RESEARCH STRATEGY

The information for this research was derived from the Statistics Finland and OECD websites. As the data provided by Finland Statistics indicates the number of enterprises generating revenue over and under EUR 40 million, we have used the same. The proportion of businesses generating revenue under EUR 40 million is 99.63%. The proportion of businesses generating revenue under EUR 50 million is likely to be upwards of 99.63% and not likely to differ significantly.

As the data obtained from Statistics Finland and OECD websites are not shareable, we have provided screenshots of the non-shareable data we obtained from these websites. Screenshots of the data of the OECD excel file (Fig 6) from which we extracted the percentages of businesses with less than 10 employees and less than 250 employees have also been provided. The screenshot document contains all the statistical data obtained from these databases.

CALCULATIONS

Proportion of businesses that are sole traders or equivalents

Number of enterprises with zero employees: 153,820
Total number of active enterprises: 289,631
Therefore, the proportion of businesses that are sole traders or equivalents: 53.11% (153,820/289,631)

Proportion of businesses with less than EUR 40 million in revenue

Number of businesses with revenue between EUR 40,000,000 and 199,999,000: 850
Number of businesses with revenue of EUR 200,000,000 or more: 233
Total number of active enterprises: 289,631
Therefore, the proportion of enterprises with less than EUR 40 million in revenue: 99.63% (1- ((850+233)/289,631))

Number of enterprises opening in 2018

Number of enterprise openings in Q4 2018: 7,745
Number of enterprise openings in Q3 2018: 7,965
Number of enterprise openings in Q2 2018: 8,485
Number of enterprise openings in Q1 2018: 10,154
Total number of enterprise openings in 2018: 34,349 (7,745+7,965+8,485+10,154)
Part
12
of twelve
Part
12

Challenger Digital Banks: Finland

Holvi, Revolut, and N26 offer digital challenger banking in Finland. The Finnish banking market is dominated by four large banks that have over 81% of the market.

HOLVI

  • Holvi was founded in 2011 as a private company, and launched in Germany in 2016. They operate in Germany, Finland, and Austria. From 2017 to 2018 they saw year-on-year growth of 60 %.
  • Holvi has raised 4.3 million Euros over six funding rounds. Their last round was in 2015.
  • The majority, 85%, of their customers are freelancers.
  • Holvi has over 150,000 micro businesses across Europe as customers.
  • They describe themselves as "a simple one-stop-shop for small businesses to collect income, manage expense and get an understandable real-time view of their company finances. New Holvi accounts can be opened in minutes online and Holvi customers don’t need a separate bank account."
  • Holvi was voted the "Hottest Startup in Helsinki".
  • E-Residents may business bank with Holvi.
  • Their website may be viewed here.

REVOLUT

  • Revolut was founded in 2015 and is based in London. In 2017, they reported $15.67 million in revenue, and $17.31 in 2018. From 2016-2017, their revenue growth was 443%. They offer personal and business products. Revolut launched in Germany in 2017.
  • Their market valuation is currently $1.7 billion, with $336.5 million in total funding over 12 rounds, with the last being March 27, 2019. They are a private company and considered a tech unicorn.
  • Revolut has completed a total of 350 million transactions at a total value of $48.9 billion.
  • Revolut states they have 7,000 new accounts opened daily.
  • They have nearly 20,000 businesses as customers, along with 4.5 million customers total. In the UK, they have 1.6 million customers.
  • Businesses may hold, receive, and exchange 29 currencies without charge.
  • Revolut claims they are ten times cheaper than a bank.
  • They have had significant reported losses.
  • Their business customers have an Open API to integrate their Revolut account into their current workflow and stack.
  • Revolut operates in Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.
  • Their website may be viewed here.

N26

  • N26 is a Berlin bank that operates in 20 countries in Europe. They have 2.5 million customers worldwide and were founded in 2013. They are a Late Stage Venture and have raised $682.2 million in funding over seven rounds. Their latest round was July 2019.
  • N26 has a current market valuation of $3.5 billion.
  • In 2017, they generated revenue of 11.24 million Euros which was a 2000% increase over 2016.
  • In late 2018 they had two million customers. They currently have over 3.5 million. Their monthly transaction volume exceeds 1.5 billion Euros.
  • N26 offers banking for freelancers and the self-employed.
  • They operate in Germany, Austria, France, Italy, Spain, Portugal, Ireland, Greece, the Netherlands, Belgium, Luxembourg, Finland, Latvia, Estonia, Lithuania, Slovakia, and Slovenia.
  • N26 is planning to expand to the US in 2019.
  • Their website may be viewed here.

MARKET INFORMATION

  • The "Finnish banking market is dominated by four large groups, which together hold 81.0% of the market"
  • "The biggest group is the OP Financial Group, with 35.5% market share. The group consist of 160 cooperative banks. The second largest group is Nordea with 26.4% market share. In January 2017, the Finnish subsidiary of Nordea merged into the Swedish parent bank and became a branch in Finland. By the end of 2018 Nordea will move its head office from Stockholm to Helsinki and will become the first globally significant institution (G-SIB) domiciled in Finland. Through Nordea’s decision, the Finnish banking sector will grow to over three times the size of its gross domestic product. However, the foreign ownership will drop significantly."
  • "Contactless payments are increasing rapidly. Almost every Finn (97%) has a payment card (debit and/or credit) and 64% of cards include contactless payment facility. In 2015 the share was 22%."
Sources
Sources

From Part 01
Quotes
  • "An interactive visualisation of language knowledge in Europe, based on the European Commission's Eurobarometer data."
Quotes
  • "Besides English, the popularity of studying foreign languages has been falling in Finland for years. The Matriculation Examination Board reports that less than half as many students take secondary education finals in Swedish language studies than before."
Quotes
  • "English is quite widely spoken in Finland, though not quite as prevalent as the other Scandinavian countries. Just under three quarters of Finns report being able to speak English, many of them fluently, which is a very high proportion in itself and compares favorably to most other countries outside of Scandinavia."
Quotes
  • "People speaking some other language than Finnish or Swedish as their native language account for 4.5% of the total population of Finland. The largest language groups after Finnish and Swedish are Russian, Estonian, Arabian, Somali and English."
Quotes
  • "Selling in Finland is worth considering for many international ecommerce sellers. A well thought out international sales strategy should help you overcome the initial burden of translating and localizing your online store."
From Part 03
Quotes
  • "According to Finance Finland’s (FFI) 2017 survey 'Saving, borrowing and paying in Finland', more than 80% of users aged 65–74 years usually pay their invoices through their online bank. Even among the 75–79-year-olds, nearly 60% use online banking. The figure has been growing consistently throughout the observation period, which began in 2007."
  • "The results of the 2017 study were similar for Finns as a whole. Of all respondents, 90% said they mainly paid their invoices through online banking services. About half reported using the services on a mobile device either primarily or as a secondary option."
Quotes
  • " In Finland, FinTechs have reported that the process may cost over a hundred thousand euros and also last over a year. The reason for such a diligent process is that in the Nordics, FinTechs are expected to comply with the same regulations as the incumbents, if the nature of their business is comparable, regardless their operative scale."
  • "“Start-ups seeking for an investment firm license in Finland should be prepared to invest at minimum some tens of thousands of euros and 12 to 18 months to get a license.“"
  • " Perhaps the most practical, recent example about the authorities trying to actively support comes from Finland where the local authority launched an Innovation Helpdesk to support FinTechs. The companies can call or set up a meeting with a staff member from the helpdesk in order to get regulatory support."
Quotes
  • "The market's largest segment is Digital Payments with a total transaction value of US$8,936m in 2019."
Quotes
  • "According to TechCrunch, 89% of large businesses and 59% of small ones use e-invoicing, which compared to a global average of 8.4% is quite astounding. Much of Finland’s tech revolution can be owed to workers rising from the shadows of Nokia, and it has an extremely influential gaming sector, adding to its rank as one of the top five innovative countries in worldwide, as judged by Bloomberg. "
Quotes
  • "Under the agreement, which is set to last eight years with an optional two-year extension, Evry will provide Handelsbanken its complete suite of Software-as-a-Service (SaaS) core banking and payment solutions, reaching both corporate and private banking customers."
Quotes
  • "Three Finnish banks – Oma Savings Bank, POP Bank Group, and Savings Banks Group – have opted for a new shared core banking platform, Temenos’ T24 Transact."
  • "Temenos and Cognizant are collaborating on a Banking-as-a-Service platform that will initially be made available to clients in Finland with plans for further expansion into the Nordics. The two parties describe the offering as “efficient, agile and cost-effective”."
  • "Once implemented, the new software “is expected to yield exceptional operational efficiencies and faster time to market” for the three Finnish banks, Temenos states."
  • "Once the project is completed, more than 10% of Finnish banking deposits and loans will be managed by the new platform. "
Quotes
  • "Nordea has connected APIs to its production system and made its open banking live in Finland. During the autumn, Nordea’s open banking team worked together with more than 1,000 external developers, who tested and gave feedback on the open APIs and associated services. With that all complete, Nordea says it’s now the “first Nordic bank” to offer pilots access to customer data."
  • "According to Nordea, introducing selected pilot participants to customer data in this limited way will enable it to work with the third parties and continue to receive their feedback and improve the services. More selected third parties will, on a rolling basis, be included throughout 2018."
  • "Pilot data is currently limited to its Finnish customers, but will “soon be expanded” to include customers throughout the other Nordic countries."
  • "Nordea, and not us, adds that its Open Banking Developer Portal has been shortlisted for the Banking Technology award for Top Digital Innovation, 2017. The awards ceremony is on tonight (13 December) in London."
From Part 08
Quotes
  • "(p.9) In Finland, the FIN-FSA not only issues rules and guidance, but also engages all parties in a dialogue. This makes Finland a favorable fin‐ tech platform inside the EU."
  • "(p.26) The regulatory response to fintech has taken many forms. In Finland, the most recent regu‐ latory changes relate to the implementation of the Second Payment Services Directive, PSD2, and the Fifth Anti-Money Laundering Directive, AML Directive."
  • "(p.6) More than 70 per‐ cent of the active fintech companies were founded this decade, and the most significant growth in recent years has been in the fields of payments and financing. Out of 127 companies, that reported revenue in 2017, 61 generated profit."
  • "(p.24) Nordics' largest bank Nordea is utilizing various collaboration tactics to deliver the best to their customers."
  • "(p.9) Key Challenges for Finnish Fintechs Regulation Low - 39% Intermediate - 21% High/Very High - 40%"
Quotes
  • "Fintech Finland and Helsinki Business Hub launched a new program to boost the financial technology industry in Finland, and to promote the country’s capabilities in becoming an international hub for fintech development and innovation. "
  • "The program aims to bring together all the key players into a tight ecosystem, and invite foreign companies to discover new business opportunities."
  • "The goal of the two-year program is to create an internationally renowned fintech ecosystem, support the establishment of new fintech companies, increase the profitability and number of jobs of the fintech industry and attract foreign companies and their centers of expertise and innovation to Finland."
  • "“Finland has all the prerequisites to become a technological hub for the financial sector. We have strong expertise, a safe business environment and a large number of financial companies relative to population”, explains Olli Kiuru, Chairman of the Board of Fintech Finland."
  • "The program commences by creating a growth strategy for the Finnish fintech industry. Awareness of the Finnish fintech expertise will be promoted through organizing global and local events and sharing topical information through a new digital fintech portal."
  • "The project is funded by Ministry of Economic Affairs and Employment, the City of Helsinki and private investors, including Finance Finland and Technology Industries of Finland."
Quotes
  • "(p. 40) Perhaps the most practical, recent example about the authorities trying to actively support comes from Finland where the local authority launched an Innovation Helpdesk to support FinTechs. The companies can call or set up a meeting with a staff member from the helpdesk in order to get regulatory support."
  • "(p. 40) Despite the regulation in Sweden and Finland being more progressive than in their neighbouring countries, the relationship between the regulators and industry it is still a far cry from being a collaborative one that supports innovation and growth in the sector."
  • "(p.18) Sweden has a dominant role providing local financing and competence for companies due to capital rich economy whereas Finland for example has seen a preference for state backed investment from institutions such as Finnvera and Finnish industry investment."
Quotes
  • "​In the future, consumers can use other service providers in addition to their bank to access their bank account information and make payments. This reform will take place as third parties gain access to the payment accounts serviced by banks. "
  • " The reform will also decrease consumer responsibility in unauthorised transactions. The new legislation took effect on 13 January and is based on the EU's Payment Services Directive (PSD2). "
  • "The most important thing is to ensure that these new services are safe for consumers to use. For this reason, the Finnish Financial Supervisory Authority demands that external service providers and banks have a dedicated interface to initiate payment services and access account information. "
  • " "Changing banking systems takes time. If the regulation governing the technical standards proceeds according to schedule, the reform will be complete by autumn 2019", explains Tolvanen."
Quotes
  • "Finland's Financial Supervisory Authority (FIN-FSA) officially began regulating the crypto currency sector on 1 May."
  • "According to law, the authority is now charged with the oversight of all crypto-exchanges, crypto deposit providers and cryptocurrency issuers that operate in the country. From the beginning of the month, all crypto currency-based firms operating in Finland are required to register with FIN-FSA."
  • "In a press release the authority said registration will ensure that crypto-based firms will comply with laws related to a firm's reliability, the holding and protection of client funds, the segregation of a company's money and that of clients, the marketing of services and compliance with Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations."
  • "FIN-FSA is planning to hold a briefing for crypto firms on 15 May at 1:00pm at the Bank of Finland in Helsinki. Among other matters, the briefing will include information on the authority's position on when crypto currency providers need to register, the required steps of registration and will also shed light on the requirements that crypto firms will need to fulfill."
Quotes
  • "The Act on virtual currency providers (572/2019) enters into force on 1 May. In accordance with the Act, the Financial Supervisory Authority (FIN-FSA) will act as the registration authority and supervisory authority for virtual currency providers."
  • "The FIN-FSA will register: 1. virtual currency exchange services 2. custodian wallet providers 3. issuers of virtual currencies"
  • "Registration will ensure that providers comply with their statutory requirements concerning, among other things: - reliability of the provider (incl. fit and proper requirements) - holding and protecting client money"
  • "- segregation of client money and own funds - marketing of services - compliance with AML/CFT regulation."
  • "Going forward, only virtual currency providers meeting statutory requirements are able to carry on their activities in Finland. Virtual currency providers which do not comply with statutory requirements will be prohibited from continuing their business activities, enforced by a conditional fine."
  • "The FIN-FSA will arrange a briefing directed to the sector on Wednesday 15 May at 1–3:30 p.m. in the Bank of Finland's auditorium at Rauhankatu 19, Helsinki. "
Quotes
  • "Finland is establishing itself as a significant player in the Scandinavian FinTech space. Investments in H1 2017 surpassed the total invested in FinTech companies in 2016 and it looks set to surpass the $26.9m invested in 2015."
  • "Finland’s FinTech sector is gaining impressive traction, raising over $80m over 53 deals since 2014"
  • "Four of the five largest deals to Finish FinTech companies were closed in the last five quarters, with WealthTech company VertaaEnsin closing the largest deal to date in the first quarter of 2017. "
  • "The largest sector within the Finish FinTech ecosystem is Payments & Remittances with companies such as P2P payments app Scrooge receiving a total funding of $234.3K since 2014."
From Part 10
From Part 12