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Nordea – pole position – FinTech Futures – Satoshi Nakamoto Blog


Nordea: getting ready for a real-time future

Nordea is actively positioning itself for a digital and real-time future. Erik Zingmark, head of transaction banking, explains the bank’s active engagement to ensure its future success.

Central to the bank’s efforts is the replacement of its full legacy stack. This project extends to include accounts, payments and the data warehouse of the bank replacing different stacks with a single integrated platform. “We decided to do this all in one go because it will reduce integration to legacy while implementing the new platform,” explains Zingmark. “Because the business is now lying on a new technology platform we will be able to add to it and future proof ourselves,” he says.

The new platform should be fully operational by 2020 and the banks sees it as part of a bigger journey of simplification – of process and of operations. Being architectured on a single platform means we can add in capabilities on top of it quite easily. Examples are the API platform, PSP and mobile payment capabilities as well as blockchain – all of which are aimed at improving the customer experience and income generation.

To ramp up its digital capabilities the bank acquired Gjensidige Bank in July this year. The acquisition was partly driven by Gjensidige’s digital capabilities and also by the opportunity to consolidate Nordea’s own presence in Norway and create scale. “It was an intelligent acquisition that provides digital capabilities and scale for us – we hope things will be finalised soon,” says Zingmark.

Real-time railway

The bank is also playing an active role in a payment infrastructure project within the Nordic region. It is in a partnership of seven banks all looking to create the “railway” for a real-time payments infrastructure within the Nordic region as whole. “By creating this real-time cross-border infrastructure we can create scale and that allows for attractive unit pricing,” says Zingmark. “We also want to support the growth of the Nordic economies and make us an attractive region for entrepreneurs, start-ups and developers to come and test out real-time payments capabilities within a fully regulated and approved environment.”

He says that the banking community as a whole; banks, regulators and central banks are all fully on board and enthusiastic about this project, inherently complex as it is. “We all know that it’s just not viable to continue to operate in a fragmented and piecemeal way and it’s so encouraging to see the current levels of cooperation and collaboration. This is something to be really excited about,” he says.

Going forward Zingmark thinks that the question will be how banks, fintechs and bigtechs will approach the need to retain the customer interface. Banks have already moved to do this by providing API platforms and as the current “owners” of the customers the battle is theirs to lose.

“Banks know that they cannot survive just by processing transactions and this is why we are hearing so much about eco systems and the platform economy,” says Zingmark.

The question will be, he says, whether the fintechs will opt to collaborate with the banks or take them on entirely. “Only a minority will be truly disruptive and the rest will partner with banks,” he says.

As of the bigtechs, he thinks that they are well aware of the difficulties of operating in a cross-border banking environment and may opt instead to capture value thorough collaborative means. “They can get a lot of what they want without actually being a bank and the intelligent players know this,” he says.


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