A Value-Driven Recovery: The Nordic Fintech Moment?
“Covid-19 is a litmus test for stakeholder capitalism”
(Klaus Schwab, executive chairman of the World Economic Forum. Financial Times, 25.03.2020)
Let’s start with the obvious and hard-to-ignore facts. A global pandemic is raging, and people and businesses are suffering on an unprecedented scale. That is why I think the quote from Klaus Schwab is very timely to start with. You might think we are talking about recovery before we can see signs of the storm settling – but we need to look beyond the current situation. What is next? Or maybe even more directly. How can we lead the future in the most sustainable way?
Stakeholder capitalism is a system in which businesses are oriented to serve the interests of all their stakeholders. Among the key stakeholders are customers, suppliers, employees, shareholders, and local communities. The purpose is to create long-term value and not to maximise profits and enhance shareholder value at the cost of other stakeholder groups – hence the quote from Klaus Schwab.
Financial services and technology – fintech – play a major role in the many different relief packages being implemented globally and will continue to do so in the recovery phase. The pandemic has really made it quite obvious that we need to think beyond the single and very narrow focus on shareholder value.
Nordic government leaders made a pledge in 2019 to be the most sustainable region by 2030, and according to the Sustainable Development Report 2020 Sweden, Denmark and Finland are the highest-ranking countries on SDG achievement.
Four out of ten companies on the Corporate Knights ‘Global 100 Progress Report’ are Nordic. The first two are Danish – Ørsted and Chr. Hansen. Furthermore, the biggest grouping in the Global 100 is financial services companies – investors, insurers, and lenders are often ahead of the game when it comes to acknowledging where the risks of failing to deal with sustainability issues lie.
The Nordic moment
Obviously, we are biased. But the world can and should learn from the Nordics and the fintech ecosystem. The region is turning into a hotbed for sustainable fintech solutions. But what are the ingredients? A well-functioning financial services industry and technology infrastructure is the foundation. The Nordics is a region of very innovative countries with a deep and cultural-based focus on sustainability.
We are recognised for our Nordic human-centered design thinking approach – dating back to the 1960s. Known as participatory design (or originally co-operative design) this is an approach to design attempting to actively involve all stakeholders – e.g., employees, partners, customers, citizens, and end-users – in the design process. Notice the clear link to stakeholder capitalism.
All of the above creates very fertile ground for financial technology solutions that accelerate the much-needed push towards a sustainable future. This is why you will soon see people from corporations and governments jumping on video calls to learn from and partner with Nordic entrepreneurs. The five Nordic fintech hubs have mapped out all the fintech startups working within the SDG framework. 200 companies are on the first list – many of them delivering parts of the billions of dollars of financing to tackle problems such as financial inclusion, lack of access to capital for small and medium sized enterprises, and for investments in sustainable infrastructure.
In 2020, Copenhagen Fintech Week will zero in on ‘Goal 17’: Partnerships for the Goals. We will be facilitating networking, discussions, and hopefully, a lot of partnerships between a very diverse set of stakeholders. Only together we can make it a value-driven recovery!