Fintech is no longer just the financial sector’s fresh-faced little brother. With its own employer’s union and collective agreement in place, the industry takes another step away from startup territory towards a strong, established position in Danish business life.
Ever since the organization Copenhagen Fintech was established in 2015, the fintech business has been moving at lightning speed. The number of fintech startups has quadrupled from 70 to 280, with 2,300 employees active in 2020. This April, fintech took another step towards making itself an independent and serious business. This was when fintech got both an employer’s union and its first collective agreement.
“Suddenly we have a defined industry with its own employer’s union and agreement, and that is interesting considering where we started in 2015,” says Kent Petersen, chairman of Finansforbundet (Financial Services Union Denmark) and continues:
“I cannot remember a new industry being defined this way since IT, 30 years ago. Therefore, it is quite historic that a new organization is created for startups – even more so because it is in its own vertical.”
Unions have historically been formed to organize employees to push for better conditions. So traditionally, it has been an area of conflict with the employer.
In the case of fintech, both the employer’s union and the collective agreement have been reached through cooperation with Finansforbundet under amicable circumstances, and with the shared goal of creating continued growth.
“It is interesting that an employer’s union and a worker’s union have managed to find such common ground and common interests. Through our ties with Copenhagen Fintech, we have shown great interest in supporting and developing these new companies with an agenda of creating jobs in the long-term. Having a shared agreement that all parties benefit from in place now is nothing less than fantastic,” Petersen says.
It is vital to hold on to the entrepreneurial spirit that runs deep in the industry’s thoughts and DNA and make that visible in the agreement.
Kent Petersen, chairman of Finansforbundet (Financial Services Union Denmark)
The young industry is changing quickly, and he is already seeing areas where the union can support the development. Among others areas like competence training of employees and attracting talent in the long term. But obviously also more classic union work with creating good work environments and reasonable terms on the workplace, so companies can compete from a shared starting point.
“The employer’s union is a shared project. We have the same goals, and we work towards those goals together. We want better workplaces for the employees, and we need to create those together. And it is truly a remarkable example of how a modern interpretation of the Danish labour market model can work,” says Petersen.
Different Terms Than Established Businesses
The new agreement is being implemented at Lunar, P27, and Nordnet, the first members of the employer’s union. “Now we are about to find out if the employees can see the benefit, in a way that will make them sign up as members of Finansforbundet. We are convinced that we need to make ourselves indispensable for employees in the fintech industry and that it needs to be perfectly natural to be a part of our organization,” says Petersen.
Finansforbundet has drawn on its 80 years of experience with collective agreements. But they have also taken the chance to rethink what an agreement should cover when it is applied to a young industry like fintech.
For instance, the options of looser work hours and workplaces in a young startup were discussed, as well as alternative salary models that are not seen in the more established part of the industry.
“I think it is vital to hold on to the entrepreneurial spirit that runs deep in the industry’s thoughts and DNA and make that visible in the agreement. These things need to follow one another, because if not, we risk forcing something archaic on companies and employees, and no one is interested in that,” says Petersen.
An International Milestone
With the employer’s union and the collective agreement, the fintech industry has reached another milestone in its development. The development is unique from an international perspective as well. And Kent Petersen believes this can help profile the Danish position of strength in fintech even further.
“Fintech is stepping out of the shadow of the financial and IT sectors and defining itself as something independent that emerged from close relations, but stands firmly in its own right. It is a beautiful culmination; what was once considered a disruptive and loosely defined industry has not only grown in terms of companies and employees but has its own employer’s union and a collective agreement. It is a development that many have contributed to and that we can all be proud of,” says Petersen.