The Icelandic Fintech Landscape

Fintech is a term that stands for technology-based financial companies. The financial sector has embraced technology very quickly and many financial transactions that used to be done physically are now done electronically. Banking transactions, such as payments by cheque, are no longer the norm but the exception. This also applies to business-to-business (B2B) and peer-to-peer (P2P) transactions. Mobile apps have been developed to facilitate the instant transfer of money. The Icelandic fintech industry has also kept pace with global developments and it is common for online payments to be rolled out across the country.

Banks in Iceland Have Adopted Fintech in Iceland Easily

Banking services are used by practically every Icelander. Banks have now made their everyday services available to their customers online. This means that banking transactions such as payments, checking account balances and investments can even be done from home. Landbankinn, Islandsbanki and Arion Bank are three major banking institutions in Iceland that have introduced electronic banking, and there are other players in the field that offer similar services. The banks also have mobile apps that their customers can download and use for regular banking transactions. Fintech Island has not been difficult for the public to accept and adapt to. It must be admitted that it has made life much easier for ordinary people to manage their finances. Older Icelanders in particular are spared the trip to the bank and many of the services are available around the clock.

Fintech Startups

Another facet of Fintech Island is the entry of startups into the fintech sector. Advances in technology have meant that companies can offer financial services without having to open offices or branches. One area where fintech companies have recognised the scope is in lending. In the past, you had to visit a lender, usually a bank, and fill out an application form. The bank officer would then check your credit score and creditworthiness and you might find out after a few days whether the loan was approved or not.

Fintech companies have completely changed all that. Now all you have to do is register with one of these fintech companies and enter your personal details in the interactive form on the screen. You submit the online form and it can take just a few hours to receive a message on your mobile phone as to whether the loan is approved or not.

This is made possible by new technologies such as big data, which can match your login details with information available online, including your credit report. The computer - not a human - does the processing and suggests to the credit company manager whether or not you are eligible for a loan.

How Do Fintech Companies Operate?

If you were wondering how fintech companies work and where they get their funding from, the new startup regime has given young entrepreneurs with the right ideas the opportunity to take companies public and invite investors to trust by investing in their business model. There are both organised venture capital firms and angel investors who do due diligence and make the investments. Fintech Iceland has benefited from these startups and will have a major impact on the country’s financial sector in the coming years. It is expected that there will be healthy competition between the banks and these new small companies. They ultimately act as an extension of the banking system as the funds are channelled through the banks.

It is the average Icelander who benefits from these developments and the country reflects the international community at eye level.

For any assistance in Iceland, contact Swapp Agency .