Financial Crime World

Fintech Accelerator: Copenhagen’s Springboard for Innovation

Copenhagen’s Fintech Lab has established itself as a leading platform for accelerating smaller fintech companies since its inception. The lab has become a go-to destination for startups and scale-ups seeking guidance, investment, or partnerships to propel their growth.

Fintech companies operating in Denmark must navigate a complex web of licensing and registration requirements with the Danish Financial Supervisory Authority (DFSA). Depending on their business model, fintechs may need to obtain licenses for:

  • Payment services
  • Electronic money issuance
  • Banking
  • Financing
  • Investment firms
  • Consumer lending
  • Alternative investment fund management

Governance, Internal Controls, and Risk Management Challenges

Regulated fintech companies in Denmark face significant challenges related to governance, internal controls, and risk management. Smaller and medium-sized fintechs struggle to:

  • Identify the necessary number of employees to ensure segregation of compliance responsibilities
  • Avoid dual roles

Fit & Proper Requirements: A Roadblock for Fintechs

Fintech companies also encounter difficulties in determining whether a given person is deemed fit & proper for a management or board position. This uncertainty can lead to:

  • Prolonged processing times
  • Increased advisor costs
  • Delayed growth

Compliance Risks and Regulatory Uncertainty

The lack of transparency and guidance from regulators creates a higher risk of non-compliance, potentially resulting in:

  • Fines
  • Reputational damage
  • Investment of significant internal resources to monitor regulatory changes and ensure compliance

Regulatory Transparency and Guidance: The Key to Success

To stay at the forefront of international developments, Copenhagen’s fintech industry requires further regulatory transparency and guidance on:

  • Licensing requirements
  • Fit & proper tests
  • Internal controls

This will enable smaller fintechs to operate more efficiently and avoid costly mistakes.

Uniformity in Law Across Borders

Regulatory uniformity across borders is crucial for fintech companies that aim to expand globally. Denmark’s regulators should prioritize harmonization with EU member states to facilitate cross-border business.

Collaboration between Fintechs and Financial Institutions

Fintechs must collaborate with other financial institutions, established players, and Big Techs to maintain an innovative edge in the rapidly evolving financial services market.

Horten: Your Partner for Fintech Success

As a leading law firm in Denmark, Horten has extensive experience advising fintech companies on regulatory matters. Our dedicated team helps clients navigate the complex regulatory landscape, ensuring compliance and facilitating growth. We also engage in constructive dialogue with regulators to support the continued development of Copenhagen’s fintech ecosystem.

Join the Fintech Revolution

If you’re a fintech company looking for guidance, investment, or partnerships to accelerate your growth, join the Copenhagen Fintech Lab community. With Horten as your partner, you’ll have access to expert advice, regulatory insights, and a network of innovators shaping the future of finance.