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Digitalization drives explosion of new financial services

The Stockholm School of Economics and PA Consulting present The Next wave of Fintech, a sequel to the 2015 Stockholm Fintech Report, focusing on the new InsurTech and RegTech segments. The report, which describes and quantifies the Swedish market for these segments, contains valuable insights and recommendations for decision makers at banks, incubators, startup companies, public authorities and investors.

The report reviews development in the Swedish FinTech sector, where the emergence of the two new segments InsurTech1) and RegTech2) is evident. A developed partnership between technology companies in these sectors and financial institutions has led to new, more customized financial services.

“Sweden with its low power structures and the high degree of cooperation has the potential to take the lead to be an excellent place for the growth of InsurTech and RegTech,” says Michal Gromek, researcher at the Department of Marketing and Strategy at the Stockholm School of Economics.

The report shows that investments, partnerships and acquisitions between established financial institutions and RegTech companies for more cost-effective and customized solutions are essential to the survival of the major banks over time.

“One of the most important conclusions that can be drawn based both on interviews and collected data, is that the dynamics between traditional players and startups are very good,” says Magnus Krusberg, Manager for Sweden at PA Consulting Group.

InsurTech – Insurance Technology
For players in the Swedish insurance market, the report provides many causes for optimism. A highly favorable climate prevails between insurance companies and InsurTech startups. Both companies and private customers seek new, more individually adapted and cheaper insurance solutions.

“InsurTech focuses primarily on improving the interface with customers, but also affects other parts of the value chain. The rapid development in connected devices (the Internet of Things) allows insurers to tailor insurance premiums based on customer behavior, creating cost-effective and profitable products and services,” says Magnus Krusberg.

There is also good availability of venture capital. Globally, USD 7.1 billion has been invested in the segment over the period 2012 to 2017. In Sweden, the highest-rated startup company, Bima Insurance, which provides access to insurance solutions to low-income individuals in developing countries, received a capital contribution of fully USD 74 million.

RegTech – Regulatory Technology
In comparison with InsurTech, RegTech remains a relatively immature segment. Increased EU regulation of the financial market over the past few years has generated pressure on financial institutions to streamline their efforts to increase transparency.

“Accordingly, we are seeing rapid development in several areas where RegTech can play an important role in streamlining regulatory compliance work,” says Magnus Krusberg.

Globally, FinTech accounted for sales of USD 13.5 billion in 2016, compared with USD 2.5 billion in 2012, according to figures from CB Insights.

You can download the full report here.

For further information, please contact:
Hanna Flodmark, Communication and Marketing Manager, Stockholm School of Economics,
mobile: +46 (0)70-689 90 15, hanna.flodmark@hhs.se

Pia Kullander, Communications and Marketing Manager, PA Consulting,
mobile: +46 (0)733-10 47 80, pia.kullander@paconsulting.com


InsurTech – Insurance Technology, a subsector of FinTech, builds on the opportunities offered by digitalization and technological innovation to improve and streamline business models in the insurance industry.

RegTech – Regulatory Technology, is a subsector of FinTech, which has been developed in response to increasing regulation of the capital market. The sector utilizes the opportunities offered by digitalization and technological innovation to enable and streamline regulatory compliance for players in the capital market.


About PA
PA Consulting Group is a world-leading management consulting company in the areas of management, innovation and IT. In Sweden, we have established ourselves as a leading adviser in transformation programs in both private business and public administration. Our knowledge and experience range from strategy and design development to implementing solutions. Our assignments involve efficiently managing change processes so that the value of the change is assured. PA Consulting Group employs 2,600 people globally, of whom 330 in the Nordic region, and is active in more than 35 countries.


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