A new challenger for Revolut, N26 and Monzo: As Swedish FinTech Northmill gets a banking license
The traditional banking sector has embarked on a significant shift in its operations in a bid to stay updated on the latest technological advancement. However, FinTech companies are still coming in hard on the traditional banking sector. One of these FinTech companies is the Swedish company Northmill, offering cloud-based financial services.
This FinTech company is disrupting the traditional way of banking with its recent acquirement of a banking license from the Swedish Financial Authority and it looks set to commence banking services soon.
Northmill currently provides a series of services with the best among them being its consumer-based product called Rebilla. The service is aimed at helping users save money on interest in an astonishingly easy way. Rebilla is designed to help reduce the interest rates on customers’ debt. After signing up for the service and you review the offer presented to you, you can start saving money once you accept the offer. Rebilla pays off the current debt and customers have to repay it back at a lower interest rate. The newly acquired banking license will allow the company to expand its suite of services to include payment and card transfers as well as saving accounts.
Margareta Lindahl, Northmill’s Chairperson, emphasizes the vision of the company in her address. Lindahl pointed out the growth of the present insurance and credit offering services of the company, which had expanded organically to reach over 200,000 customers. She also highlighted the increase in the firm’s services with its recent launch of ‘Rebilla Reduce’ aimed at reducing the present interest of current credits for customers. She buttresses the point that the ability to operate as a bank will give the company the necessary tools to move to the next level and bring about real progressive change for its customers.
The firm has applied for a banking license as far back as 2017. After being granted the banking license following a two-year negotiation with the Swedish Financial Supervisory Authority, the requirement before commencing operation is that Northmill must have at least €5M of initial capital. Additionally, the capital base of Northmill must not fall below the initial capital. Furthermore, the company must have a capital buffer to reduce the chance of going below the capital requirement. Lindahl acknowledges the responsibility it takes to sustain their banking license but the reward is nevertheless satisfying.
Having attained a banking license, Northmill joins the ranks of several other ambitious European FinTech firms. The company will face competition from rivals like Revolut, N26, and Monzo also offering banking services to its users. Germany based N26 valued at €2.38B started operations in 2013 and the aim of the company is to ease your financial dealings with its ‘All-in-one’ banking offering zero hidden charges.
Also in the running is the London based Monzo offering only a digital banking service, the company recently raised a fund of €126M in June with the company valued at more than €2.2B. Another UK competitor Revolut provides several banking facilities such as mobile-based current accounts, which enable you to transfer and hold, and exchange money minus additional charges. Additionally, Revolut allows users to exchange cryptos.
Northmill’s unique offerings of customer-focused products could turn the power wheel firmly away from the major industry players. Northmill Rebilla has been touted as a major disruptor of the financial market with its lower interest rate loan repayment scheme. The industry players like Monzo, N26, and Revolut will certainly be on the watch for the latest challenger in the market. It is still earlier days to say if they will be worried about the presence of Northmill in the banking arena, but its progress is something they will certainly want to keep an eye on.