FinTech in Norway : the effect of FinTech on the traditional Norwegian banking sector
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- Master Thesis 
The purpose of this thesis is to investigate the effect of FinTech on the Norwegian banking industry. We investigate the drivers of FinTech, the current and potential Norwegian FinTech market, and the international competitiveness of the Norwegian FinTech movement. We identify nine segments of FinTech within the traditional banking functions Financing, Asset management, Payments and Authentication, and we find the key drivers behind the rapid growth of the FinTech market as changing consumer preferences and technology innovation. Bank customers demand quicker, easier, and cheaper banking than what the traditional banks have offered, and we conclude that the increasingly tech-savvy population is ripe for adopting FinTech solutions. The formation of FinTech startups is facilitated by customized and transparent regulations, access to seed and growth capital, and access to technological and entrepreneurial talent. Through a bottom-up market sizing of the current players in the Norwegian FinTech industry, we find a low FinTech adoption rate in all segments except all-digital banks and Authentication. However, Norway is positively positioned on the drivers of FinTech development, and we forecast a significantly increased FinTech adoption within five years. The incumbent banks are highly aware of the changes caused by technology infusion, and they are open and proactive in developing solutions in cooperation with FinTech startups. We believe the banks have recognized that their strengths lie in IT infrastructure, customer data, capital access and regulatory knowledge, while the FinTechs offer innovation, flexibility and tailored solutions. This has resulted in FinTech having considerable disrupting effects on how banking is done, but has allowed the incumbent banks to maintain important positions. Finally, we have assessed Norwegian FinTech’s competitiveness in the light of world leading FinTech nations. We conclude that while there are several positive trends in Norway, there are significant scale advantages in FinTech development, which diminishes the chances of competing on an international level. Recent attempts at increasing the cross-Nordic cooperation could have positive effects. We also see that although Norway will have difficulties competing internationally, this does not exclude the possibility of individual successes within the FinTech segments.