The fintech startup launched in 2016 and is the first free open banking API in Europe. It now provides connections to all major European banks, growing its customer base threefold in the past six months.
Nordigen’s new business model has also attracted investment from several prominent investors, including Black Pearls VC, Inventure, Highgoal Capital, ID4 Ventures, Superangel, Calchas Holding and angel investors Artis Kehris, Henry Nilert, Gerri Kodres and Riivo Anton.
Speaking about Nordigen’s success, Rolands Mesters, CEO and co-founder of the challenger, explained, “We integrated more banks in the last six months than Tink managed in a whole year. Having less legacy technology to maintain means we can move a lot faster.”
Mesters said that Nordigen is now in a position to challenge Tink and other overvalued industry incumbents still charging for access to bank APIs. Instead of making open banking more accessible, Incumbents are taxing access to data that is free under European banking laws.
He added that some of the large players still use reverse engineering solutions and outdated technology, like screen-scraping, as the default for connecting to European banks. Nordigen is committed to focusing solely on open APIs created by banks. It aims to fix the market inequality by maintaining a freemium model and matching the API coverage of competitors.
“It's time to wipe out screen scraping in Europe. It's expensive and hacky. Banks have built amazing APIs to let people migrate their account information securely and without friction. Nordigen allows developers to connect to these bank APIs for free,” Mesters added.
Open banking marketplace
Currently, use cases for open banking are rapidly growing across a number of industries. The “buy now, pay later” sector has experienced rapid growth since 2020 while the personal finance vertical looks set to disrupt the banking scene further with the launch of 'super apps'. Credit cards and various lending applications have a crucial need for reliable data analysis and insights.
The expansion of open banking allows fintechs to access user data and build better customer experiences. As a licensed Account Information Service Provider (AISP) authorised in 31 European countries, Nordigen’s services are already used by some of the most innovative banks, lenders, and fintechs in Europe.
Nordigen banking analytics
According to reports, the challenger's business model is built on banking data analytics and providing data insights. Following a partnership with Tink and experiencing firsthand having to pay for an API, Nordigen invested additional capital into improving its already robust API platform which enables the challenger to handle the inflow of clients moving away from over-priced open banking data services.
The company has quadrupled the number of API users within four months and has also launched a self-service platform.
Aleksander Dobrzyniecki, Partner at Black Pearls VC said establishing trust between the growing number of online transactions is a significant pain point for numerous industries.
“Nordigen’s experienced team and the world’s first free open banking data hub convinced us to support the company in this round.
“Access to banking data is becoming a commodity and Nordigen is also creating the next valuable layer by turning fragmented financial data into usable information for various types of financial institutions,” he added.
Five benefits of open banking
- Open banking opens products and service providers to a wider ecosystem that can generate new revenue opportunities
- Improves access to customers and provides a convenient, fast, digital distribution to growing marketplaces
- Open banking integrates new digital capabilities from third party providers into a bank’s existing infrastructure. Banks can stay competitive by augmenting their applications without having to build them
- An open banking service is more responsive to customer needs. Surveys suggest 37% of customers believe personalisation is an important factor in deepening their relationship with their bank.
- Open banking enables banks to provide more services to their customers, such as personal financial management, loyalty rewards and financial education.