Interview with Mark Højgaard, Coinify Co-founder and CEO
Coinify is an established global virtual currency player actively offering solutions in Europe, Asia and other regions. Incorporated in 2014, the company is backed by Nordic Eye Venture Capital, SEED Capital Denmark, SEB Venture Capital and Accelerace. Coinify.com’s platform offers the following blockchain currency trading and payment processing services: individual traders can buy and sell blockchain currencies; merchants and PSPs can accept blockchain payments in 15 currencies and receive payouts in fiat currencies; and institutional traders and large customers can use Coinify’s corporate brokerage services.
Nordic Fintech Disruptors caught up with Mark Højgaard, Coinify’s Co-founder and CEO, to discuss the present and future of the fintech sector in the Nordic region.
Fintech Disruptors: Mark, your company has grown rapidly since its inception four years ago. Can you say a bit about the current challenges you’re facing – and where you think the market is headed?
Mark Højgaard: The biggest challenge facing cryptocurrencies has been the lack of understanding in the traditional financial services sector, and the perception that cryptocurrencies are closely linked to illicit activities. However, as more use cases appear, professional corporate and institutional investors are entering the market.
Outside the cryptocurrency area, we are seeing the gradual fragmentation of payments and financial services which will come to be seen as the industry’s defining characteristic in the next few years. Although some blockchain-based services remain outside the ambit of regulation, these services are targeting payments and lending markets. We predict that you will soon see the advent of “payless payments”, where consumers receive goods and payment happens automatically – for example, in retail locations. This already happens in parts of Asia, where China’s Wechat is offering a new, unified system which we believe will heavily influence the future of payments in Europe.
Fintech Disruptors: This year, our research focuses on “success factors” – can you tell us what makes for a successful fintech start-up?
Mark Højgaard: Success in fintech needs two ingredients: first, the ability to solve a problem and second, the ability to execute rapidly. There are a lot of great ideas out there, but the real challenge is how to execute, distribute and scale your solution rapidly. And that applies as much to traditional banks as to fintechs. For instance, ApplePay is still struggling to establish itself despite its strong brand and the money invested in the product: on the other hand, Klarna – a new entrant -- offers consumers a better shopping experience by keeping things simple and pioneering payment after delivery, which results in much higher conversion rates. It’s also worth noting that innovation at speed is tough for traditional players – and even a challenge for fintechs, who need to keep innovating.
Fintech Disruptors: Regulation is obviously another area that’s changing fast for blockchain-based firms like yours?
Mark Højgaard: The European Union has just taken a significant step towards improving the regulatory environment in our sector with the newly-approved 5th Anti-Money Laundering Directive. This Directive mandates that financial services authorities across Europe must provide oversight for cryptocurrency exchanges and wallets. Nonetheless, there’s no doubt that applying traditional regulatory frameworks to the blockchain industry is a huge challenge.
We have been instrumental in assisting with the new AML directive which covers cryptocurrencies, and have been working with governments to help clarify matters and give regulators better perspective. However, there’s no doubt that regulation in the blockchain industry is still at an early stage.
Fintech Disruptors: Finally, as we look ahead to the rest of 2018 and beyond, what do you see as the emerging trends and opportunities for fintechs – and do you see any threats?
Mark Højgaard: As discussed above, I think we’ll see increasing regulation for blockchain-based firms, as well as a trend towards more mergers and acquisitions in the sector, especially between fintechs and established FIs. I think we’ll also see the emergence of more fintech unicorns. As for trends, we’ll see cheaper and faster payment technologies, backed up by massive data arrays and the AI power to interrogate these arrays. In the next twelve months, we’ll also find out whether blockchain is going to be a truly disruptive technology or be embraced as part of the evolution of the traditional financial services sector. As for threats, we may find that the disintegration of existing financial services which I spoke of earlier itself becomes a threat, especially to larger, more established banks.