After recently obtaining the green light from the CSSF, the Danish fintech Banking Circle is moving to the Grand Duchy to launch its next subsidiary.
by: Marc Auxenfants
photo: Banking Circle
featured: Anders la Cour, founder and CEO of Banking Circle
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It is difficult for a European financial player based outside the Euro zone to offer its services to the rest of the EU. Specializing in international payments, the Copenhagen-based Banking Circle quickly saw the limitations. Launched in 2015 by Saxo Bank, the startup developed a digital platform for real-time money transfers on behalf of electronic payment players. Its activities include initiating the relationship with the purchaser’s bank (consumer and merchant), and the beneficiary of the funds as well as the monitoring of settlement and clearing operations.
The fintech also offers account management, loan management, compliance and risk hedging services. “We believe in financial inclusion. We are therefore positioning ourselves outside the traditional, conservative transaction channels with complex and costly regulations,” explains Anders la Cour, one of its founders.
Within a few years, the company has grown rapidly. In 2016, its CEOs entered the banking business. However, pitfalls have been twofold: Denmark, which preferred to keep its Danish krone when the euro zone was established in 1999, is excluded from a European money market, which brings together 19 Member States and 350 million consumers, and had a cumulative GDP of 13.5 billion euros in 2018. The fintech has since been trying to find a solution, both to reach these potential customers and to reduce its exchange risks and costs.
“We believe in financial inclusion. We are therefore positioning ourselves outside the traditional, conservative transaction channels with complex and costly regulations.” – Anders la Cour, Banking Circle CEO
The green light
Banking Circle decided to look for a new host country with an internationally recognised regulatory framework. Surprised by Brexit, they chose Luxembourg. At the beginning of 2017, Anders la Cour and his family emigrated to the Grand Duchy. He quickly contacted the Commission de Surveillance du Secteur Financier (CSSF) to obtain his banking licence and went on to set up the London and Munich branches, which has kickstarted cross-border payment activities.
In September 2018, Banking Circle was taken over by EQT, a Swedish investor, among others. With a 150 employees and a managed payment volume of EUR 60 billion, it is difficult to keep the startup label. The founder of Banking Circle prefers the status of fintech which he believes is more in line with the financial institution’s DNA.
Last February, the Luxembourgish subsidiary finally received its banking visa. Officially inaugurated in the presence of Finance Minister Pierre Gramegna last Thursday, this subsidiary has become the group’s headquarters. It has 50 employees, mainly bank employees and some IT staff. The head office in Copenhagen which houses the group’s developers has now become a branch. Just recently approved, this fintech which claims current annual payment volumes of 130 billion euros, is already looking to expand to the United States and Asia.