Fintech 2025

SWEDEN Law and Practice Contributed by: Robert Karlsson, Helena Rönqvist, Caroline Landerfors and Vilma Slättegård, Magnusson Law

1. Fintech Market 1.1 Evolution of the Fintech Market General Sweden has a thriving fintech market and is considered to be one of Europe’s largest fintech communities. It was estimated in 2021 that there were a total of 509 fintech companies in Swe - den. These include Klarna and iZettle within the payment and transfer category, and Zmarta and Lendo within the capital debt and equity cat - egory, amongst others. Some characteristics of the market that have helped the development of the fintech market are solid banks with strong liquidity, a high degree of digitalisation and a strong talent supply. The Economic Landscape As with many industries, the fintech industry in Sweden has been affected by the war in Europe and its consequences over the past few years. The COVID-19 pandemic contributed to the con - tinued high interest in investing in fintech compa - nies due to the accelerated digital development that took place during that period. In 2021, there was also an increased interest in raising capi - tal through IPOs on one of the Swedish trading platforms. However, the Swedish FinTech Asso - ciation (the “Association” ) stated in their annual report that, although the market was focusing on growth in 2021, during 2022 the demands on profitability increased, and companies were hav - ing issues raising capital. The Association stated that 2023 would also likely be a year of ups and downs for industry participants on the Swedish fintech market, but also that harder times can lead to new innovations on the market. New Legislation The EU has placed great emphasis on promot - ing innovation within the Union. The regulatory

intensity is largely driven by its approach to digital governance, balancing innovation with fundamental rights and fair market conditions. Since 2020, the EU has been working on a digi - tal finance package, which includes legislative proposals on open finance such as a framework for financial data access and modernising the third Payment Service Directive (PSD3), the Digi - tal Operational Resilience Act (DORA) and the new framework for crypto-assets, the Markets in Crypto-Assets Regulation (MiCA). Another important piece of EU legislation that will potentially have a major impact on the Swed - ish fintech market is the AI Act. The Associa - tion noted in its annual market report in 2024 that 73% of fintech companies in 2023 were using AI. The AI Act will be fully applicable from August 2026; however, some parts of the regula - tion, such as the prohibition of AI systems with an unacceptably high risk and the regulation of general-purpose AI, will apply in 2025. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models The Swedish fintech industry includes a wide range of business models. The main areas in which Swedish fintech companies operate, and which currently dominate the Swedish fintech industry, are: • payment and transfer – eg, bill payments, domestic transfers, neobanks, transaction accounts and international transfers; • wealth and cash management – eg, crowd - funding equity, debt investment, execution only, investment advisory, robo-advisory, marketplace, private equity and savings accounts;

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