How Enable Banking and Orka Ventures Are Pioneering Open Banking Innovation in Iceland
TL;DR
While Europe has surged ahead in Open Banking innovation, Iceland was once lagging, despite clear demand from consumers and businesses alike.
Enter Orka Ventures, ready to shake things up. They recognized a unique opportunity to bring modern financial services to Iceland’s underserved market. Partnering with Enable Banking, they didn’t just wait for change—they helped build it. Together, they worked alongside Icelandic banks to launch the country’s first-ever Open Banking APIs. Today, these APIs are at the core of Orka’s cutting-edge financial products, designed to meet modern needs while delivering enhanced risk decisioning and personalization.
Who Is Orka and What Do They Stand For?
Orka Ventures is a fintech holding company focused on the Nordic and CEE markets. Specializing in consumer loans and related financial services.
Orka is on a mission to bring financial inclusiveness to underserved customers and to reduce the borrower's risk of overextension by adopting process automation and automated risk assessment.
“Orka Ventures' goal is simple: to provide fair, easy, and sustainable consumer financing to clients who are often excluded from lending or saving options." Ondřej Šmakal, CEO at Orka Ventures.
The partnership between Orka Ventures and Enable Banking has been a game-changer, driving Open Banking innovation in Iceland and beyond.
What Is the Icelandic Opportunity?
Given Iceland’s population of just under 400,000 people and its small market size, it’s no surprise that the country is often overlooked as an investment prospect by big financial institutions.
However, Orka Ventures didn’t make that mistake. Orka Ventures spotted a significant opportunity in a market that’s experienced consistent and rapid growth for over a decade, with an unmet need for financial inclusiveness and tech-enabled financial services.
Iceland’s population is not only growing but becoming increasingly diverse, thanks to a significant influx of international talent. Population growth rates accelerated in 2022 by a record annual rate of 3.1%, and projections now indicate that Iceland's population will likely grow to 500 thousand people in the next 20 years. Such growth will inevitably accompany an increased demand for financial services that cater to modern needs.
The main contributor to population growth is likely to continue to be an increase in international talent. The number of residency permits issued in Iceland increased by 46% between 2021 and 2022. Expats now make up 15% of the population, with people from other European countries making up the largest group.
This population growth, coupled with a strong demand for tech-enabled financial services, presents a perfect opportunity. Consumers are hungry for mobile-first, secure, and competitively priced solutions, and Open Banking APIs are key to delivering these products while safeguarding privacy and transparency.
Is Icelandic Banking Ripe for Disruption?
Iceland offers a good standard of living, high GDP per capita, and a strong, stable economy. These factors, combined with strong digital adoption rates, have historically created a positive environment for financial innovation.
The Financial Supervisory Authority of Iceland (FME) also supports the sector by promoting stability while allowing technological advancements, making the regulatory environment relatively conducive to fintech innovation.
Nonetheless, the banking sector in Iceland has been dominated by three legacy banks with little differentiation in services. Competition in banking was practically nonexistent. These factors have created an environment where innovative and status-quo-challenging fintechs can grow and thrive.
How Enable Banking Is Helping Orka Innovate With Open Banking
Since partnering with Enable Banking in 2021, Orka Ventures has been at the forefront of Open Banking innovation in Iceland. When they began, Open Banking connectivity in the country was nonexistent. Icelandic banks were only just beginning to build APIs, and the infrastructure needed for seamless data sharing didn’t yet exist. European banks, let alone aggregators, couldn’t connect to allow for the fast and integrated flow of Open Banking data.
Orka recognised the demand for open, transparent and secure Open Banking. It conducted extensive due diligence to find a partner that would collaborate with and advise Iceland’s three main banks, linking their APIs to provide the connectivity Orka needed for its innovative services. Orka saw the opportunity for change and found a partner in Enable Banking that could bring this vision to life.
Enable Banking saw the potential and the challenge of a fully integrated Open Banking ecosystem in Iceland. They knew they could offer the infrastructure expertise and experience to make it a reality and so, took a proactive approach, collaborating directly with Iceland’s three main banks. Over six months, Enable Banking provided support and guidance, helping the banks develop their APIs while ensuring full regulatory compliance. At the time, no other provider was offering this level of collaboration, making Enable Banking a true pioneer in the market.
Fast forward to today, and the landscape has transformed. What started as a slow build-up of demand has now become a fully functional Open Banking ecosystem. With the means to meet demand in place, the shift over the coming years couldn’t have been more dramatic. When Enable started working with Icelandic banks, there was little demand for Open APIs. Now, more than 100 third-party providers (TPPs) are licensed to use Open Banking data, and Icelandic users can securely share their bank information with services like those offered by Orka Ventures.
Enable Banking’s Open APIs laid the foundation for a suite of innovative products catering to the ever-evolving needs of the Icelandic market. As Icelandic users can quickly, easily, and securely share their bank account information.
This collaboration has given Orka a major competitive advantage. Thanks to Enable Banking’s Open APIs, Orka’s financial products now feature fully automated creditworthiness assessments and loan disbursements. The secure and transparent access to consumer data allows Orka to make faster, more accurate lending decisions, creating an "information advantage" over competitors.
Looking ahead, Orka is already planning new financial products that will put Open Banking at its core, with further benefits for consumers and businesses alike. And Enable Banking is excited to be at the forefront of this innovation in Iceland.