Nordic challenger bank Lunar has announced a significant development in its business model by transforming its banking services division into a new standalone entity called Moonrise. This strategic shift signals Lunar's commitment to enhancing its Banking-as-a-Service (BaaS) offerings and capitalising on the rapidly evolving European financial technology landscape.
The European BaaS market is forecasted to experience remarkable growth, expected to reach €100 billion by 2030, according to Lunar's internal projections. This reflects a strong market demand for streamlined banking solutions, particularly as businesses seek to integrate advanced technological infrastructures into their operations. Currently, Lunar's Banking Services processes over 10,000 transactions daily, boasting a transaction volume run rate of €5 billion.
Moonrise aims to simplify financial connectivity for payment businesses, providing a seamless operational experience across Denmark, Norway, and Sweden through a unified API. This new venture seeks to assist other challenger banks and fintech companies in overcoming the hurdles associated with entering a market that has historically been dominated by traditional banking institutions.
Ken Villum Klausen, the CEO of Lunar, expressed his vision for Moonrise, stating, "The Nordic market is extremely profitable yet difficult to access. For decades, it has been dominated by the same players operating in a stale system. Moonrise is here to change that. By breaking down these barriers, we enable international fintechs and banks to access the Nordics."
The establishment of Moonrise is intended to allow Lunar to focus on its ongoing success in retail banking while allowing the new entity to concentrate on enterprise payments. Villum Klausen further elaborated on this separation, saying, "By taking the first step towards a dedicated focus through a separate entity, we can sharpen our focus on enterprise payments, scale faster, and ensure both Moonrise and our retail banking arm thrive independently."
Lunar's reorganisation is set against the backdrop of an increasingly competitive fintech market in the Nordics, where legacy banks have held sway for many years. The move to create Moonrise is indicative of a broader trend within the financial sector, where agile fintech challengers are looking to innovate and disrupt based on consumer needs and technological advancements. This separation portends significant shifts in the way banks and financial services will operate, with the potential for enhanced service offerings and increased competition on the horizon.
Source: Noah Wire Services