P27: A Nordic Payments Revolution

P27 has caught the attention of the industry, and has had plenty of publicity since being announced formally in 2018. Modernisation of payment systems within banks has been a relatively recent change. Changes in clearing systems are even rarer and typically focus on adding a new rail such as instant payments or migrating to a new format such as SEPA. So why are the Nordics doing anything by choice, let alone something so radical as P27?

The name comes from the combined population of the four countries who initiated the idea behind P27 - the population of 27 million people of Denmark, Finland, Norway and Sweden already shared much common ground. Furthermore, a small number of banks from those countries combined hold the lion’s share of the market. These banks realised as a result that they would be paying to upgrade each and every system. As a result, these banks—Danske Bank, DNB, Handelsbanken, Nordea, OP Financial Group, SEB, and Swedbank—began to explore an alternative solution, which gave birth to P27.

This Nordic collaboration to create a common clearing system across the region is more interesting than it may first seem. It is not just what is being built, but how, and it could form the blueprint for many other regions as well. For the Nordics, it will drive greater operational efficiency and a world class payment system. But what does this mean for banks and other infrastructures? Celent believes a significant amount, as P27 has many interesting features and perhaps even greater implications.