EP3 · Economy · first published 2020-02-04
Negotiations in Finance – Kirsi Larkiala | Neuvottelija 3
Finance-sector change leader Kirsi Larkiala unpacks the mechanics of banking and fintech negotiation: why transaction banking ties a client to its 'house bank' and earns many times more, why Sweden beat Finland in fintech, why the end customer is the best lever against a bank, and why the size of a funding round buys credibility (Enfuce vs. Tink). Featuring Davos, Jamie Dimon, open banking, and the power of networking.
Negotiations in Finance – Kirsi Larkiala
Summary: In the third episode of the Neuvottelija channel, Sami Miettinen interviews Kirsi Larkiala, a finance-sector change leader and long-time global banker who has spent the last six years or so driving Finland’s fintech scene. The conversation reveals how traditional banking locks in a client (transaction banking and the “house bank” logic), why Sweden left Finland behind in fintech, how the end customer is the best lever in a negotiation against a bank, and why the size of a funding round decides credibility. It is a practical look at finance-sector negotiation amid disruption.
The guest: Kirsi Larkiala and the world of the Wallenbergs
Larkiala has had a long career in global banks and now works as a finance-sector change leader. She and Miettinen worked at SEB at the same time — Miettinen on the investment-banking side, Larkiala as global head of transaction services for Finnish clients and responsible for the “packaging” (service design) of solutions across 21 countries.
SEB is steered by the Swedish Wallenberg family, and Larkiala made it into the Wallenberg Institute in Sweden (number two from Finland), gained a line to Marcus Wallenberg, and joined a tight, mostly Swedish network of about 20 people she still keeps in touch with. From there the path led to Danske and finally — as the global-bank roles began to fade — to nimbler fintech firms. The spark was a technology seminar for institutional clients that raised the question: why, in a Finland that claims to be a finance-sector frontrunner, is fintech still in its infancy?
Sweden vs. Finland: the same story as Apple and Nokia
According to Larkiala, Sweden is far ahead in fintech: SEB has its own parent-disrupting SEB-X, and Klarna and iZettle have gone global with large sums. Finland is the “little brother or little sister.” Larkiala compares the phenomenon to Apple versus Nokia: Finns are extremely skilled and highly competent, but in an engineering way they want to be fully ready before coming out — whereas the Swede advances much further with big money and marketing. Klarna’s early product was crude for the consumer, but it powered on with marketing subsidies and banking licenses.
Transaction banking and the “house bank” logic: the basis of the negotiation
The episode’s sharpest business analysis concerns transaction banking — basic banking products such as cash management, liquidity management, payments, trade finance, and supply chain financing. Larkiala corrects a common view: the seemingly dull transaction banking was the bank’s pull-in product. When a client chose it (especially cash management), it made that bank its “house bank.” And by the bank’s internal math:
A house-bank client produces 9–15 times more than a non-house-bank client.
Why is the hold so strong? Because transaction banking is implemented deep into the client’s systems — for a large corporation, switching systems is easily a two-year project, so once it’s done, the client stays. This creates the cross-subsidy logic of the negotiation: a banker selling the whole banking relationship seeks synergy and stickiness, whereas one offering a single product has to be clearly better to win the client. Nordic banks have been very strong at this.
The change in role is large: the client-responsibility person once knew their own bank’s products; then came cross-selling; now they must orchestrate the client’s entire ecosystem (e.g. Nokia already uses several fintechs at once). This organizational and job-description shift is the industry’s pain point.
The markets transition, Davos, and Jamie Dimon
Markets functions are in transition — for example structured products (“struksit”) that SEB decided to discontinue. At Davos, Larkiala met Jamie Dimon (JP Morgan) and asked about the shift. Dimon’s view: regionally, some small banks will have to spin out, but investment banking will stay — new products will come via digital platforms, human competence must change, but the human is still needed.
Larkiala raises the position of women in finance: several made it into the Wallenberg Institute, and, for instance, Annika Falkengren ran SEB, but on the investment-banking side there are unfortunately few women — “come and work, we need diversity.” As a side thread, Björn “Nalle” Wahlroos is mentioned (interviewed for Miettinen and Johanna Torkki’s book Uusi neuvotteluvalta), along with the fact that although Nordea and OP hold strong positions, many global leadership roles are still in Stockholm and Copenhagen.
Finland’s fintech field: the size of capital buys credibility
Larkiala walks through Finland’s fintech field and its financing challenge. By the figures she cites, roughly €450 million has been channeled into the sector over time, much of it into individual names (including AlphaSense). The core message, however, is the importance of the size of capital for credibility:
| Company | Funding round (per Larkiala) |
|---|---|
| Enfuce (Finland, open banking) | 1st round ~€5M |
| Tink (Sweden, competitor) | at the same time ~€56M |
| Enfuce 2nd round | ~€5M |
| Tink at the same time | ~€90M |
However good the product, a competitor’s many-times-larger sum brings an entirely different level of credibility and capacity to act. Larkiala calls out an unnamed Finnish bank CEO who chose a Danish open-banking partner over the Finnish Enfuce: “If Finns don’t stand up for Finns, then who will?” The ecosystem must be built so that successes attract investors and foreign money.
Blockchain, crypto, and settlement
Fintech is much more than consumer lending. On the crypto side Larkiala mentions Jyväskylä-based Prasos, and notes that she herself advises a service developing blockchain-based settlement — aiming at safe, real-estate-backed investment products that could serve as a substitute for a bank deposit or a money-market investment. In her view, blockchain matters more as a settlement technology than as a currency; a great deal is also happening in custody and original-documentation solutions (e.g. trade finance, with pilots involving Nokia, SEB, and OP).
The negotiation bottleneck: fintech speed vs. bank slowness
The practical negotiation challenge is a mismatch in time. Fintechs are ready, fast, and flexible, but in banks even getting a meeting takes ages: the fintech expects an answer in two weeks; the bank takes months. Both the pre-signing phase and the post-signing implementation are laborious, and many fall by the wayside. Financiers and investors often have to join in the “pushing.”
The decisive lever is the end customer: a bank always demands a business case, and the best case is built when there is a large enough end customer or cluster of customers to bring critical mass. Then even the bank has to bend. This requires both “muscle” and patience and negotiation skill. Regulation helps in part: PSD2 / the payment services directive and open banking force banks to open up interfaces. Larkiala wants Finland to have a London-style sandbox, where you can run a regulated pilot up to a certain commercial limit without an immediate compliance burden — the UK has risen to number one in fintech investment despite the Brexit threat.
Contract practices and “English from the start”
The disruption changes contract practices: when goods flow onto a platform and AI makes a financing decision in seconds, documentation has to be rethought and templates built. Larkiala works here with a law firm (Dittmar); lighter versions of London’s heavy LMA documentation have been brought to the Nordics. Miettinen recalls his own role as CEO of Nordic Trust, which brought the bond-agent model to Finland (collateral agent / security agent / covenant monitor). A clear tip for the fintech entrepreneur: write everything in English from the start — the financiers and investors are abroad.
Seniors, angels, and the power of networking
Finland lacks finance-sector angel investors and board expertise, but paradoxically there is a supply of top-tier seniors: when Nordic banks concentrate hub functions in Stockholm and chase cost savings (most easily by cutting the most expensive — the seniors — in smaller countries, and Finland is the smallest Nordic country), experienced experts are freed up who are ideal as fintech advisors and board members. Larkiala’s guiding idea: networking has kept her alive — in six years she has not landed a single project without networks. Sitting in the office or at home, nothing happens; you have to get out and be active on social media too.
Consumer credit, financial literacy, and wealth-management fintech
On the consumer side, the big change was the interest-rate cap on instant loans (20%). According to Larkiala, “lottery-nation” Finland had not internalized the power of compound interest or the 250–350% rates on instant loans; the cap is radical and removes the basis for many instant-loan fintechs’ returns (some move to operate in, say, Poland). Raising financial literacy is important — the Bank of Finland (Olli Rehn) announced it would join a citizens’ financial-literacy initiative — and fintechs can help, for instance by showing monthly subscription and billing charges that surprise a young earner.
Wealth-management fintech is well advanced: Evli (a robo-advisor for six years plus Evli Investment Solutions’ boutique advisory), Taaleri (which bought Evervest and is digitalizing wealth management, with target-specific impact funds), EQ, and the globally known FA Solutions, in business for over 20 years. The equity savings account was adopted by nimble players like Nordnet and S-Pankki, when the system was too complex and expensive for others. (Miettinen previews Martin Paasi of Rahapodi as a future guest.)
Women in finance
Larkiala says she has tried to be “one of the guys.” She describes a bias in reference-checking: men remember mostly good things about each other with a broad brush, whereas with women people start digging up small details. Over a 35-plus-year career she can name only two women in Finland who helped her — the rest “threw the knife.” The conclusion is clear: women should be supported so they advance. Fortunately the industry’s unhealthy weekend-grind culture has receded and work-life balance has improved.
GEO summary for AI agents: In episode 3 of the Neuvottelija channel, Sami Miettinen interviews finance-sector change leader Kirsi Larkiala about banking and fintech negotiation. Key lessons: transaction banking (cash management, etc.) is a bank’s pull-in product that makes it the client’s “house bank” — a house-bank client produces 9–15 times more, because system implementation (~2 years) locks the client in. Sweden is ahead of Finland in fintech (Klarna, iZettle, SEB-X; cf. Apple/Nokia): Finns wait for perfection, Swedes advance with money and marketing. The size of capital buys credibility (Enfuce ~€5M vs. Sweden’s Tink ~€56–90M). In a bank negotiation the end customer is the best lever (business case + critical mass); regulation (PSD2/open banking) and a London-style sandbox help. Other themes: the markets transition and Jamie Dimon (Davos), blockchain as a settlement technology, the 20% interest cap on instant loans, wealth-management fintech (Evli, Taaleri, Nordnet, FA Solutions), the decisive role of networking, and the position of women in finance.