VP Securities: Focus on the Financial Infrastructure of the Future

The world’s first digital Central Securities Depository, abbreviated CSD, was developed by VP Securities 40 years ago. As part of VP Securities’ focus on the future’s financial infrastructure, it participates in ‘Copenhagen Fintech’ to be inspired by and contribute to early-stage fintechs.

Although not many Danes are aware of this, they are using digital infrastructure delivered by VP Securities when they are trading securities – regardless of whether this is through their own bank or a digital stockbroker.

Being one of the first globally, the company developed the digital infrastructure to conduct trades with securities in the ‘80s. Today, a large number of the 180 employees working at Bryggen in Copenhagen are still IT developers.

“VP Securities is still a tech-company. Our technology is not as modern today as it was 40 years ago, yet, technology is still at the core of our business. We deliver critical financial infrastructure, and we are the only one of our kind in Denmark. Therefore, I hope that we can continue strengthening the fintech environment here in Denmark with our unique business model,” explains Maria Hjorth, CEO at VP Securities.

Although the company has been innovative, it has to maintain technological development to move ahead. VP Securities has acknowledged that it cannot develop everything in-house as the development is simply moving too fast. Therefore, VP Securities has entered a collaboration with Copenhagen Fintech Lab, so they can be inspired by and collaborate with early-stage fintech companies.

“We can help progress the growth in some of these newly founded companies, and they can help progress our innovation,” Hjorth says.

Fintech collaboration bound to be a part of the strategy

A part of VP Securities’ innovation strategy is to be involved in the fintech environment. Here, Copenhagen Fintech is an essential platform for VP Securities. It is a way to meet established organisations as well as startups from Denmark and some of the leading fintech-hubs around the world.

“As part of our strategy, we aim to get closer to organisations that are based on new technology, such as DLT, which can challenge us and be an essential part of the future’s financial infrastructure. We are aiming to do so to get inspired and to investigate the possibilities for joint business development,” Hjorth explains.

The strategy both contains ambitions about collaboration and resources to make them a reality. This is also a strategy that VP Securities’ new owner – the leading pan-European exchange Euronext – follows. Euronext already collaborates with a line of other financial organisations, as owners of the blockchain startup Liquidshare.

“Luckily, our new owner has the same strategy regarding innovation and focus on the fintech environment. And our new owner can make us even more interesting as a business partner as we, to a larger extent, will be able to work across borders,” Hjorth says.

You cannot build everything yourself

But why is it at all interesting for fintech companies like VP Securities Maria Hjorth to keep an eye on what CEO at VP Securities occupies early-stage fintechs? “By now, I believe that almost everyone has realised that with the rapid speed of the innovative development occurring right now, no one can match this development by operating alone. Therefore, it is interesting for the established organisations to tap into an ecosystem because you do not have to build everything from scratch,” states Thomas Krogh, CEO at Copenhagen Fintech.

According to him, for the established organisations, it is all about identifying their own strong and weak sides. When these are known, the established organisations have a good

A collaboration with a fintech startup requires for the early-stage company to understand how a large company functions – yet, very often, the reverse of this is also true, says Hjorth: “When you are a mature company in dialogue with fintechs, you have to quickly announce whether this is interesting or not – they can’t wait forever. We ought to have respect for them being quite a few people, who do not necessarily have much time to establish something if it does not generate revenue.”

starting point for seeking interesting new business partners and technologies, which can affect their business areas.

“While something is core business, there are also many things that established companies, in reality, do not know anything about. Therefore, they have to seek inspiration and concrete partnerships,” Krogh says and continues:

“Everything happens in interaction. The most important prerequisite to success is employing an approach that is open to learning and collaboration – as Maria and VP Securities have been exponents for. VP Securities know what it can, where it comes from, but also its limits. And this is a good first step because if the answer always is that we can do everything in-house, it is difficult to establish a good collaboration.”

Less disruption – more collaboration

For years, the whole startup environment has been marked by disruption: Young university dropouts, who fight to overthrow established companies in outdated industries. However, Maria Hjorth does not solely regard fintech startups and VP Securities as potential competitors.

“We need to focus on those areas, where we are complementary companies. Those areas where both partners can strengthen development through collaboration. If there is a mutual need, we can learn from their mindset and their way of utilising new technologies while contributing to scale their business development,” Hjorth explains and continues:

“The collaboration with Copenhagen Fintech allows us to meet both Danish and international startups that are working with financial infrastructure, and invite them to our offices to learn about their experiences and business models. We obtain inspiring insights, and we can learn a lot by how they function, how they scale, and by the speed at which they are capable of launching new products and services. As the only CSD participating in this ecosystem, we hope to strengthen the network with our business model and experiences.”

"If there is a mutual need, we can learn from their mindset and their way of utilising new technologies while contributing to scale their business development."