ARYZE spoke to Maren Dolva, investment advisor at the Department for International Trade, part of the British Embassy in Denmark. She shared with us her experience of helping companies enter the UK market, and what companies should focus on along the way.
As the Danish start-up scene is growing, for different companies the question comes up of which market to expand to next. With many international market opportunities out there, ARYZE spoke with Maren Dolva from the British Embassy to discuss what unique value the UK market has to offer.
Often for Danish companies, the United Kingdom seems a natural ‘next step’ with a lot of opportunities and perhaps low barriers. The English language rarely causes any hardship for Danish companies, and the European cultures are considerably alike. Opportunities, such as a large population of 66 million people to offer your proposition to, access to skilled work force, ease of doing business and home to the financial hub of Europe, make a market-entry appealing.
Fintech opportunities: A supportive government
An open environment to foreign companies is what you will experience in the UK, according to Dolva. Not only does this attitude come from industry incubators, but also the government plays their part by putting incentives in place to attract foreign businesses and technologies. Especially within the financial market, the British government and institutions aim to provide support through financial access, regulation, and policies.
Traditional banks have also been eager to stimulate the development of business and tech and are aware of the industry’s need for some kind of disruption. Different large commercial banks have opened up coworking spaces and sand boxes. Barclays for example, opened up 17 innovation hubs which they named Eagle Labs.
The UK government understands what the banking sector needs and focus on commercializing banking even more. They are open to competition and push forward ‘open banking’ to make information available.
Despite the large amount of opportunities, companies looking to enter the UK market should also be aware of high levels of competition. To take a strategic approach to this competition, Dolva advises companies to also consider looking outside of London. With significantly lower offices rates and wages in other areas, different cities could prove a beneficial choice instead of the highly-demanded capital city. One example Dolva shares is Manchester which is only one-and-a-half hours away from London by train, with access to a whole other section. Many of the British banks have subsidiaries in Manchester and it can be easier to get in contact with these.
Danish companies entering the UK should know their competition and consider their area. Due to the large population, it is also important to have a realistic approach about a roll-out strategy. Businesses should be thoughtful about this, because even though the British customer base is large, rolling out also necessitates a strategic approach.
Culturally speaking, the UK and Denmark are very similar, but still there are some differences Danes should consider when doing business overseas. The United Kingdom knows a more formal approach to things compared to the direct Danish culture. Formality is visible in aspects like communication and corporate behaviour. Politeness and openness are key to overcome these differences and adapt successfully.
For fintech companies especially, there are a few things that need some extra attention, Dolva experiences in her contact with businesses. A simple thing like opening up a bank account seems the most difficult issue for companies entering the UK market. Reporting structures, AML requirements and regulatory aspects can prove quite challenging. The Department for International Trade helps companies work through these processes and successfully establish themselves in the new market.
Areas of investment when entering the British market
When businesses enter the market, they might experience the challenge of retention of staff. While there is great access to talent, companies need to be mindful of retaining this staff. It is therefore very important that businesses put enough incentives in place to keep their employees. Dolva sees that many Danish companies make sure to invest enough in their sales people when opening sales offices in the UK.
Besides investing in a successful sales department, R&D should also be an area of focus, Dolva argues. Many British companies have their own developers and in some cases benefit from R&D collaboration with universities.
The UK is home to three out of the top ten universities in the world, which can offer great value to businesses. There are incentives put in place by the government such as match funding that is available to companies investing money in students. University collaboration becomes therefore an effective way into the market.
With enough opportunities present, the British market proves a strategic choice for companies to expand their operations to. British investors are keen to invest, especially in companies that take advantage of open banking and are highly innovative. These companies are also welcomed by the government who supports innovation and new solutions. When taking the step to enter the British market, the Department for International Trade, as part of the British Embassy, can help companies along the way.