Hello everybody and welcome to Nordnet, and more specifically, welcome to our Capital Markets Day. Hope you're as excited as we are about this event. We have a full day ahead of us with a lot of talented people from Nordnet that will take you through most aspects of our business. Again, much welcome. Here we go.
Nordnet was born in 1996 from an idea as simple as it was revolutionary to take trading out of bricks-and-mortar branches and offer it online, giving ordinary people the power to grow their savings on their own terms. Customers loved it, the traditional banks hated it. Through the years, we grew outside Sweden to help customers save better in Denmark, Norway, and Finland as well, living up to our name as a digital platform for all the Nordic countries. We added derivatives, international markets, and built a fund supermarket. We launched a modern private banking offering digital advisory services, and we're the first bank in the Nordics to take trading from desktop to mobile. We paved the way for flexibility and cost efficiency with intention savings and created the unique investment community, Shareville. The list goes on.
All accessed on our constantly evolving platform where usability and simplicity is at the core. We're always transparent, no hidden fees or complexities in the fine print. First and foremost, everything we do, we do to drive better returns for our customers. We're as passionate about them as we are about our company or savings in general, because what is good for customers is good for us. We continue to challenge structures and enable growth by building the best platform for savings and investments. Our founding principle of democratizing savings and investments drives us to this day. If there's one thing we've learned, it's this: becoming rich is not a goal in itself. It's about independence, security, realizing your dreams, and taking control of your financial future.
Welcome back. My name is Johan Tidestad. I'm the Chief Communications Officer at Nordnet, and I will try to guide you through this day in the best possible way. As you might know, Nordnet has been listed this time around since November 2020, and this is actually our very first Capital Markets Day. We are very much looking forward to this event, and we're happy to see that so many of you have signed up to join us this day. The corona restrictions in Sweden have just been lifted two days ago, but we decided a couple of weeks ago to make this event digital only, so we stick to that plan. No worries, you will be able to interact with us and asking questions, of course. I'll come back to that later.
We will have a lot of speakers here on the stage today, and the purpose of this day is, of course, to go through and present Nordnet to you in such a way that you feel that you know everything about this company. We'll go through our strategy and make certain deep dives. We'll also talk about our updated financial targets, and I guess that most of you have seen that we sent out a press release this morning with our updated midterm financial targets. As you can see to the right of this s lide, we have a really nice bunch of people here today that will talk to us during the four hours we have together, and that brings us to the agenda.
Lars-Åke will first make a short introduction of Nordnet to make sure that everybody is on the same page for the rest of the day. After that, we'll go into our 2025 strategy, and then we'll cover things like our different channels, tech strategy, people, ESG, and compliance. That is the first block, and after that, we'll have a Q&A session, and I will come back to how that work in practice. Then we'll go into our four different markets and cover topics like addressable market, Nordnet's market share, financial numbers, and plans for 2022. We end that point on the agenda with a Q&A session, and then it's time for a 30-minute lunch break. When we meet again, it's time for the growth part of the agenda. We'll look into our different opportunities in securities brokerage, mutual funds, pension, and lending.
You will get to meet the respective managers of these business areas. Q&A session, of course, and then Lars-Åke and our CFO, Lennart, will tell you everything you want to know about our operating leverage and capital situation. Lastly, Lars-Åke will sum up what you've heard today and will open up for a final Q&A for the day. Regarding questions to our speakers, we do it like this. As you see on the agenda, we'll stop for a Q&A session after each block. If you want to ask a question, you just press the Q button on your screen, send in your question in writing, and I will pick it up and forward it to the speakers on the stage. You can be anonymous if you like, but of course, it's nice if you write your name there as well.
Remember that you can send in your questions anytime. Okay, let's do this. Please let us welcome the first speaker up on the stage, our captain of the ship, CEO Lars-Åke Norling. No people here today, Lars-Åke, no applause. I'm sorry about that.
Thank you, Johan.
How does it feel to stand here on our very first Capital Markets Day?
Yeah, it feels great.
Why is it important according to you that we do an event like this?
Yeah, I think it's a little bit more than a year now since we had the IPO. We decided to update also the financial targets. We want to share the new strategy and also do some deep dives, not least in the growth agenda for Nordnet.
Okay then. Introduction to Nordnet and 2025 strategy. Take it away.
Yeah. Thank you, Johan. We're going to start with an introduction to Nordnet for participants not that familiar with the company. In Nordnet, we've had a clear purpose since the company was founded in 1996. We exist to democratize savings and investments. Through innovation, we challenge traditional structures like the big banks and pension companies, and we give the private investors the tools, the information, and the products they need to succeed. We currently have around SEK 760 billion in savings capital on the platform, around 1.6 million customers across our Nordic footprint, and also very high activity level in general on the platform, with around 70 million trades on the platform in 2021. We are the number one digital platform for savings and investments in the Nordics.
We are the number one domestic broker on the Nordic exchanges in 2021. You can see that in the graph to the right. We also have an overall number one position when it comes to customer satisfaction. We measure that through NPS, with a clear number one in Denmark, Finland and Norway, and a strong number two in Sweden. We also have, overall, compared to other cross- Nordic platforms, number one market share of addressable market. Our aspiration is to be the number one choice for Nordic savers and investors. We want to achieve this by having a really state-of-the-art platform for all their savings and investment needs, and also a really good customer experience, of course, the most satisfied customers. We're striving to be what we call a one-stop shop for savings and investments.
You as a private investor should be able to find all the products and tools that you need on the platform for your savings. Our brand promise is building the best platform for savings and investments. This is our main focus, this is what we do every day, and we will of course never be done. We every day will be building on our platform. There's everything from launching new features in our app and our web, launching new financial products, exciting financial products, automating the customer journeys, and also ensure that we have tools for the customers to make informed decisions on their investments. You as a customer, if you are on our platform, you should be able to have higher returns over time by using the products we have and provide.
We really believe in focus to succeed. Of course, our main focus is savings and investments. We do have some complementary lending products, but the core is savings investments. We will not go into full service banking in any shape or form. The main target group is a private investor. We have some smaller companies as well, but the majority of our customers is the private investors. Focus is also on the Nordic region, the four big Nordic countries. We have around 6% market share of the addressable market today, so we have ample room to grow for many years. Of course, we highly believe in digital distribution. We're fully digital today, and we will remain also fully digital going forward. I'm going to talk a little bit now about our main segments and our offerings.
Starting to the left, you see our main customer segments, where at the bottom is a Trader segment. That's the smallest segment, but the segment with the highest demand. They want a platform at 100% uptime, and they want to have the right tools on the platform, and they basically trade for a living. We have the Investor segment, which is by far the largest segment when it comes to revenue. Investors, they are very interested in the market in general, follows the market, invest in shares and funds, but they don't day trade. They also want a lot of information and also guidance. This segment, overall, we want to, of course, strengthen over time. We have the Saver segment. That's the largest segment when it comes to number of customers, but not in revenue.
Savers, they're not necessarily very interested in the market. They're saving mainly for a rainy day, saving for the future, and it's mainly savings in funds on a monthly basis. The important part here is to have a really easy experience. It should be really simple to select funds and set up a monthly saving. This segment we want to grow in, by this big focus we also have on funds now, and we're going to talk more about that later in the presentation. We have the customer offerings in the other dimension, where we have the traditional retail offering. We have the private banking offering. If you have more than SEK 2.5 million on our platform, you get special offers. For example, you get a very attractive rate on your mortgage.
If you have SEK 15 million or more, you actually get the lowest market rate in Sweden today of 65 basis points. We have the partner offering also that partners can also connect our platform, and especially then wealth managers. That means that you as a customer can also decide that some of your accounts you want to have discretionary management by your partner, while you manage the other accounts on your own. Again, we really want to be this one-stop shop for savings and investments. For us, that's a key differentiator. You as a private investor, you should be able to find all the products that you need on a platform for your savings. Of course, with a great customer experience, but also, of course, attractive pricing.
It's everything then from secured brokerage, where you as a customer can trade on a large number of instruments on a large number of markets. We have the broadest fund platform and with over 2,000 funds today. We have pension products in Sweden, Norway and Denmark, and we're going to also expand that to Finland. You as a customer can also borrow on your portfolio with margin lending, very popular product in all countries. Retail lending, we only so far have in Sweden, that's a portfolio of unsecured loans, but mainly it's a mortgage offering to our private banking segment. The mortgage offering, we also look at expanding here in the coming years, we're going to talk more about that. We have the social investment platform, Shareville, with a true USP for us.
Rasmus later will talk a lot about Shareville and our plans for Shareville, going forward. A little bit about the Nordnet history. We have been a company since 1996, starting Sweden online brokerage. In 2001, we was listed for the first time. We also expanded Nordnet from Sweden to Norway, Denmark, and Finland. We also expanded the product offering. In 2017, the company was taken private by Öhman, the founder family, or company, and Nordic Capital. The reason for this was that there was a need to do major transformation of the business, and especially a modernization of the digital platform. We launched a new app during that time. We launched a new web and also modernized the back-end systems.
This enables far better user experience, a lot better than we had before, but also better scalability. This job was done in summer of 2020, and then the owners also decided to relist the company, and we relisted in November 2020. Now the main focus is to capture this fantastic growth potential we have in the Nordics. We have 6% market share today, so fantastic growth potential for many years. This all is going to be enabled also by the Nordnet 2025 strategy that we're going to talk more about later. We're also going to have a special session just focusing on growth. Some highlights since IPO. November 2020 was the IPO, and the numbers here you see is 2021 versus 2020.
We have added 380,000 customers in one year, added 240 billion in savings capital, SEK 80 billion in net savings, big numbers. Also very high activity on the platform overall, 72 million trades. We launched a number of products like own pension account in Norway, digitized mortgage in Sweden, savings account in Denmark, and also fully digitized pension journey in Sweden as well. Focused a lot on funds. We also applied to set up our own fund company. 99.9% uptime on the platform in spite of a number of trading records during 2021 at all-time high NPS in the customer base. We also launched a large number of features in our app and web. Just as an example, we launch a new version of the app every five days.
Every day, almost the customers get new stuff either on the web or on the app. This has boiled down to fantastic, of course, financials. We increased the revenue 35% and operating profit with almost 60%. We see an accelerating growth both in customers and on savings capital, as you can see on this slide. The reasons for this is a few. One is that we every day improve customer experience, but by our focus on building the best platform savings investment. Every day we try to do and improve our platform. The other part is that we have now critical mass when it comes to customers in all of our countries. That means that we also can enable a very efficient word-of-mouth growth where customers recommend our platform to each other.
To do that, you need to, of course, have enough customers. We also, as you know, have rigorous focus on cost discipline to drive our operating leverage. In spite of a very strong revenue growth the last years, we've managed to keep the costs flat in absolute terms for now four years. It's a truly scalable business model that we have. If you look at the cost margin, that's been going from 38 basis points down to 17 basis points with a downward trajectory. The key drivers for us for operating leverage, of course, the scalable tech platform we have. Elias will talk more about that later that we can onboard a lot of new customers without driving costs.
The other part is process simplification automation, which we're also going to talk more about, but this is a core area for us, and it's a win-win. It's a win for the customer because if you do this, it works better for the customer. It's also a win for us because we save costs. One example is this digitized mortgage journey that we launched last year in Sweden, that allows you as a customer to get the mortgage within the same day if you want, but at the same time, we save a lot of money. We have this also very efficient word-of-mouth customer growth, so we'll have low customer acquisition costs, and also versus high lifetime value on the platform, it's a very profitable customer growth. I'm going to talk more about that later.
Of course, then we put a lot of focus to manage our third-party spend. All in all, this boils down to strong financials. We see the revenue increasing with the average 40% per year, driven from increase in customers, savings capital, of course, and activity on the platform. You also see that then the cost is flat for the last 4 years, so the entire revenue increase basically end up on the bottom line. We are a tech company with a truly profitable growth. Also, as you saw with the press release, we've decided to revise the medium-term financial targets, starting with the customer growth.
In light of very strong customer growth the last three years, we decided to increase the guidance from 10%–15% growth per year on customer base to 15% per year. Average savings capital per customer, since we have also very strong net savings coming from SEK 410,000 per customer to SEK 450,000 per customer. Also income in relation to savings capital, since we're seeing now very strong growth in all our revenue streams, both funds, brokerage and lending, we increased that from 40 bps– 45 bps. The cost side, we guide now on the mid-single- digit growth in the coming years, partly from inflation, but mostly that we onboard more tech resources to be able to faster deliver on our exciting roadmap.
While the dividend payout ratio remains the same at 70% of the net profit. In summary, we are the leading digital platform for savings and investments in the Nordics. We have a strong position in all big Nordic countries, and we have a very liked and trusted brand. We're also very proud of our passionate and talented people. I think that's also true differentiator for Nordnet, and this is across the organization, but not least than also in product and tech. We have very strong growth as you've seen, both in customers, savings capital and revenue. In spite of this, we have only so far 6% market share of the addressable market, so great growth potential.
Really scalable business model as you saw as well, and we also capital-light, so we don't tie up a lot of capital when we grow, then allowing for good dividends per year. We're going to cover that in more detail also later. That was a short introduction to Nordnet. We move to the next section, which is partly new for you here, and that's the Nordnet 2025 strategy. This is the first time we present this, and we're going to talk about our strategic ambitions, but then focus a lot on how we will achieve those. There's a lot of focus on the how here. Again, aspiration, number one choice for Nordic savings investors. We want to be this best one-stop shop with a fantastic customer experience, but also then attractive pricing overall.
Our key strategic ambitions, starting with engaged customers, it all starts with the customers, of course, is then continue building the best platform for savings and investments with the new features on app, web, new products, automated journeys. We want to strengthen our NPS customer satisfaction position, strengthen the number one position we have in Norway, Denmark and Finland, and close the gap to Avanza in Sweden, where we're currently number two. This should enable that we continue to have high customer retention and low churn. You also know we would never have happy customers unless we have really passionate and talented employees. It's also a big focus area for us to continue to have an upward trend on satisfaction with employees.
We measure that also via NPS, and also secure that we can attract and retain top talent, because it's really a war for top talent out there today. It's a sustainable business. We are in the trust business. We need to earn that trust every day, and we especially need to manage the risks we have in a good way, both compliance risks and other risks. Of course, we need to be seen as a bank and a savings platform as a really trusted and liked brand. Trust is a key component here. Lastly, profitable growth, that we now capture this fantastic growth potential we have in the Nordics, 6% market share, like I talked about, many years to grow. Also that we secure that we continue to have a scalable business model that we've shown the last four years.
This is of course going to be enabled by the tech platform we have that we now step by step move to the cloud, but also that we automate all of our customer journeys. How will we then reach those ambitions? What capabilities are needed? That's everything then from delightful digital channels to have the best app or web basically out there, to be this one-stop shop for savings and investments, true differentiator for Nordnet, that we have this full process automation. We're going to automate everything that's possible to automate. We also know we have a lot of data in the organization, but we need to use that data to when we make decisions, but also use that data to make a better personalized experience for our customers. It's a scalable cloud-powered platform.
The platform we have now is piece by piece, we move that to the cloud. Elias will talk about that. That really ensures scalability. Of course, that we have best-in-class people and also a really efficient operating model, where we're also going to touch briefly on. This is all then predicated also on the ESG part. ESG is becoming more and more important, not least in the savings business where trust is key. We have ESG embedded in our DNA via our purpose to democratize savings and investments, but we do a lot of other things in this area as well, and Johan will talk more about that. Then we specifically lifted out strong compliance and risk management. That's, of course, a vital and key part of the G part in ESG in the governance part.
I think that was a short introduction to the strategy from my side. I hand over to you, Johan.
Thank you for that, Lars-Åke, for the time being, and we'll save the questions for later, so you will come back.
Yes.
Now it's time for the next person on stage, and it's Rasmus Järborg. You're no stranger to this company, Rasmus, very brief, who are you and what are you doing here?
I am the Chief Product Officer and also recently Deputy CEO.
Yes.
I run product across our business areas, but also our digital channels and digital marketing.
Yes. You're going to join us a couple of times today, but now it's time to talk about platform and channels. Please go ahead, Rasmus.
Yeah. This is my favorite part. Hold on. Before we get started, let's turn on dark mode. There, that feels much better. All kidding aside, we just shipped dark mode in the web just before Christmas as an early Christmas gift to our users, and they love it. It also saves 80% of the energy for your screen, so a bit of ESG also there. With my time here today, I will take you through our digital channel strategy, but let me start really with our key selling proposition.
I think you'll hear all my colleagues here today describe really how the secret sauce for doing that is this combination of a leading customer experience in our channels in both app and web, but really combined with a wide product range of bleeding-edge financial products, all delivered through smooth and frictionless customer journeys. It's so important that all this runs on an agile and scalable tech stack, which my colleague, Elias, will talk about shortly. Before we get into the channels, let's have a short look at what a typical day on the Nordnet platform looks like. Just before the European markets open, we start seeing requests spin up against our API, and they peak at around 20,000 requests per second just before markets open.
As you can see, they slow down during the day, and we see another spike when the U.S. markets open in the afternoon at 11,000 requests per second. On a typical day, some 265,000 users log into our app and another 15,000 on our web. They start putting through orders. On a typical day in 2021, they put through 285,000 orders on the platform, 88,000 of which were cross-border for a total traded value of SEK 7.3 billion. By the time the U.S. closes, over 1,000 new customers have joined Nordnet, and both they and existing customers have added SEK 230 million in net savings to the platform. We paid out SEK 23 million loans, and some SEK 120 million of net buys and funds have been made.
Almost by any metric, I think you'll agree that's a pretty awesome platform we've built. How do we take this platform forward? What is the digital channel strategy? What I would argue that there are really three prongs to it. First of all, strategically, I call it mission-based. This is where we want to bring this platform and these channels to our customers in the future. We talk about our Next as the consolidator of key customer segment needs. We talk about our app as a standalone channel in the future to manage your savings. We'll talk about Shareville and how that'll form the heart of the user experience.
We also work tactically or outcome-based, and this is really down to our teams who own different parts of the customer journey, where they looked at different outcomes from an OKR perspective and really want to ship feature complete functionality in both app and web, adding rich data, convenience, and delightfulness every single day, like Lars mentioned. Finally, we're very much opportunity-based, and we run unplanned innovation. This come in the form of customer feedback, and we work very closely with our customers, both in research groups, but also through all of our social media channels, including Shareville, to garner customer feedback. We work with employee-driven hackathons. They could happen almost at any time, but we have two booked hackathons a year. Then we have inspiration, of course, from global and local peers, and we can steal with pride if we want to.
starting then with our web application, which we internally call Next, this platform is entirely designed and developed in-house, launched in 2019, and we're adding features almost daily. As Elias will describe, we have the capability of shipping new features 18x a day during trading hours. Now, we call Next our financial cockpit because it's perfectly designed for both research, both on the fundamental type and the technical analysis type. It features streaming real-time prices and order books, customizable tick quick bar, and a very rich data set of static and dynamic data. Over the last year, almost 40% of customers used only or mainly the web. Like I said, 115,000 daily active users with a DAU/MAU engagement ratio of just over 20%, which is very good for a financial platform.
We see the most trades through this platform, 115,000 per day or 43% of daily traded value. What's the strategy for the web going forward? Besides being a financial cockpit, like I said, we also see Next as the consolidator of very key customer segment capabilities. We have this platform, let's now incorporate all the different needs that different segments may have, starting with our blog. We talk a lot about proprietary content, and we create a lot of proprietary content through all of our investment coaches and savings economists in the four countries. Last year, we incorporated the blog into the web. Shareville, our social investment platform. I'll come back to this, but work is underway of integrating Shareville functionality in the web. We have our client manager portal for our partner customers. I'll speak about that this afternoon.
Again, we're going to use Next as the platform and then overlay the distinct capabilities that our IFAs need. Finally, we have a third-party platform called Infront Web Trader for our traders that Lars-Åke Norling described, and a lot of these features we will be adding into Next for this customer segment. Switching to the app then, I'd first like to boast about the Red Dot Design Award that we just won. It's just a very prestigious international award and couldn't be prouder of the team and the designers and the developers who made that happen. Like I said, the app was entirely designed and developed in-house, and it's seen fantastic development in both features and use since launch. Like the web, it features real-time streaming prices, five levels of order book, integrated instant deposits, customizable charts, haptic feedback.
Today, over 60% of our customers use only or mainly the app. We currently have 265,000 daily active users with an engagement rate of 38%, which is very, very good, beating out a lot of the sort of household U.K. fintech names, including Hargreaves and Freetrade. All these active users put through 86,000 trades through the app, representing 25% of traded value. What's really cool with the app is we've really seen in the data how it's smoothed out seasonal trading patterns, as you can always reach your portfolio, whether you're on a ski lift or in a sailboat. Going forward then, the app strategy is to make the app much more of a standalone channel so that customers really can live their financial life in the app.
Even so, we also see the use of the app as an extension of Next on the go. It's a you know perfect delivery mechanism for push notifications, price, news alerts, trade confirms, etc. And of course, the advantage of app as a medium is that native experience, the immediacy, the haptic feedback, the delightfulness in the interactions, and also it being a captive environment. I mean, there are no other tabs or windows to divert your attention, and that's why we see the higher engagement rate in the app. Finally, Shareville. Now, for those who don't know, Shareville is our very own social investment platform. As opposed to Twitter or Reddit, Shareville truly is "put your money where your mouth is." Everybody can see how you're doing, and if you own a stock that you're talking about, and how it's performed over time.
We show people other users' portfolios on a percentage basis if you've opted in. Nobody can see how much money you have, but they can see at what price you bought and sold at. We assign between zero and three stars based on risk-adjusted returns over time. Now, Shareville really is a fantastic customer acquisition and retention tool. To date, over 300,000 of our customers have shared their accounts on Shareville. We can clearly see that customers of Nordnet that are also Shareville users generate 1.8x the traded value and over 2x the commissions compared to customers who are not on Shareville. We have very exciting plans for Shareville going forward. First of all, why do we have it?
As Lars was describing, we firmly believe that Shareville is at the heart of this mission to democratize savings and investments. It's all about inspiration, education, learning from the best. It's also user-generated content, that holy grail of the modern era, right? We create a lot of our own content, but here our users are creating relevant and engaging content. As such, it is a fantastic attraction and engagement tool like I showed you, but also it really is a unique selling proposition or a USP in the original sense of that term. There's nothing else like it in our part of the world. Why integrate it? User experience for once. Today, we are diverting our users between our main app and web and the Shareville app and web. That experience is not as good as it could be. There's duplication of functionality.
We have instrument pages, news, alerts, all these things in two places. From an SEO or search engine optimization perspective, it's also less than ideal. There's some 200,000 clicks going the wrong way currently. Finally, it's not part of the tech strategy that Elias will describe. It's built on a different platform with a different coding language. The future, like I said, is really for Shareville to form the heart of the Nordnet experience. We see that experience really based around your feed as a user. We've done very fundamental customer research with some of our very best Shareville users and Shareville ambassadors and done some competitor benchmarking across the world. We're very excited about this future because we really see that the user's personalized feed or your feed will form the central part of the Next and app experience.
That feed will contain social news. There might be a blog about a stock you own, news about a stock you own. You'll get your transaction confirms, splits, dividends, news, what have you, in an endless scroll, really helping us to boost that engagement ratio. That's it for the channels for now. Let me flip to the second part of our secret sauce, the one-stop shop for savings and investments. Like Lars said, it really is our ambition to be that one-stop shop. We want users who have onboarded to find what they're looking for in terms of products on the platform. We do want to expand the products offered in each of these categories, but also put ticks in more of these boxes. Within securities brokerage, it's really extending that lead that we have across the Nordics.
It's about adding more trading venues, more products, and better trading experience, as my colleague Quincy will cover this afternoon. Within funds, we want to become as strong as we are in brokerage. That's also about evening out the distribution of our income, but also about appealing to that ever-important saver customer group that Lars mentioned. My colleague Gabrielle will talk about that this afternoon. Within pension, we see a step change in growth throughout the Nordic markets, especially our putting ticks in the Danish and Finnish box. My colleague Fredrik will describe that in detail. Finally, within our complementary credit products, we want to boost trading power and margin lending, we want to bring our award-winning mortgage to both Norway and to Finland. My colleague Jaob will talk about that.
Within Shareville, like I said, we want to integrate the experience into Nordnet. Now, so we have beautiful channels, and they're about to get a lot better. We have cutting-edge financial product, and they're about to get a lot better. What about those automated customer journeys? Well, all of these products need to be delivered through a number of automated customer journeys into the channels. We are a digital platform after all. The process of onboarding and accessing the products really follows roughly 18 customer journeys divided into three journey families, which is also coincidentally how we organize our product and tech teams. Starting with foundation, which is everything you need to become a customer. Discover, which is where you become inspired to find what you want to invest in.
Finally, execution, which is when you've identified what you want to invest in, how your order is routed and comes back with a confirmation. We're constantly, of course, working on refining and automating these customer journeys. In this year's roadmap, we're focused on six of them. They're highlighted here in white on the screen. We just shipped Move My Savings in Sweden, which is a beautiful and automated flow for moving both your stocks and your funds to Nordnet, and many others are going to come during the year. With that, and to tell you more about the fantastic work we do with the tech stack and with our engineering teams, I'd like to welcome my colleague Elias up on stage. Elias.
Thank you, Rasmus. Thank you.
Take it away.
I will. Hi, everyone. My name is Elias Lindholm, and I'm the Chief Technology Officer at Nordnet. I joined Nordnet in 2019 as head of engineering and became CTO last fall. Before joining Nordnet, I spent some years at Avanza, almost 12 actually, working hands-on as an engineer, and I also held different leadership positions during my time at Avanza. I'm going to cover the next two capabilities. The first one, which we called, data-informed organization and the personalized experience. The common theme here is that we want to increase our leverage from all the data we have available on our platform, both about our customers and their use of our services, but also about internal processes and how they are working. With that data, we want to really aid decision-making and improve our user experience.
Starting with decision-making, we have started to rebuild our platform for data, BI, and analytics from the ground up on Google Cloud, and our ambition is to create tools and dashboards for all departments and teams across all of Nordnet so that they will get easy access to the most relevant KPIs and measures for their operations. With those tools, we really will help all Nordnetters make more informed decisions. Further, this also creates a solid foundation for continuous improvements of both our online offering and our internal processes. When everyone can see what's working and what's not working, then everyone can start suggesting improvements and also take actions to improve, and we can all see the effects from those actions and iterate until we reach the desired impact. This will
If we can make small and large continuous improvements across all of Nordnet, then it will be just a matter of time until we will have this truly amazing platform for savings and investments. The other area where we want to increase our leverage from our data is when it comes to personalizing our customer experience. Think what Spotify does, for instance, with a service like Discover Weekly, which is a highly personalized service with suggested music tailored to each individual user's personal music taste. Other examples of highly personalized services are the Facebook news feeds or the YouTube video recommendations. We want to bring that kind of experience and applications to the Nordnet platform and start personalizing our user experience.
For instance, we want to inspire our customers with investment opportunities based on their individual savings and interests, and we also want to make sure that everything that relates to the Shareville experience is highly relevant and personalized to each individual Shareville user. Once again, the important initiative here is our migration to Google Cloud and the platform for data that we are creating there. That will allow us to personalize larger and larger parts of our online offering. Moving on, the next capability we call the cloud-powered platform. Before I get into the specific initiative here, I want to start by giving you some high-level objectives in our tech strategy. Starting with security, I guess we have all seen the increased amount of media coverage about larger and larger companies becoming victims of different kind of cyberattacks.
Of course, as we continue to grow, we will become a more compelling target for attacks. Therefore, a key objective for us is to continuously pick up effective security measures so that our customers' information and assets are well protected on our platform. The second objective in our tech strategy is scalability. We have basically doubled our customer base over the last years, and our ambition is to double it again over the next years. That requires us to be able to quickly scale up new production capacity as we see more and more users on our platform. That, in turn, requires that we continuously remove bottlenecks in our platform and make sure that all parts of it scales well.
The third objective in our tech strategy we call data agility, and this ties directly into what we talked about on the previous slide about decision-making and personalization. We have tons of data on our platform. The challenge is that data is scattered around in a lot of different systems and data sources. What we really want to do here is improve our ability to bring all that data into one place, which allows us to both do decision-making on all that data and also to build data-intense application on a cross-section of that data. For instance, like personalizing our customer experience. The final big objective in our tech strategy is speed. We need to continuously innovate around all parts of our online offering. The experience in all our channels, the products we offer, and of course, the internal processes who powers this online offering.
That in turn requires us to have the ability to quickly deliver new software. That in turn requires us to continuously invest in replacing old and outdated technologies with new ones that are fit for purpose and allow us to run with high speed, low risk, and good quality. There are, of course, a lot of actions we have taken over the last years and will continue to take in order to improve security, scalability, data agility, and speed. I would say the one that will have by far the biggest impact is our migration to Google Cloud. In 2019, we entered into a strategic partnership with Google with a long-term ambition to move our entire online platform to Google Cloud. In 2020 and in 2021, we have onboarded our engineers on this platform and trained them.
We have also made a lot of adaptations to both our old platform and our new one to allow larger and larger parts of our online offering to be hosted on Google Cloud. Last year, 35% of all development at Nordnet was on this new platform. Now we are ready to really turn this into our primary platform for development. With that comes a lot of benefits, and I want to stress three of the big benefits of this new platform. First of all, we have a lot of managed services on this platform. Services that are just there and that our development team can start experimenting with immediately and quickly take out to production when they want to. Further, Google takes care of the ongoing maintenance and continuous renewal of those services, which allows us to focus on core business development.
Even better, some of those services are very advanced, and we would never be able to create similar capabilities on our own premises. The second big benefit of this platform is security. Nordnet X on Google Cloud applies what is called Zero Trust, which is a step increase in security compared to what we have on our old platform. Even better, Google has announced that they are going to invest $10 billion over the next five years just into strengthening security for the benefit of Nordnet and all our customers. Finally, the final big benefit of this platform is scalability. A platform like Google Cloud basically offers global scale. We can spin up new production capacity in the matter of minutes or hours compared to the weeks and months it takes us to order new hardware and install it in our own data centres.
With that, we also open up for entirely new ways of working. For instance, if one of our dev teams want to run loads or capacity tests, they can quickly spin up a production- like environment, run the necessary load test against this, and then tear it down, and we just need to pay for the short period of time that we use that environment. Doing something similar on our old platform is just not feasible. All in all, what this allows us to do is to focus on core business development. On this platform, we are going to be able to create new products and services that we would never been able to create on our old platform. That will really help us accelerate our pace of innovation going forward.
Talking about accelerating pace of innovation, the other big contributor to that, of course, is the scale up of our development department. Last year, we signed 51 new engineers, and we plan to have, by the end of this year, 37 development teams, which is basically twice the amount of development teams that we had just two years ago. We see our development teams as our unit of delivery. One more development team typically means that we can run one more big initiatives in parallel. With this scale up in development capacity, we should be able to deliver twice the amount of big business initiatives over a year compared to just two years ago. Not only are we growing fast in our engineering department, we are doing so without sacrificing efficiency.
Thanks to a lot of automation of recurring engineering tasks, sunsetting and decommissioning of old software, the cloud migration that we have already talked about, and also continuous refinements and adjustment in our team structures to make sure that our development teams are as independent as possible. We see improvements almost regardless how we measure engineering productivity and efficiency. For instance, last year, we made more than 7,000 production releases, which I just say is amazing considering the size of our engineering department. Another number I want to stress is our release lead time. That has dropped to 29 minutes. The release lead time is the time it takes from dev team from when they are done developing a new feature for our customers and until that is available for our customers in our production environment.
We do that on average in 25 minutes. There are companies who claim to be agile, who do this in days and even weeks, and I know that some of the big banks, when they work on their old platforms, it can take months and even quarters for them to get changes out to production. This is really a core advantage for us and sort of a competitive advantage, at least when we compare to the big banks. I want to end with this slide to just mention our platform's availability. I'm super happy that we managed to increase our availability last year from 99.8% to 99.9%.
Although this might not sound like a big increase at first glance, it is actually a 2x improvement when you look at the downtime, which has dropped from almost 500 minutes in 2020 down to just less than 200 minutes last year. What makes me even more proud about this achievement is the fact that we have done this during a year of record activity. Almost no matter how we measure it, if we look at the activity on our web, on our app, or trade activity, we saw records everywhere last year. I think what this really shows us is that all the actions that we have taken over the last years to improve our platform's stability has really led to the desired results. That was it for me.
I guess I hand it over to you, Johan.
Thank you, Elias. As for the others, we'll save the questions for later, so stay close to the stage. We've already had a lot of questions already, but just to remember that you can just push the Q button on the screen and shoot your questions, and we'll pick them up soon. Time now to talk about people, sustainability, and compliance. Lars-Åke, please join me again on the stage. The Nordnet people, please enlighten us about that.
Thank you, Johan. As I said in the beginning, we are really proud of our passionate and talented people. We also have a very clear people agenda to drive employee satisfaction forward. It starts that we have this clear purpose, democratizing savings and investment, but also very clear values ingrained in the organization. I'm going to talk about those later. We also have this very clear strategic direction in Nordnet 2025. Even more important, we've shown that we can deliver together as a team and really create fantastic results. We also spend a lot of focus on leadership, where we have all the leaders participating in seven days leadership training last year. Diversity is also a core component, both when it comes to different nationalities, but also gender, of course.
Here we have English as a company language. I think that's an advantage for us to attract also other nationalities to the company. Of course the work model now is going to be very important to have a very flexible work model, a mix between working from home and at the office and to get that mix right. Overall to secure that we really have a strong employee brand, so we can attract also top talent from the outside. We want to, of course, see a continued improvement on employee satisfaction as you see then at the bottom. Our values, they are equally strong as our purpose and starting with passion, and we are very passionate as you already heard about our customers and not least the customer experience. We're also very passionate about our employees.
Simplicity, that we have easy-to-use products, but also easy-to-understand communication. Lastly, transparency, that we tell things how they are, both internally and externally, so not a lot of fine print. We also believe, too, in having a really efficient operating model with clear responsibilities. We have one product and tech organization supporting all countries. You see the tech part there, in this picture is the yellow part. We have the product side with the business areas, securities brokerage, mutual funds, credits, and pension. Also the business areas, they have front to back responsibility, including the operations units. This allows, of course, to optimize the P&L dimension, the process dimension, and not least the risk dimension. This is a core component also to make Nordnet efficient going forward.
At the top, we have the countries that basically take the products out. It's marketing, sales, and customer service, around 30-50 people per country. We also have one Nordic marketing function to secure that we have one brand and one look and feel, and that Nordnet is perceived equally in all of the local markets. Of course, the staff functions and not least the control functions, where we have very strong risk and compliance function. With that, Johan, I hand over to you.
Thank you, sir. Time to look at what we're doing when it comes to sustainability, and that is actually a topic that I will cover myself. Besides hosting this presentation, I'm also heading up our communications and sustainability team. On the top right on this slide, you see our sustainability manager, Marja Carlsson, new at Nordnet since November. On this slide, you also see our sustainability strategy. We have three overall focus areas when it comes to sustainability, and each of these three areas have three more specific initiatives that belong to them. We have also connected our goals to the UN SDGs. This is seventeen sustainable development goals. The first area in the core is democratized savings and investments. You heard about this before today. That is also the purpose on higher level with Nordnet.
We started out in the 1990s as a reaction to that investing in stocks was reserved for a chosen few. We wanted to change that, and that is the purpose that we carry with us to this day. We like to say it is that we are challenging traditional structures and give private savers access to the same information, tools, and services as the professionals. We have multiple proof of that in our history, taking stock trading online, building a fund supermarket, increasing flexibility in taking down costs in pension savings, low-cost mortgage, and our stock lending programs to name a couple of examples. We are also very visible in the public debate around savings, always standing on the saver side.
For instance, last year, we took the fight against implementing negative changes when it comes to how much you can save on the ISK, the investment savings account. That is the most popular account type in Sweden. We took the fight against the government, and it turned out to be a pretty successful one because there are no suggestions now on the table to limit the ISK. We are also right now in the public debate arguing for implementing a central hub for pension savings, a digital portal where all citizens of Sweden can see their occupational pension accounts from various previous employers, and also the possibility to transfer between different companies. We'll see how that goes. Our purpose also, of course, says something about our ambition when it comes to products, develop user-friendly and inspirational service for savings and investments.
I will come back to that, when it comes to the educational and inspirational part in a moment. Our ambition when it comes to sustainable savings is to become the leader in the Nordic region. Also that I will come back to in a minute. Next focus area is equality and diversity. We stand up for and work for a better equality between men and women when it comes to savings and investments. We try to promote that with different activities. Likewise, we also have that perspective internally and want a workplace that is characterized by gender equality and diversity. We also would like to promote the positive development for the generation of tomorrow in the digital direction. We work with, for instance, teaching young people how to code, arranging education sessions and kid hackathons.
The third focus area is responsible and sustainable business. The first concrete goal there says practice transparency, compliance, and high ethical standard. Just shortly about transparency, that is something of a key value in Nordnet. We always try to be open and honest with each other in the company, and of course, towards media, authorities, and you as investors and analysts as well, of course. We think that is the key to build trust for us as an organization. We also want to promote physical and mental health through a good working environment. The transparency and honesty is, of course, one component in that. Also we want to reduce negative impact on the environment and climate. That is, of course, our own footprint, but we have also recently engaged in an external activity as well. I'll come back to that.
Our own footprint, by the way, has been reduced for many years. We have a digital business model, and we emit very little carbon dioxide. When it comes to increase the general knowledge about personal finances, we do a lot. Sorry about that. Yeah. When it comes to focus on education inspiration, we do a lot. We have the Nordic Stock School business in the four countries. We're something of a content factory. We produce a lot of content in our own channels, the blog, the podcast, and the videos. We have when it comes to products, the guidance flow, for instance, the monthly savings from zero to hero in six easy steps. Shareville, Lars-Åke has covered that. We also have the golden rules when it comes to investing.
When it comes to sustainable savings, we like to say it as we want to become the leader in sustainable savings, and that doesn't mean we don't exclude anything. That will mean instead having the most investment alternatives when it comes to sustainable savings and the tools and information that the customers need to invest sustainably if they would like to do that. Last year, we became the first fund platform in the Nordics region to include information about the EU categories, Article 8 and Article 9. Earlier in the year, we changed the underlying indexes for our 4 international index funds to their sustainability adapted equivalent, which means that our own international index funds are in line now with Article 8. We have other sustainability features as well as you can see on the screen here.
The last slide I want to show you here is an initiative we launched on Wednesday this week. It is called The Re:turn Initiative, and we do that together with our largest owner, Öhman. This is an initiative in order to reduce the negative impact on the climate and our environment. In short, we donate SEK 0.10 per trade on Nordnet's platform during 2022 to organizations that work with trying to solve some of the challenges we have in the area of environment and climate. Then we let our customers vote for how we should distribute the money between the three organizations that we have chosen per country. That was that, I think. Before we open up for questions, Lars-Åke Norling will take over again. This time, I think the topic is compliance, right?
Yes. To end with compliance before Q&A. This is very, very important for us as a savings platform. We are in a trust business. We need to earn that trust every day. We know we can easily lose the trust if you have a major incidents. Strong compliance risk management is the vital part, the key part of G in the governance in ESG. Key for us to manage the trust is to manage the risks in a good way. Of course, the board and executive management, we are overall responsible for the risks, but underneath we have what we call three lines of defense. The first line is the operating units, and they own the risks.
They own the management of the risks to secure that we handle all the risks in a good way. We have the second line that's risk and compliance, and they control that the first line do what they should, and they are very active in that. They also support first line when they need help. We have the third line, and that's internal audits. They report directly to the board. The main purpose to overall secure that we have the right system set up both for governance and internal control. We work very actively with this, and not least we work very actively with the risk management in the operating units at Nordnet. That was the last on the strategy session, Johan.
Okay. Thanks a lot for that. Now it's time for questions. I ask Rasmus and Elias to join Lars-Åke on the stage. You can ask your questions to anyone here, of course, on the stage. Like I said before, just press the little Q button on your screen and fire away. We have already received a lot of questions. Start with a couple of them that regards our financial targets. They come from Andreas Åkesson at Danske Bank. When you give your revenue margin target of 45 basis points, you say it's driven by adjusted revenues. What is that adjusted for and what is included? Lars-Åke, can you take that one please?
Yeah. We had one adjustment that was in 2019 when we sold our Tink share. Otherwise we haven't had any adjustments. It's not likely we will have any, but if there is, we of course notify what it is.
Okay, good. A couple of questions from both Danske Bank and from Carnegie about the interest rates in the coming years. What are your assumption in terms of interest rates in your revenue margin target? You can come with that, Lars-Åke.
We have some increases in there in the modeling we do now. Let's see how the world moves now. It might be higher increases, and that's of course then a potential upside.
Okay, good. Do you have any guidance on return on equity, Lars-Åke, again?
No specific guidance, but we report on it as a KPI in the quarterly reporting.
Yep.
You can follow it there. For us, I think with the dividend policy and the other targets, I think that's a good set for us.
Yeah. Okay. Again, from Carnegie, Ermin Keric. Which countries have most potential to add customers and in which customer categories? Countries, categories, most potential. Rasmus, will you take that one?
Well, I'm going to take it in the sense I say, stay tuned Ermin, we're going to do a deep dive into the market shortly.
Okay.
You're going to get the answers to that and more.
All right. Lars-Åke, you showed the financial targets on one slide. There's a question: have we removed the explicit number one customer satisfaction target, or is that still your ambition, Lars-Åke?
No, no. It's clearly, as you saw in the strategy part, one of the key strategic ambitions. It's not a financial target, as seen in the financial targets. That's why we separate the financial targets and the strategic targets. Yes.
Perfect. I'll shoot the question to Elias now. You talked about the cloud a lot. What is left to move to the cloud? Can you give an overview of that?
Yeah. I mean, we have done our cloud migration, we are prioritizing from the perspective that we want to be able to do as much new business development as possible on this platform. We have a goal that during 2023, at least 90% of all development at Nordnet should be on our new platform. That being said, there are of course a lot of systems on our platforms that need to be migrated. Even after 2023, there will be remaining parts. I mean, the key for us is to be able to do business development on the new platform to large extent, and that's what we are optimizing for.
Okay, good. Here's a pretty detailed question I think to you, Lars-Åke. How is Slide 9 in your presentation different compared to IPO pre-pandemic? That slide was about customers by different segments. How has that developed over time?
It hasn't changed that much. As I said, we want to strengthen the investor segment where we're already very strong.
Mm.
Continue to grow in the saver segment, which is the biggest segment across Nordics. Not in revenue, but in numbers. I think we have a great potential overall in the saver segment, not the least from the big focus we have on the fund business, because the fund business is key to unlock savers. They invest basically only in funds.
Mm.
We will publish these slides as a PDF on the corporate website after this event. If you want to, you can download the prospectus and do a side-by-side comparison on that table. It'll be there for you.
Transparency, right?
Yeah. All about transparency.
Question to you, Rasmus, now about product. Why haven't you launched pension in Finland, number one? Secondly, do you have all the pension accounts you want to offer in Sweden, Norway, and Denmark, or are there any other plans?
Oh, good question.
Rasmus.
We are going to do a deep dive on pension this afternoon, and my colleague, Fredrik, the CEO of the pension group within Nordnet, will cover that. Just to give you a small preview, Finland has a different occupational pension market structure. It's all about defined- benefit. There's a lot of sort of centrally negotiated pensions, so we're not interested in that. We are interested in bringing an insurance wrapper, so an endowment wrapper to Finland, and Fredrik will cover that. We do not have all the pension account types we want to have. We want to launch primarily a livrente product in Denmark, which is a huge market opportunity. Again, Fredrik will do actually a case study on livrente this afternoon.
Great. Patrick at ABG also had the same questions about pension, the timeline. He also asks about the timeline when it comes to mortgage. Can we say something about that in other countries than Sweden, Lars-Åke, Rasmus?
For sure. I mean, we have a fantastic mortgage. It's still the lowest priced mortgage in Sweden at 0.65%. My colleague Jakob will cover that this afternoon again. We are underway, I can say, in developing a mortgage for the Norwegian market. So that work is ongoing. We also want to bring this mortgage to Finland, and that'll be after the Norwegian mortgage is launched. Stay tuned, and Jakob will give you more details this afternoon.
Great. Then a cross tech product question. When can Shareville be integrated? Does it all have to be redone as on a different tech stack? That sounds like Elias one.
I can start and then Rasmus can take over. I know that Rasmus is super excited about everything that relates to Shareville. As he said during his presentation, Shareville has been run on an entirely different platform as the rest of the Nordnet online platform. What we have invested in over the last, I would say 1.5 years, is to move parts of Shareville to our new platform on GCP, which enables us to integrate it to a much larger extent than what we have done in the past with our web and app. I guess, Rasmus, maybe you want to cover what it is from a customer perspective that we want to.
Sure. I talked about it a little bit in my remarks earlier, I think, building on what Elias says, once we have a lot of the base services on GCP and that work, a lot of the ground- laying work has been done. We will start to see features show up, Shareville or social features on Next. Actually 20% are out now, or 20% users have access to Shareville comments being served off of the GCP solution on the instrument pages. If you're one of the lucky 20%, you'll see that we're going to ramp that up, as we see the data come in. Work is ongoing, and you will see a lot of cool features shipped during 2023.
Great. There's a lot of great questions, and the questions just keep coming in. Fire away, guys. Press the Q button. I think this one is to you, Rasmus, as well. Any risk with personalizing your experience too much, becoming too much of an advisor? I mean, the line between guidance and advice, I guess.
Yeah, for sure. That's a great question, and we are very cognizant of that line. I think in everything we do, we want to stay on the guidance side. We'll, you know, we'll tiptoe up to the line between guidance and advice, and we'll take a firm step back, and we do that together with our compliance function. That's true in a lot of features and flows we shipped, including our guidance flow to set up monthly savings. The same will be true, of course, of personalization. We should say, we're very respectful of the customers' integrity. It's all about opting in. If you want to have this social experience, it's all about opting in. If you want to let us use your data in order to come up with personalized information like Elias was describing.
We definitely want to stay on the side of being an open platform, letting the users decide, but we want to make those choices available to them. We think that's, you know, where is the line between a fantastic user experience and it being personalized marketing? That is a continuum, and we always need to make sure we're on the right side of that continuum.
Thank you, Rasmus. The cloud, this seems to generate a lot of interest from our viewers that you were talking about, Elias. Is it possible to quantify the cost saving in percentage or in absolute terms from developing a new product in the cloud-based environment compared to before you migrated to it? You can take the mortgage in Norway, for instance, as an example. I'm not sure if you can fill in if you want to.
I can start by giving my view. I mean, what the cloud really gives us is a lot of new capabilities that we need that will be much more expensive to create on our own premises. For instance, when it comes to personalizing, which we have recently talked about, our customer experience, but also to have this capability both to make sure that our customers' asset and information are secure. I know that my predecessor said that he couldn't understand how companies dare to try to secure their own data centres anymore. I mean, security in the future is in the cloud, and that's one big reason why we have decided to make this move. Also scalability.
Building that kind of platform which scales as well as a cloud platform is basically we can't do it. That's where I come from when we discuss this. Maybe Lars-Åke Norling wants to fill in on the cost side.
No, I think it was a good answer. I mean, with scale, we can use tools that's already in Google Cloud instead of developing them ourselves. I think a core component is this automation we're doing in general. I mean, it started on the on-prem, now it's moving to the cloud. Looking at the customer journey for mortgage, for example, we've done this extensive work in Sweden, and we can take that automated process when we build a Norwegian mortgage and just change a few things and be up and running. This automation work is highly important also for scalability, also when it comes to product development.
Good. Elias, are there risks with working with Google, relying so much on Google? There's a question here that mentions something called vendor lock-in. I don't know if you know what that is, but comment a little bit on the risk with working with Google.
Yes. Of course, there's always a balance. I mean, there's a risk of vendor lock-in, which is basically that we will become very dependent on Google and sort of it will be hard for us to negotiate the pricing and so for the services that they provide us. I mean, with all technologies that we procure, there's always lock-in. It's. I mean, it is too expensive to try to make everything you do vendor neutral. It isn't something that I'm super concerned about. I mean, a lot of the things that we use on this platform is follow standards that is also available on other cloud platforms.
If we would like to transition to maybe Amazon's cloud platform in the future, it is possible, but of course requires us to do a migration initiative.
Okay, good. Thanks a lot. Lars-Åke Norling, you touched upon the people and the recruitment need we have. How many engineers, to both of you, Elias Lindholm and Lars-Åke Norling, how many engineers do you estimate we need to recruit in the upcoming years? And how large share of the cost increase that we have communicated today will be related to the recruitment needs we have in tech? Lars-Åke Norling.
I mean, we recruit around 50 per year that we did last year. We will do that this year. About half of that is replacement of people leaving, and half of it is increase in staff.
As I said, when I talked about the cost target, cost growth of 5% per year, around 5% per year, it's a small part is inflation, but the larger part is product and tech resources. Not only tech, because we set up this fund company and pension companies, et cetera. It's some product resources as well.
Exactly on the same topic, how do you view salary inflation for engineers and the war for talent?
Yeah.
Who wants to take that one?
I can start. I think, I mean, I didn't mention that, but I mean, we signed 51 engineers last year, and I'm super impressed by the talent acquisition team at Nordnet. They do an amazing job. It's not just that we have signed 51 engineers. We have signed the 51 engineers with all the right aptitudes, mindsets, competence, and passion to really fit into our culture. I think that shows that we have a strong brand, and we are able to attract new talent in a tough market.
Anything you want to add there, Lars-Åke?
Yeah, of course, if inflation spins out of control and salary increases spins out of control, I think that's an issue for everyone in the market. We don't see that now, but hopefully Sweden and the Nordics can contain inflation in a good way.
Good. Rasmus, compared to competitors both in the Nordics, Europe, and U.S., would you say that your platform is more or less advanced? Do you see your cloud platform as competitive, as a competitive advantage when competing for talent? Okay, so it's a two-fold question to start with you. Rasmus, are we more or less advanced than the rest of the world?
For sure we're more advanced. For sure. I don't care about advanced as such. I care about the user experience. We want that delight and less, we want that fantastic flow. We want people to be engaged in our channels, and for sure we have that. I think we stand up there with the very, very best in the world, not just in financial platforms, I would say, but in a lot of consumer applications and consumer platforms. Of course, we have some very strong competitors, both here locally and some that we are inspired.
You know, looking across the U.S. and the U.K., but I think we can hold our own with any of those, both on a product and UX perspective, but also on a tech perspective, which I guess is the next part of the question.
Next part is, do you see a cloud platform as a competitive advantage when competing for tech talent?
Yes, for sure. I mean, it's as a former engineer, I mean, it's not fun to work without data technologies. You want to be at the forefront. I'm going to quote one of our engineers who recently said that working on Nordnet X, which is our new platform on Google cloud, is 100,000 more fun and easy compared to our old platform. I think that describes his emotions.
100,000x .
100,000x . From an engineer, that's normally quite
Very precise.
Yeah.
Okay. Great answer, Elias. I mean, the questions come in, they ask about the same thing, but we do the principle: no questions unasked here. Again, provide a timeframe for your cloud migration, Elias.
I mean, on a high level, it's the same answer I gave earlier. I mean, we have had this ambition that during 2023, we should see 90% of all business development on our new platform.
Mm-hmm.
Of course, I think also, I mean, we will have our old platform remaining for many years.
Mm-hmm.
I mean, it will be less and less important for us, but we haven't set the hard deadline for when we want to sort of close down our old platform and run all in-house developed components on our cloud.
Good. On the Shareville topic again, and this time from a compliance perspective, Rasmus.
Yep.
How do we monitor and manage the content on Shareville? Are there some limits or restrictions in place what people can say? Yeah, that's the question.
Yeah, it's a very good question. It's of course something we are, you know, we're very aware of, and we work proactively, I'd say. And we are fortunate to have a very strong compliance department who works very closely with us, both on the pro-product development side, but also on, of course, helping us monitor in the three lines of defense that Lars-Åke described. I think what makes the huge difference is that users of Shareville are customers of Nordnet, meaning they have gone through full bank onboarding, KYC. We have, you know, copies of their IDs or passports. They know we know who they are. We have very strict terms and conditions from a market abuse perspective and a market manipulation perspective.
We have lists of people who could be considered experts based on their background or the number of followers. We have moderators monitoring in each of the four countries for the four local languages. We do sample testing. We have a report/post function, and we have a three-strikes-and-you’re-out policy when it comes to anything untoward. I'd say that makes a huge difference. Also in the tone, I think. There are some pretty sort of harsh tones sometimes in Facebook or on Twitter or on Reddit. We don't see that because Shareville is a close-knit community, and it is of Nordnet customers. It's a much friendlier and more collaborative tone. We haven't had many incidents at all, but it is something, of course, that we are very much aware of.
Thanks a lot, Rasmus. We have now a couple of questions from Nicolas McBeath at DNB. We'll take them one by one. The first one is about revenues. Your targeted revenue savings capital of around 14-15 basis points is just at the level that you have reported over the past couple of quarters. This ratio has been steadily declining sequentially every year over the past 10 years, except for 2020 due to surge in activity during the pandemic. What makes you confident that revenues to savings capital will stabilize at the current level? Lars-Åke.
I think we're going to have around 45 minutes session on that in the afternoon with Rasmus and his team.
In simple terms, continue with the customer growth, the net savings, but of course, the product side is very important that we get the customers to take up more products and of course, as we launch new products as well.
Good. On cost, also from Nicolas. Your 5% cost growth seems low in relation to peers and in light of the high customer growth. It will seem like you need to have meaningful cost efficiency measures planned to offset cost pressure from salary inflation.
Yes.
more employees to meet high number of customers, et cetera. Could you talk about what cost efficiency measures you have planned for the next years?
Yeah, I think the main part is all the automation we're doing now with the customer journeys, and that's a win-win. It's a win for us because we save money, but it's also a win for the customer because it works a lot better. We've done the mortgage, we're going to continue with the pension journeys, we're going to Move My Savings, and we have a, I think it's, you showed that.
Six journeys this year, yeah.
Yeah, and more to come. That saves a lot of money. We don't see that we need to onboard a lot of new staff in the operating units. Where we onboard more staff is in product and tech today. Of course, we worked very extensively also with the management managing our vendors, both our cost of sales by the markets, but also all other costs as well. We continuously take out a lot of costs there.
Okay, good. Again, from Nicolas McBeath, how do you view your desired revenue mix going forward? Approximately 60% of revenues today are transaction related, which is historically high for Nordnet.
Mm.
While historically, Nordnet has had an ambition to increase share of recurring revenues.
Yes.
Are you happy with the high dependence on activity or target to drive more recurring revenues in the future?
Yeah, well, I think you're going to see more balanced growth between the revenue streams in the coming years. I think you saw that already in 2021, where actually fund revenue grew the most with 45%, brokerage was 33% and lending 20%. I think going forward, we're going to see a very good growth in the lending and the fund portfolios from new customer savings capital, but not least the focus we have on funds now, that we really see that makes a difference. On the brokerage side, I think we're going to see slightly less trading per customer, more versus historic norms before the big spike in 2020. But that's compensated for by more customers.
We also have this higher share of cross-border trading of around 30% level due to the country mix.
As we'll talk more about the behavior of the newer cohorts after lunch, but one thing we are seeing is that they are doing more investments into funds, which of course creates a recurring revenue stream. It's a mixed question. On the brokerage side, there's also more mix into cross-border, which also generates effects. There will be a bit of a different growth going forward, we think, which will favor the recurring revenue sides. Of course, launching mortgage in Norway and Finland will also add more on the NII line as a recurring revenue stream.
Great. The last question from Nicolas, I direct that to you, Rasmus. The topic has been up before. Since much focus will be on personalization of the customer experience and increased engagement, do you see any concerns or conflict with such objectives from an ESG or from an ethical perspective? I mean, can the experience become too customized or customers too active?
Yeah, it's a good question. I think, like I said in my previous answer, we always need to make sure that we approach that with you know both dignity and respect of people's integrity. That therefore, I think a lot of those choices need to be in hand of the customers so that they are choosing whether how much data they want to share, A, you know, if they want personalized recommendations or personalized flows, B, and C, if they want to engage on our social platform, Shareville, when it's integrated into the web and app. On those things, I think it's we want to make sure that we have the capability and we can offer that experience if it is something you like.
If you don't like it, you don't need to worry about it, and you can turn that off. I think that is really sort of the guiding star for us with this.
Good. A couple of questions has come in about consumer lending as well. Switch to that topic. Do you have any ambitions to grow in consumer lending? I'll take that one first, Lars-Åke. Ambitions, growth ambitions in consumer lending.
Sure.
You mean unsecured per-
Exactly, unsecured loan portfolio.
No, we have around SEK 4 billion in that portfolio today, and that's going to remain rather stable. But we do shift now to have more Nordnet-specific customer versus our own customer base, leaving a little bit of this Konsumentkredit behind and having a pure Nordnet unsecured product for our customers.
Yeah. Question about, I don't know if you will cover this afternoon or not. We will cover this afternoon, but you can answer it now if you want to. Resurs is under investigation from the Swedish regulator, how it originates consumer credit loans in Sweden. Is that a risk to Nordnet? And if not, why is it not a risk? Do you want to comment it now, or should we take it this afternoon?
We can take it.
Yeah. I think Jacob, our Chief Credit Officer, can cover that. He will have a slide on the unsecured lending business, but I think already now we can calm anybody worried about that we have a totally different credit granting and credit approval process.
We do the KALP.
Yes.
Because the others rely just on credit scoring. We have both KALP and credit scoring.
Yes, we do. We'll come back to that when Jacob is speaking. Can you, lastly on this topic, Lars-Åke, remind us on the yield on the consumer credit portfolio, please? Again, the unsecured part of it.
I think it's around 5%. It's a fairly low risk portfolio, as you also see in the credit losses, which are low. We try to have it as a low risk credit portfolio, mainly for our customer base going forward.
Over to trading activity, what is your expectations for how trading activity will develop? How is that built into your plans for the future?
No, I think we also show this in the quarterly reporting. We see more of the trading activity per customer goes down a little bit more to what we saw in period 15 to 19 before we had the high volatility in 2020 and beginning of 2021. So when we model, we model more on historic levels, but it is of course a function of volatility in the markets. We try to model it more carefully, so if there's more volatility is an upside. But again, we have more customers, so that compensates some more trading customers. And then also the cross-border share trading is definitely higher around 30%.
Good. Question again about the interest rate hikes. I know you have talked about this before, but for potential new viewers, how many rate rises exactly are you assuming in the 45 basis points of revenue guidance? How is that built into that revenue?
How many? I mean, I can't answer exactly how many, but we have modeled hikes, but the way the world is moving right now, it might definitely be an upside to that over time.
Good. Lots of great questions. Actually, the last one that comes here, and it's a product question, and it's a pretty straightforward one. When are you opening up for trading in U.K. stocks? Rasmus?
Don't want to promise anything, but we hope to get that up at the end of March or the beginning of April. The teams are working hard with it as we speak.
Good. Looking forward to that.
Yep.
That was actually the last question for now. Thanks a lot all of you asking question, great questions and great answers, you people on the stage. Now it's time for lunch break, and I think we stick to the original time plan.
No, no, no.
No?
No, market update.
Sorry.
Market update.
Market.
Market now. Okay. Yeah. Thank you. Exactly. Lars-Åke, it's your turn again, and dive now into our different markets.
Yeah.
Sorry about that.
Sustained one-
Sorry about that, Lars-Åke.
Market session. No problem.
Yes.
going to deep dive in the market space, both in regarding our position in the different Nordic markets, but also overall how the addressable market will develop now in the coming years. Some slides have quite a lot of data points. I'm not going to go through all of those, but as we said, you will have this material then published on our website afterward. Looking at the Nordic savings market overall is very big. It's around SEK 37 trillion, growing around 6% per annum. Our addressable market is one third of that if you take away some private equity, some pension products, and some bond products. Still SEK 13 trillion. Our market is growing faster because it's more shares and funds, it's 6%-8% per year.
Additionally, with opening now the Danish livrente pension product and endowment wrapper in Finland, that will enable another extension of the addressable market with around SEK 3 trillion in 2025. In 2025, you see an overall addressable market for us around SEK 20 trillion. We also know that the digital platforms are significantly outgrowing the market and taking market share. As we said a number of times now, our market share currently is around 6% of the addressable market, so great growth potential in the coming years. We also know that the digital platforms are taking market share from 8% in 2016 to 14% today, and we continue to grow to around 17%. If you then add the extended market, then it's only around 14%.
Again, for digital platforms as such, there is great room to grow. We see that Sweden has the highest penetration today, or highest market share of 19%. It's Norway, but that's a little bit distorted by Sbanken, and that's primarily a deposit lending bank, so they have huge deposits, not that much savings. It's Denmark and Finland. Why do customers then choose to onboard on online digital platform? One is, I think the most important is this one-stop-shop experience, that you can find everything on the platform. Also with a fantastic customer experience and overall, of course, an attractive price. We see also the move, customer move is from the big banks and pension companies to the online platforms.
In Sweden, our main competitor is Avanza, probably the player in the Nordics that's most like us, most like a full one-stop shop. In Norway, it's the competitor is Pareto and Sbanken, but Sbanken is mainly digital lending, mortgage, and Pareto is more skewed to heavy trading. In Denmark, it's Saxo Bank. Also here, we have the much broader offering, and Saxo is also a little bit more trading. In Finland, we're virtually the only big digital platform for savings and investments. We see today, by being Pan-Nordic, instead of just, not just being in Sweden, we have a market that's two times bigger, so SEK 13 trillion addressable market for us.
If you look at the market share in the different markets, it varies from 5% up to 9%, but on average, 6%. If you look in 2025 then, the addressable market has been growing then with the extension, with the livrente and Finnish wrapper to SEK 20 trillion. You can also see in this picture that, being now Pan-Nordic gives a market that's two and a half times larger, and especially now Denmark, as you see, is almost equally big as the Swedish market due to the livrente pension market being so big. Now I'm going to go through each of the countries, a little bit highlights. Again, you will have those slides to deep dive on your own.
In Sweden, around 20% of the population are on digital platforms, so us or Avanza. Looking at us, we have around 30% of the customer base versus Avanza, but we have 45% of the savings capital. That means our customer base is very high end and also creates a lot of income per customer. We managed to increase the market share from 16%–21% versus Avanza, and from 3%–6% overall . To the right, you see also our market share of the addressable market per segment, so shares, funds, deposits and pension. Here you see a big potential of course to move more deposits to shares and funds and of course overall to grow the fund and pension business for us.
We also, really important for us is not just have plans but also do what we say. We presented in the analyst presentation ahead of the IPO what we plan to do per country, and we achieved what we said we were going to do. In Sweden was to grow funds, we had tremendous growth in funds, also grow pension assets. They are up 42%, 2021 versus 2020, expand and grow the private banking, which has been a fantastic journey last year. We managed to have a fantastic IPO year also in Sweden. We retailed this venture in a number of IPOs, which is good for the customers because they love IPOs, but it's also good for us because it gives revenue.
We offer a mortgage, lowest interest rate, digitized, and also fully digitized occupational pension. Important here, if you look at the numbers at the top there, savings capital per customer and income per customer in Sweden, they are high, highest in the Nordics and also considerably higher than Avanza. We are strong in the trader and investor segments in Sweden. Of course, we want to also expand more into the saver segment by the focus in funds. You can also see this with the customer CAGR, that's 10% versus the revenue CAGR is 20%. Customers are using more and more of our products.
Focus going forward, growing in the saver segment, by this fantastic focus on funds, continued growth in private banking, and also then, of course, continue to focus on the pension market in Sweden, and bringing customers both via our own channels, but also with our partners that we use, Söderberg & Partners and Max Matthiessen . That was Sweden. If you look at Norway, in short, around 6% of the Norwegian population is on our platform. Interesting point here is only 11% of the population in Norway own shares, and I think here is an upside over time. Also in Norway, we're taking considerable market share from 2%–7%, and also in Norway, you see very high deposits. We can shift that to shares and funds.
It's an upside, but overall grow the fund and pension business as well. Also here, we do what we say, funds up. We launched EPK on pension account last year, around 11,000 customers using that today, SEK 3 billion or close to 4 billion in savings capital and also good growth in private banking. Some other achievements. I mean, we are super strong position in Norway now and clear number one domestic broker. We have the fastest growth in the Norwegian savings account. As you see also the customer revenue growth is just fantastic, a 40% CAGR on customer growth to 40% CAGR on revenue growth. Also strong customer numbers or customer data points overall. Also high share of cross-border trading, more than double than Sweden.
Focus now going forward, we talked about that to launch the Norwegian mortgage to attract the private banking segment. Overall, I think we have a huge potential in private banking in Norway. We are fairly small there compared to the other countries, so we have a way to go, but this private banking mortgage is going to really help. Then, of course, to continue to grow in the fund space, both via ASK, but also all the things we do in our fund offering. Denmark, also 6% population is on our platform. Also fantastic growth in market share from 2%–5%. Here you see, then, the pension market that we have fantastic potential over time. But also we have a low share in funds.
Funds and pension is very important areas for us. Also here, we said we were going to grow funds. We've done that with 75% in one year. We also introduced monthly savings. We launched this Danish savings account in November last year. We already have 50,000 open accounts and 20% market share. Eight out of 10 accounts open since we launched has been on our platform, so great success. Then we have the Danish livrente where we do a pre-study, and we're going to talk more about the full livrente product later. Also like in Norway, we've built a fantastic position now. We have built a fantastic position in Denmark, awareness, preference, growth. I mean, we also have a 40% CAGR in customer growth and also in revenue growth.
We also introduced actually monthly savings in Denmark. It was not prevalent, not that common before. Now a lot of Danes save on a monthly basis, which is a really good way of saving, but it's almost like it's synonymous to Nordnet. We are the ones that brought monthly savings to Denmark. Also very good customer data points overall, and you see especially cross-border trading in Denmark, 51%. It's clearly the country where you trade most outside of your local exchange. Focus in Denmark, of course, the livrente product, very, very important, but also broaden awareness also among the affluent segment, which are perhaps more resistant to move.
I think we're getting traction in that segment as well, both via marketing, but also that we're going to have new solution products, more allocation like funds in our fund company. Overall continue to focus on the fund and the fund offering. Finland, let's a little bit more on the platform here, 9%. Also great growth in I think Finland, there's upside to move deposits to funds and shares, and also here with the endowment wrapper you see to the right will also open up a big new market for us. Also here we have done what we promised to grow the fund business up 75%, 2021 versus 2020.
An important area for Finland has been to grow also revenue per customer, because revenue per customer in Finland has been lower than the other Nordic countries. We see a clear growth in revenue per customer in Finland, and also that the Finnish customers are taking up more products, not just brokerage, but also now on funds and margin lending. Then, of course, do the pre-study on the Finnish wrapper and try to launch that as soon as possible. I mean, since we are the platform in Finland, we have a superior position in Finland, clearly number one. We also, this Finnish savings account that was launched in the end of 2019, we have 76% market share on that account, which is just astounding.
Also here you see customer growth around 30%, but you see revenue is growing on average 40% per year, and that's due to we also managed to shift up the income per customer in Finland. Also looking in Finland, the trades per customer is fairly low compared to the other countries, so I think that's an upside for us also going forward. Cross-border trades also on a high level in Finland. Focus in Finland, insurance wrapper, this endowment wrapper, that's also very good for PB segment. Overall, we're going to focus on PB, but also on the Swedish speaker segment. We have a full Swedish website and app in Finland, and we've of course, we're going to utilize that. And then we're going to launch Finnish mortgage as well, also towards the private banking segment.
All in all, we are the number one Nordic digital savings and investment platform. We have a clear number one position, as you seen in Finland, Denmark, and Norway, and a strong number two in Sweden. We also have a well-diversified revenue footprint, as you can see as well, and that's shifted a little bit over the years. Two years back, or at the IPO, Sweden was bigger. Now the other countries have also been growing. We also see in the chart in the middle that we have the highest customer growth in Denmark, Norway, and Finland, and that's also the countries where we have highest margin that you see to the right, and that's due to small cross-border trading in those countries.
They trade locally, but then they trade a lot in Stockholm and the US as well. That was a quick overview of the markets. As I said, a lot of data points, so you can study this a little bit also when you get the slides.
Thank you, Lars-Åke, and now it's time for a Q&A about our market. Just press 2 on the screen and send in your questions. Not so many questions have come in this time, but we have lots of questions just now.
They have questioned out before.
Exactly. A couple of them anyway, Lars-Åke. Revenue per customer in Finland–
Yeah.
Can you elaborate a bit on that? What is the potential?
Yeah, I think it's a few areas there. One is you saw that the trades per customer in Finland is lower, so of course, if that will increase over time, that will add revenue. Especially where we focus now is to have more Finnish customers using funds, but also then our lending products. Margin lending today, but it's also going to be the mortgage going forward. I think we have started now with a big shift upwards in a way, in a good way.
Mm-hmm. Nice. You also talked about IPOs, the customers loved it. What does the IPO pipeline for 2022 look like compared to 2021?
Yeah, we have visibility until April, give or take, and in absolute amount is about the same, IPOs planned up to April this year compared to last year. I think the most important IPO season is from May, June, so let's see what happens there. We don't know yet, but it's of course depend a little bit on market behavior and volatility.
Yes. Here's a question about growth. What is your view on inorganic growth going forward? I guess that means acquisitions, right?
Yeah.
Inorganic growth.
Yes.
What is your view on that?
Yeah, I mean, to be clear, our plan is an organic plan, and we have fantastic growth and also critical mass and scalability as you know, in the plan. That said, if there is an opportunity, especially in our Nordic footprint, we will look at it. We are good at acquiring companies. We acquired a number of companies. The last one was Sbanken in Norway a few years back. We know that we can do this in an efficient way and bring, if it's new customers and savings capital, then directly onto our platform. For us more is economics. I mean, if it's customers and savings capital, how much do we need to pay for it?
Of course, if there is an opportunity, we will look at it.
Good. Can you talk a little bit more about your expectations for growth and savings capital per customer, per geography going forward in relation to the new financial targets that we presented this morning?
Yeah, I mean.
Savings capital per customer
I know, I know. We don't guide on that specifically, but we will see, I would say, growth in all the countries, hopefully a little bit extra upside in Finland.
Yep. Good. Okay, Andreas from Danske again here. Is there a potential to spend more to acquire customers in Denmark, Norway, and Finland now when you do not have any real competition and churn is so low and the payback of new clients seem to be very quick?
Since we have a very efficient growth and it's mostly PR based, word of mouth based, et cetera, we don't really need to spend a lot on marketing. But that said, we've done experimenting last year with adding money in Denmark, for example. We also spent a little bit more in marketing this year compared to historic trends. But I think it's a balance there as well. Since we have a very efficient machine, we don't want to jeopardize that too much. But at the same time, of course, we're going to see what we can do with marketing. But then we're also going to be very specific on how much we pay them per customer if we do an effort like that.
Good. A question about competition. Where are you most worried about competition increasing? You can interpret that as like sector or geography or any way you want. Competition.
Yeah, but overall, since Sweden is the biggest market in Nordics, other players is normally starting to look here. I mean, I'm not afraid of competition. I think competition is good, and we've always been a challenger ourselves, and we don't mind to be challenged. Of course, we can never lean back. We need to work hard every day to build this best platform for savings and investments. I think our true differentiator, where we put a lot of focus, is this one-stop shop to have everything when it comes to savings and investments on the platform with a great user experience. I think we're really sticking out there as a differentiator.
Yep. In terms of revenue margin guidance of 45 basis points, can you say something about the trends there about on the different four markets, the 45 basis points in relation to the four markets?
Yeah, I don't go specifically into to the trends, but I think we are supported in all markets with customer growth, savings capital growth, but not least that people take up more products. Of course, we are supported outside of Sweden with this high share of cross-border trading where we have higher margins. Of course, the customer growth then in Norway, Denmark, and Finland has an upside, especially on the brokerage part there.
Mm-hmm. Good. Now the questions keep coming in here as we get the pace going. You talked a lot about funds, Lars-Åke. We have different models for funds across the Nordics. How can the Norwegian fund margin hold up so well despite your switch to a platform fee and removal of the retrocessions in Norway?
Yeah, I think we managed that transition in a good way and also led the way when it came to pricing in that market. Active fund is 30 basis points and passive in 19 basis points, but on average at least 25. And you know and also on foreign funds we have FX, so that adds to the margin as well. We are close to 30 basis points margin, which I think is good, but it's also been popular with the customers since we launched that. We see the growth in the funds overall has been exceptional in Norway last year.
Good. Thanks a lot, Lars-Åke. We have a couple of questions here that are not being answered, but I think I'll save these for the afternoon because we have sessions coming up that better fit into these questions, and in order for us to keep the schedule as we want to as well. Now it's time for lunch, right?
Yes. Now it's time.
Now it's time for lunch time.
We got the hook up for everyone there before.
Sorry about that. We all need something to eat and drink now after an intense first two-hour session. Let's take 30 minutes, guys, and we'll see you back at 12:20. Bye-bye for now. Welcome back, everyone. Hope you had a nice lunch break. You are attending the Nordnet Capital Markets Day of 2022. The next person up on stage is Rasmus Järborg, our Chief Product Officer and Deputy CEO. We will now talk about growth, right?
We will indeed.
That is something you're into on a more personal note as well, correct?
Yeah, I'm sick of it. It's a joke that never gets old.
You will kick this off first, Rasmus, and then you will have some company on stage from some talented people from your team, correct?
Yeah, I'm very proud to bring my entire business area management team on to stage today and to tell you more about all the exciting things we have in store for you.
Good. After you all have finished, we'll do a Q&A session that will take something around 45 minutes. Please take it away, Rasmus.
Thank you, Johan. We're going to spend some time this afternoon taking you through the various growth areas within Nordnet, and really tell the story behind the strong, sustainable growth that we boast about, which is part of our position of being long-term winners in this space. Let me start by taking you through the six main revenue growth drivers behind this 40% growth in top line we've seen from 2018– 2021. Starting with new customer growth, perhaps the most important. Of course, we're always looking to bring on new customers onto the platform in each of our four markets. We've seen fantastic development in that over the last few years. These new customers, as well as existing, put new net savings onto the platform, another really important source of revenue growth.
Then combined, all these savings, of course, on the platform should be growing. That is, of course, not just the goal of us, but the goal of our customers. We want to help them achieve a better return. We get into products, of course, product penetration. I'm going to come back to this later, but when we look on new customers on the platform, typically after 24 months on book, they go from zero to 2.2 products. Really getting our customers up this product penetration curve and upselling and cross-selling is what it's all about to drive revenue. Another important driver, dear to my heart, of course, is new product launches.
Not only are we expanding products within our existing product lines, we are bringing new product lines to market and introducing new product lines into our countries outside of Sweden that aren't as fully penetrated. Finally, we had a question about this. We have opportunistic M&A. Now, this is not something we are planning to do, but it's something we are ready to do should the opportunity arise. As Lars-Åke said in the Q&A, we have a very strong history actually of identifying and acquiring, and most importantly, integrating acquisition targets onto the Nordnet platform, eQ Bank in Finland, Netfonds in Norway, and a number also of smaller customer or asset portfolios, which we can do as bolt-on acquisitions.
Here you see, and it's really just an extension of the chart that Lars-Åke showed earlier today, how these customer acquisition and savings capital growth has taken off since we launched the new platform at the tail end of 2018 and the beginning of 2019. Both new customers on the platform, but of course, a commensurate increase in savings capital driven by new net savings as well as valuations. Talking about new customers, let's spend a few minutes on who these new customers are. To a large degree, the new customers on our platform are younger. As you can see here on the chart, top left, they skew younger than our population as a whole, which already is younger than the Nordic populations. We have more women on the platform, which is great for us because women typically have a better return on their investments.
Something to think about. These new customers are also responsible for a staggering 60% of new net savings that were brought onto the platform in 2021. Naturally, they have less money than our existing customers. The typical pattern is new customers come on with less money to dilute the average savings capital, but our existing customer base grow their assets, which enhance customer savings per customer. That's the sort of pattern we're seeing here. Overall, there is growth in that savings capital base. What's really encouraging to us is to look at the patterns of behavior and investment in these two new cohorts. They invest very much like the earlier cohorts, nothing wild here, but encouragingly, a greater proportion in mutual funds, which my colleague Gabrielle will talk more about shortly.
In terms of channel and behavior, we do see that the newer cohorts prefer the app, both onboarding and accessing the platform through the app, but also putting through 55% of trades on the app versus 25% for earlier cohorts. It's very clearly an app generation. There are some differences in cross-border trades and brokerage turnover, and together with the product mix, this leads to a higher revenue margin in newer cohorts, 85 bps for the 2021 cohort versus 79 for 2020 versus 45 for the pre-2020 cohorts. Overall, this means that we have embedded growth potential in this customer base. With a very high retention rate of 98%, this younger customer base means we have considerable growth potential. The majority of wealth creation really happens between the ages of 40 and 60.
As you know, people have had a good career with salary increases, their portfolio has performed. Maybe they've sold an apartment or a house or two. They receive an inheritance, and all this really increases the wealth on the platform. Theoretically, even if we stop customer intake right now, we do have embedded growth potential with all these customers on the platform today. Here we see what I referred to during the Q&A, the product penetration over time and the savings capital per customer over time. But really encouragingly, the two new cohorts have a higher degree of product penetration coming up to the two plus level already after half a year. Of course, savings capital is following earlier years.
Now, really to tell you more about these products, what we've done and how we plan to continue to grow, my management team will take you through our four main product lines, starting with Quincy Curry, who's our new Head of Securities Brokerage. Welcome, Quincy.
Thank you, Rasmus. As Rasmus mentioned, I'm Quincy Curry. I'm the Head of Securities Brokerage here at Nordnet. I recently joined Nordnet at the beginning of this year after two years in a fintech startup here in Stockholm and 11 years in equities with Bank of America Merrill Lynch. At Nordnet, we have a fully integrated securities brokerage business. We're number one in Denmark, Norway, and Finland, and number two here in Sweden. We process over SEK 7.3 billion in traded value per day, and we offer over 100,000 exchange-traded products on our platform. Further, we complement that with flexible FX arrangements and margin lending. Our customers experience additional yield with our stock lending programs within their pensions, where we split with our customers the income on stock lending 50/50.
We offer electronic trading in 25 venues across seven countries, and our brokerage desk is open from 8:00 a.m. to 10:00 p.m. , further extending that an additional five countries. Customers can invest in over 1,000 ETFs and can experience commission-free trading in over 12,000 ETPs through our Nordnet Markets, which allows customers to express bullish or bearish views with varying levels of leverage across stocks, indices, and sectors. Our IPO business is strong with pan-Nordic reach, and our customers can access all of this through a variety of accounts available in each of the home markets, many of which are tax-efficient wrappers. We've recently reorganized to make sure that we can offer our customers an improved experience and journey. We're bringing tighter connection between the business, the brokerage desk, trading technology, and our operations to ensure a smooth journey for our customers.
Over the last few years, we've done a lot of work to improve our platform. We have improved trading functionality on the web and capabilities on the web and in the app. We've included richer market information, improved graphs, real-time prices and market data, improved screeners, and we've introduced a persistent order panel on the side of the screen, which makes order entry easier for our customers. Through our connection and partnership with Citi Global Markets, we've improved our offering and our listed instruments in Germany, the U.S., and Canada. We are positioned very well to capture the IPO business expansion with cross-border selling. We act as selling agent in Sweden, Denmark, and Norway, and as issuer agent in Finland. We do not do underwriting, so that makes us a natural partner for many of the banks in the Nordics.
Because of our Pan-Nordic reach, we can avoid saturation in any one market. We also have an attractive securities lending program through our pensions, which we've improved quite a bit, and we look to improve further. Within the IPO business, we further offer additional products for the management and the employees of issuer companies so that shares and unlisted warrants and long-term incentive programs can be rolled into the pension, making it tax efficient. We've noticed and we can demonstrate that this not only leads to revenue within the deal, but also long-term customer relationships. We've seen significant growth in the securities brokerage business over the last few years. We look to continue that growth by continuously improving our products and service mix.
Cross-border transactions are a valuable source in our revenue stream, and we look to improve that for our customers by extending electronic trading to additional European markets, starting with electronic trading in the top names, with trading on London Stock Exchange and followed by other names with trading on Euronext throughout Europe. Our stock lending program, as I mentioned, is a key differentiator for us, and we look to extend that further by including international names within the availability as well as extending the program into retail depot accounts. Our ETPs and ETF business, we'll continue to invest in, and our IPO business will remain a focus, including investments in systems that will enable better facilitation of placements.
We continuously look to improve the customer journey, and with that, we will invest in our operations so that we can have better experience for our customers around transfers into Nordnet accounts and around corporate actions and dividends on their holdings. Cryptocurrencies is a topical, it is topical at the moment, so I'm going to spend a little bit more time talking about our plans there. We've seen a significant increase in interest from our customers around cryptocurrencies and cryptocurrency-related instruments. However, right now the regulatory environment is still evolving in that space. We've put the focus on educating our customers so that they can understand and are aware of the different types of products and the risks associated with the products in that space. We've revamped and are relaunching our educational websites in each of the countries.
Currently, we provide access to crypto-backed ETNs and ETCs that are traded on regulated trading venues. Approximately 1% of our customers hold crypto-related assets, which comprises half a percent of the savings capital. Last year, we processed over 1 million trades in crypto-related assets, with the bulk of that being in Bitcoin and Ethereum underlyings. We do not currently offer wallets or physical crypto custody or trading. We will continue to monitor that space for further developments. With that, I'd like to invite my colleague Gabrielle to take you through mutual funds.
Thank you, Quincy. Hi, everyone. I'm Gabrielle Hagman, and I'm heading the mutual fund business here at Nordnet. I joined last year in April, and that was an effect of creating mutual funds actually as its own business area. Prior to Nordnet, I was at Danske Bank for over six years in different roles, and the last one was heading institutional banking in Sweden. Prior to that, I was at BlackRock covering the Nordics, and I started my career here in Stockholm at Swedbank Robur. What a year it has been for the fund business. I am so very proud to stand before you today and present this business area and the growth journey that we are definitely on. I will start with our starting point where we are today.
We have over 2,000 funds on the platform, a wide range between index funds to hedge funds. Our savings capital on the platform is SEK 154 billion. A typical day at Nordnet, we have SEK 118 million in net inflow. We have a fully scalable digital platform today, a family of users funds co-managed by Nordnet, and a really large opportunity potential within the saver segment, and I will come back to that later on. As I mentioned, mutual funds became its own business area last year, and we consist of three legs. We have the platform, and we have our Nordnet-branded funds, soon to be our own fund company, and I will come back to that later. We also have fund operations in mutual funds, and that is since January.
The opportunity to have both back-end to front-end within the same team and with the same business area, we have the ability to create an even more smooth customer journey for our customers that invest in funds at Nordnet. 2021 was a really strong year, both in numbers, absolutely, but also when it comes to initiatives. In making mutual funds its own business area, I would say was absolutely an enabler to make that happen. I'm also happy to share with you that we recently launched something that we call Move My Savings, and it's an automated transfer customer journey when transferring your savings fund and securities into Nordnet. If you haven't tried it out, I encourage you to do so. It went from a pretty manual setup to a real smooth customer experience.
During 2021, we also sent in the application for our own fund company, and it's a natural step for us. We have seen a real vast interest in Nordnet-branded funds. We actually grew our assets under management during 2021 with over 100%. Not only that, we are also looking into further products for our Nordnet customers that we see an interest in. Our very popular tech fund was launched last year just before summer, actually, and we have seen an interest there as well, reaching over SEK 1 billion in assets under management in that product. We're really, really happy with that launch and more to come. We also spent some time on our monthly savings plan last year, doing it even smoother for our customers, and adding some add-on features on there.
We ESG- aligned our global index fund family, making it Article 8 as an important step in our overall ESG ambition here at Nordnet. We also did some features on the platform in terms of a new screening tool, adding sustainable data on Article 8 and Article 9. When doing so, we were actually the first out in the Nordics to do so. Before I go into the plans for 2022 and beyond, I would like to talk some numbers with you. Looking at the chart, you'll see that the majority or actually 50% of the savings capital lies within Sweden today, followed by Norway with 25%.
Looking at the growth numbers, it looks good for all the countries and, for natural reasons, due to a lower base, Norway, Denmark, and Finland have stronger growth numbers, but in absolute growth numbers, all the countries look, I would say, pretty good. Looking at 2022, we of course have big plans. One of them is launching our own fund company. What's more interesting for you is not that we're launching a fund company maybe, but what we will do with that. We have been talking a lot about the saver segment, that is an important segment for us at Nordnet and for mutual funds, that will absolutely be a focus area going forward. Not just in terms of products, but also making the platform and the user experience more saver-friendly.
Product-wise, we will launch a portfolio, a series of portfolios that meets the needs for the do it for me customers. An important product that meets the need of rebalancing and finding the adequate risk balance in your portfolio. This will be packaged in fund-of-funds within the fund company. To enable an even more investor or saver-friendly experience, we are creating what we internally call One Flow, and this is about simplifying and helping do it and do it for me customers. Today, you need to be quite investor interested, actually, to know exactly how and what and when to invest that suits you the absolute best. We all have different needs.
Coming back to Nordnet-branded funds, an additional part of the rationale of having our own fund company more than the momentum that I spoke about earlier is actually about taking control. Taking control over cost, margin, ESG, and more so. A part of that entails to insource our Nordnet-branded funds that we have today into our own fund company during the year. We will also ESG- align our Nordic index funds and making them Article 8 as well. Last but not least, I would like to mention that we are building a new digital order platform during the year. It's a big project, so you will see numerous releases during the year. This will create a higher level of stability and effectiveness in the fund business at Nordnet.
With that, I will hand over to Fredrik. Welcome.
Thanks, Gabrielle. Hi, everyone. My name is Fredrik Ekblom, and I'm the CEO for our Swedish insurance company and also head of our Nordic pension business in the group. I've been at Nordnet for eight years now, and before that, I spent 17 years at Swedbank as product manager and head of the investment offer. Here at Nordnet, we offer wide range of solutions for savings and investments within pension and endowment products in Sweden, Norway, and Denmark. This is conducted via our Swedish as well as Norwegian insurance company and also by our local branches in the bank. In Sweden, we offer full range of pension and endowment products for both private individuals as well as corporates. That includes solutions for occupational pension schemes for corporates. While we in Norway and Denmark currently only offer solutions for private individuals.
Since the start of our pension business in the group in 2005, they have focused on democratizing savings and investments by giving the savers and investors opportunity to a wide investment universe within our product to low fees and also promoted by high digital processes as well as automations. We're also promoting a more efficient process for pension transfers and also arguing that we could benefit from more regulations in the matter. You might have seen and heard my colleague, Frida Bratt, talk about this. I want to believe that our work in the matter has contributed to the positive changes in legislations that we've seen so far. At the end of 2021, we had SEK 185 billion in pension savings within the group in our three Nordic countries which we are currently operating in.
You know that we have a fourth one, and I will come back to what we are planning to do within the pension business in Finland as well. We're constantly focusing on improving our customer experience and also adding new products and features to the platform. Last year, we added a number of different products as well as features, and I want to highlight some of those. Looking at the slide you see that, on top we have mentioned the Norwegian occupational pension business. It's actually a product for pension transfers based upon a new legislation that came into force first of February last year. This enable us to compete regarding pension solutions in Norway and customers given the opportunity to transfer pension capital from one insurance company to another.
It was actually up and running the very first day possible, and so far it has been a success for Nordnet with a market share of approximately 22%. Also, we have focused on enhancing our occupational pension offer in Sweden by adding a digital concept for SMEs in Sweden, which has contributed to our continued growth in Swedish occupational pension business. Furthermore, we have also looked into the ability to enhance the process for Swedish as well as Danish pension transfers even further by digitalizing the offer even more. Those two markets are by far the biggest pension markets within the Nordic area. Also, last but not least, as Quincy touched upon before, we have also expanded our unlisted investment offering within the Swedish endowment product, which adds a unique USP to our IPO offer within the group.
To touch upon some numbers, looking at our customer base, all in all, these products, new products, features, and so on, had contributed to our growth. As at the end of 2021, we had 232,000 customers with pension and or endowment policies in the group, with an average of nearly SEK 800,000 in AUM per customer. Also, this has added up to a positive net savings of SEK 18 billion within our Nordic pension business. Although, we see a huge business opportunity with cross-selling opportunities, looking into the number of 21% of the total Nordnet customers that currently have a pension scheme with us. Hence, we see a huge opportunity to add additional policies to the existing Nordnet customers.
With that said, moving forward, even though we've seen good and sustainable growth, actually strong growth, if I may comment, on that, the last couple of years, we still see a huge business opportunity within the pension area. To start with, one of perhaps the biggest opportunities within the short run could be adding a Finnish endowment wrapper. When I say adding a Finnish endowment wrapper, even though we currently see it hard to add occupational pensions in Finland, especially due to the high extent of defined benefits, we do see an opportunity to add an endowment product similar to the Swedish as well as the Norwegian solution.
Given our experience from the Swedish as well as Nordic Norwegian market, we do think that this could be real good feature and good product for our customers in Finland. Also, we're looking into the possibility, as Quincy touched upon before, to add additional features within our existing securities lending program, which already is very appreciated by our customers. Furthermore, we will also enhance the digital process for Swedish as well as Danish pension transfers. As mentioned before, these are super important markets for us when it comes to growth opportunity. Last but not least, we will also look at the possibility to add a Danish life insurance company in order to be able to capitalize on the full growth potential in the Danish market, this by adding a livrente pension product.
With that said, shortly, I think it might be good just to touch upon what is the livrente product. It's a Danish pension product that pays out a monthly amount as long as you live. Approximately 50% of the pension market in Denmark are invested within livrente products. By adding a life insurance company, this product can actually only be provided by life insurance company, we will increase our addressable market with approximately SEK 1.9 trillion. That is today. With the best of our knowledge, this will grow to approximately $2.5 trillion at the end of 2025. You see that this is a huge business opportunity for us. I think I stop there and hand over to my colleague, Jacob. Thanks.
Thank you, Fredrik. Hi, everyone. I'm Jakob Bergfelt, Chief Credit Officer here with Nordnet. Been here for eight years almost. Before that, I did 15 years at Avanza working with credit risk and treasury, both in first line and second line. I'm here to tell you a little bit more about what we focus on within the credit business area. Our target is to be able to offer relevant products that contribute to the nice savings and investment offerings that my colleagues have told you about. Also, more than 10% of our customers' assets usually are held in cash. This is a nice way of using selected lending products to put that money to work. We do this by combining innovation, risk consciousness, and scalable customer journeys, and that's how we aim for creating a controlled, sustainable growth.
The portfolio consists of three products: the margin lending product that we offer on all geographical markets, the mortgage and unsecured lending business that we only have on the Swedish market. 2021 was a good year also for the credit business. We ended the year with a growth of about 30% overall products, and we have a volume now of SEK 25.4 billion in total. This is SEK 25.4 billion that is quite capital-light to be lending, actually. That is due to the high proportion of high- quality collaterals for a big part of the portfolio, resulting in a return on equity on average about above 50% on this book. Some more details regarding the margin lending product. Here, we saw a strong growth during 2021, and grew over 35% overall.
All markets were developing really strong. We passed SEK 12.4 billion in total margin lending volume. This means that almost half of our lending volume is within this book. This is also the most capital-light and profitable credit product of all the ones that we offer, with ROEs in the range of 150%–200%. We achieved this growth due to very controlled credit risk management and focus on customer journeys and scalability. That is how we create a sustainable growth. We offer a wide spectrum of collaterals with over 6,000 instruments on seven different markets accepted. We combine credit risk management with customer needs and make this into products with automated boosts in customers' potential gearing, and also offer automated price discounts for portfolios with really low risk.
This makes it possible for us to offer market-leading prices and also a potential gearing up to 10% the customer's equity. That might seem high, but the average loan-to-value in the portfolio is just about around 25%. Talking about the collaterals, we have a well-diversified collateral portfolio against different instruments with high liquidity, both on individual and aggregated level. This, in combination with active real-time credit risk management, is how we achieve the 0% credit losses, which we achieved also during the market volatility post the pandemic. This is a number that we are really, really proud of. Besides an innovative, scalable offering, both in terms of credit risk management and operational processes, we offer customers a fully digital onboarding process, which we believe is really important.
We also have automated decisions for these customers. Sorry. Going forward, we will work on increasing degree of automation to scale even further, both within operational processes and the credit risk management. Now our reverse mortgage product, which is also targeting the savings and investment customers, mainly the private banking customers and only on the Swedish market. We see that these customers also have a need for a transparent price model with an attractive price. We offer automated transparent discount levels based on the savings capital that they have on our platform. If you have over SEK 15 million with us, you get the rate as low as 0.65%, which is actually the lowest list price in Sweden. This is an important tool for us to retain existing capital and also to attract new customers.
As you can see on the chart up to the right, our mortgage customers have more than 21x the savings than a regular customer do. Talking about credit risk for the mortgage, even though we increased the LTV cap to 60%, the average loan-to-value in this portfolio is around 45%. Not to forget, we also have double collateral in customer savings, leading to a lower credit risk and a more capital-light lending than usual mortgages. This also results in a higher ROE in the range of 20%–25%, which is above industry standard. Besides the attractive and transparent price model, the customer journey is of course important to attract customers to this product. During last year, we launched our fully digital mortgage process with a highly scalable underwriting tool.
Now we are actually able to pay out the loan the day after we receive the the application from the customer. However, most customers are not in that rush, so the average time from application to paid out volume or paid out loan have been reduced from 45 days to 15 days. Now when we have this own process, we are able to look at scaling up the offering on other geographical markets, and we see big business opportunities doing so both in Norway and in Finland. We have actually already started to get it up in Norway. We believe that a transparent price model with pre-negotiated attractive interest rate levels based on savings capital will be very appreciated on the customers of those markets as well, since none of the competitors do that today.
As a complement to these lending products that I've talked about before, we have our unsecured lending business in Sweden. As you can see, down to the left on the chart, our growth within this portfolio has been quite low over the past years, and this is totally in line with our plans. We have no target to achieve high growth or any growth at all within the higher risk segments in the portfolio. Average interest rate is around 5.5%. During the past years, we have seen no indication of worsened payment capacity or increased credit risk due to the pandemic or the other reasons. Besides of vfocusing on keeping the credit risk on low levels all the time within this portfolio, we also work on improving the customer journey for these customers.
We have also in this product a fully digitized onboarding process with a really, really high degree of automation. Over 90% of the decisions that come into this process are actually automated. That is necessary because we need and we are able to get back with a credit decision within 24 hours from the time that we receive an application, usually much, much faster than that. That fast frictionless process is really needed to meet the requirements and needs of these customers. Going forward, we will try to increase the degree of automation even further and also making it easier for customers to move their existing loans to us. Historically, this product have had quite a small overlap with regular Nordnet savings customers.
We have been working during 2021 and will continue to do to make this product more attractive to Nordnet savings customers. During 2021, we received a mix of 50/50 of our Nordnet-branded loans and the other brand that we sell our loans under that is called Konsumentkredit. We are planning this development to continue since we have plans of several new product launches within this area to attract new Nordnet customers. One very, very successful example of that is the offering that we have made during 2021 to IPO company staff, where we offer a tailor-made unsecured loan to this company staff as one part of making our IPO offering more attractive. With that said, I welcome Rasmus back on the stage.
Thank you, Jacob.
All right, you now heard from the four business area heads about our exciting products and both what they've delivered to date, but also what they will deliver, hopefully in the future. With that, let me just complement this by saying everything we talked about here today, of course, the channels, the products, everything on the platform is for our broad retail offering. In addition to that, we do have two distinct customer offerings. Starting with private banking. Now, this is not your traditional PB. This is rather a modern, holistic private banking offer, and it's free for anybody with over SEK 2.5 million in combined savings. That's you, your spouse, your occupational pensions, and what you get as a PB customer at Nordnet is preferential commission rates, preferential interest rates, better customer service.
We answer the phone in 30 seconds flat, preferential access to IPOs, private placements, and all that stuff. For example, the mortgage that Jacob just described was developed entirely for this group. We can really see that that product does what it says on the tin. It attracts high-net-worth individuals to the platform, and for those that are already here, it encourages them to aggregate their holdings onto the platform. We can clearly see that in the data. As in, here the average savings capital is around SEK 9 million per head, as opposed to around the SEK 400,000 mark. We've seen a huge increase in asset growth within the PB community at Nordnet of almost 50% over the last year. Another distinct offer is towards our partners. These are IFAs or independent financial advisors.
By offering a platform for these IFAs, we really open up.
A session on this growth part, and so everyone back on stage and like Rasmus and Quincy in the back and the rest of you guys in the front. I think that's how we do it.
That's how we do it.
Just fire away with your questions, guy. Press the Q button and just shoot them to me and I'll pick them up. I can start with you, Jacob. A question that was asked before lunch and partially answered by Rasmus, but you are the better person to answer it. Resurs is under investigation from the Swedish regulator regarding how it originates consumer credit loans in Sweden, credit pruning in Swedish. Is this a risk to Nordnet? And if it isn't, why? Jacob.
Well, I have to start with that we are following this, of course, in media, and we don't have more details than what's said that. In general, credit assessments is a really important tool for us to do in a compliant and well-functioning way. I would say that regulatory compliance and good governance is one of our top priorities within the credit area. We are very confident that we are using the right tools to assess the ability to pay back the loans for all customers. We are confident with this within this area. Also, I can add that last year was a really high focus year. It's always highly regulated, the credit area.
Last year, we had two new regulations coming up, both the guidelines from EBA on loan origination and risk monitoring, and also the new guidelines from the FI. We have been very diligent in our work implementing this, so I'm very confident that we have all of these places, these things in place.
Thanks a lot, Jacob. Gabrielle, question to you. You talked about funds. Question about fund margins. What can be done about the low fund margins in Denmark and in Finland, and what does it have to do with? Is it the asset mix or is it more competition in these markets?
Well, thank you for the question. Now you've pretty much give it away there. It's a product mix.
Okay.
It's the answer lies in the product mix. We have a lot of index funds in these countries, but we are looking into that. As I mentioned before, in our own fund company, we are looking to launch these solutions products that I think will help with that fact. Also looking at Denmark, we have a different business model there, and we also have the different type of funds, which is very Denmark typical there. It's the answer lies in the product mix for sure.
Okay, great. A couple of questions from SEB. Jacob at SEB, I think I'm going to ask you them, Rasmus, about customer segments and how they behave. Do younger clients behave differently compared to older customers? And if so, how? I'll start with that one.
Sure. That's a very interesting question. I think some of that stats will be in the pack, by the way, that we release after this. Generally, what we see is very encouraging. I think when it comes to the fundamental investment style, it's very similar between younger customers and older customers, but also between newer cohorts and existing cohorts. So it's like I said in my remarks, the asset mix is very similar. It's skewing towards mutual funds, which we think is a good thing, and there's nothing wild in there, really. In terms of behavior, of course, yeah, it's different. They're onboarding in the app, they're accessing us through the app, and they're putting their trades or investments through the app.
They also have many, many more sessions and a higher DAU/MAU, which is daily active users divided by monthly active users, engagement rate, meaning they're engaging with their portfolio on a higher level. We've seen a higher asset turnover for the 2021 cohort. Not entirely sure what that's about. Of course, the traded amounts, the ticket sizes are smaller because they have less savings capital on the platform. We've seen that in the past, and it's nothing unusual. They're going to come up the curve with everybody else. Very encouraging and a very high quality cohort, including the younger customers.
That was about age. On the same topic, Jacob also asks about if there's a difference in behavior between new users, people who have used Nordnet for less than a year, and more experienced users. Do new customers invest more in funds compared to stocks? Is there a difference in investment pattern? Rasmus.
I think I just answered that, so it's the same comments.
Yeah. Okay. On the mortgage side, Jacob, you talked about that. You talked about launching that in Norway. Do you expect the same growth on the Norwegian mortgage as the Swedish one?
Yeah, we see a really big demand from these customers. We think that if we launch it at the same attractive levels with the same setup that we plan to do, we will see a growth, yeah, that looks quite much as we have had in Sweden.
I can add that, you know, final pricing is in place, but we have the very firm ambition to have the lowest priced mortgage in Norway.
Yeah.
Fredrik, a couple of questions about pension.
Yeah.
Let's start with this one. How much has the inflow been in the pension operations for occupational pension since the deregulation in Sweden? We'll start there.
Yeah. Interesting question. Last year we saw a positive inflow of approximately SEK 3 billion in Sweden, and that could be compared to roughly SEK 1.4 billion in 2020. Hence, it's quite a significant increase, although we still see an even bigger growth potential moving forward.
Yes. Pension and marketing, will you increase marketing to enlighten investors of the possibility to come to Nordnet? Is that on the horizon for you, Fredrik?
Yeah, I mean, everything is of our interest. I mean, definitely, we will definitely look into all possibilities in expanding our offer even more. Indeed, we don't exclude anything there.
Yes. Another question about pension. Does it still require a lot of manual handling, filling forms, et cetera? You touched about that in your presentation, I guess.
Yeah.
Yes, right?
It's a super interesting question. Even though we've seen some positive changes, I mean, perhaps some of you have seen Lars-Åke Norling's comment yesterday, arguing that we need a similar transfer hub in Sweden as we've seen implemented in the Norwegian EPK setup last year. I mean, even though we are digitalizing and automating our processes, we are in the hands of our competitors. We need a standardized automated process for the Swedish pension transfers.
Actually, one question just came in on the same topic. Sweden is still manual, but how about Norway? Is that completely digital now with this new transfer hub?
Looking at the Norwegian EPK product, it's definitely more or less to nearly 100% automated processes. Indeed, Norway and also I perhaps even though it's not really in the question, I could say that even Denmark have a standardized automated transfer process. We are somewhat behind in Sweden.
Of course, a digital transfer process benefits us as the preeminent player within digital pensions. We've seen clearly in Norway that of the pension assets moved to the EPK process, we've taken a 20% plus market share, which is the number one market share of moved volumes. You know, we stand to gain from digitizing and making it easier for our customers to move their assets to us because we have both the user experience and the products that they want to achieve in their pension savings.
Correct.
Okay, thank you. Quincy, a question to you. There's a lot of young people now starting with stocks, and you talked about crypto and that topic as well. You have also a product with high leverage. Is that, I mean, how do you see the responsibility of us offering this product to young people?
That's a really good question. I think one of the things that's first and foremost for us is making sure that our customer base are well educated and informed when they're making trading decisions. We have a lot of educational materials on our website. I mentioned that we recently updated and are launching new educational materials around crypto, but we have similar educational pages around other complex products, including products that have leverage embedded within them. In addition to that, we also require that customers are able to demonstrate their knowledge and experience before trading in such products. We have screeners prior to trading that ensure that the customers understand the risks, and they can demonstrate the knowledge of what happens within the products in different market conditions.
Good. On the fund topic, I think I direct this question to you, Rasmus. What is your preferred business model for your fund business? The kickback commission model versus the platform fee model. Can you please elaborate a bit on the pros and cons of these two models? Secondly, how fast would you be able to transfer your to the platform fee model if that was needed?
All right. Well, let me speak to that a bit and then invite Gabrielle to correct any mistakes I may make in my comments. I think it's interesting because we actually are fielding both these models, even three different models, currently. In Norway, we have a clean model with a platform fee. We've had that live since September of 2020. We're about to lower the prices and change them up a bit from first of April this year. In Denmark, we have a separate type of model where we actually refund retrocession fees based on the amount of retrocessions generated by customer investments. In Sweden and Finland, we have the traditional retrocession-based model. We see both sides of that.
When it comes to pros and cons, I mean, it is, for us, we're almost agnostic. We can run either. Of course, from a customer perspective, which we always have to bear in mind, to a degree, it is simpler with one price. Now, we're very clear and transparent on our platform about what we receive in retrocessions. I think that is the key to this. As an open architecture platform, we really have no conflict of interest in, you know, distributing a higher retrocession fund or a lower one. It's up to the customer. We don't see that inherent conflict that maybe an advisor does or somebody who has a capped fund business in their big incumbent bank. Even so, you know, we have the technical model in place, we have the financial model in place.
Would we get some regulatory guidance here? Clarity finally from the regulator in Sweden, you know, we could rock and roll with the drop of a hat. Gabrielle?
Well, what's left for me to say? I don't know. I think one thing to mention and to you know to the one that asked the question is it's a big conversion for the end customer here we're talking about. Rasmus said, you know, Nordnet is ready, but is the retail or the saver investors ready for that conversion going into a like a platform fee model? That will be the big shift, I think, in the market and in the industry. Yep.
Good. Thanks a lot. We'll stay on the topic of mutual funds. You talked about the new fund company, Gabrielle, that we're launching this spring. Will that have an effect on the profitability of our fund business? Can you comment on that, Gabrielle?
Well, I can try. I don't want to comment on the actual numbers here, but of course, we are looking into what, you know, margin and profit this will bring. For us, it's very evident that the interest in Nordnet funds is strong. We are also doing this as a demand from our customer base to look further into our Nordnet-branded funds and what we can do around with that and meet the expectations. I don't know, Rasmus, do you have anything to add?
No, I think that more or less covers it.
Yeah. Okay.
Quincy, question to you. This was up before, but plans for opening up new markets, for instance, Hong Kong. What about that?
Yeah. Well, our plans in the immediate, as I mentioned, are expanding through Europe. We're opening up directly to Asia, which has a set of complications which we're looking into in terms of coverage. However, we do currently offer access to our clients through our U.S.-listed instruments that have the top names in various markets in Japan, Hong Kong, and other parts of Asia, including Australia, through ADR. Customers can get access to those markets via ADR, and we've improved the screeners and on our website and in the app, I believe in the app as well. Now customers can more easily find the names that they would like to get access to in those regions on our platform.
Thanks a lot, guys. I think that is the Q&A now. There are a couple of questions that I have received that we will bring up in the general Q&A at the end of this session. I will ask you now, please, to step down from the stage. Thank you again, guys. Now it's time for some more hardcore financial stuff, actually. We will talk about our operating leverage and our capital-light business model, and the right people to do that is first our CEO, Lars-Åke, and then our CFO, Lennart Krän. Please take it away, Lars-Åke.
Thank you, Johan. We're going to deep dive in both operating leverage and also our capital-light business model. Starting with the operating leverage part, you've seen this slide before. Fantastic scalability in the business. We have managed to keep the cost flat for four years now in absolute terms, in spite of a yearly revenue growth during the same period of 40%. Having the cost margin going from 38 basis points down to 17 basis points, you see it's a downward trajectory. Initiative-wise, I think we covered some of those as well already. I mean, scalable tech platform that Elias talked about, that's the key, especially the cloud-based platform. Then it's the process simplification automation, and this is probably the most important area. I talked about this.
It's a win for the customer, it works better, but it's a win for us because we save money. We're going to automate everything that's possible to automate, both smaller things and larger things like the customer journeys. We see already effects. We, for example, monitor all incoming cases from customers, try to address the pain points, and we see a very clear downward trend on incoming cases per customer. That means in customer service, we can have a lot more customers on the platform without adding additional resources in customer service. Same we see on the operations side, where we now especially the Move My pension transfer of securities. We're going to address corporate actions and other big journeys as well.
That means that we can also have more customers without adding people in operations, and over time, even downscaling the operations part. This is a very important area that we work very actively with every day. It's this word-of-mouth customer growth. We have a highly profitable customer growth with low acquisition costs and high lifetime value. I'm going to cover this specifically in the coming slides. This managing third-party spend, everything from the end market data costs to transaction costs versus the different trading venues, to authentication costs for authentication itself on the app and web, et cetera. We have a long list of initiatives in this area, and we've already saved a lot of money, and we will continue to save money in this area.
A little bit on the customer growth. As you know, we have the savings economists in all countries, and they are very visible. Also here is a win-win because they are really good for our customers. They're on the customer sides, they educate about savings and also influence the regulation and also legislation around savings to be more saver- friendly. It's also win for us because they drive a fantastic amount of PR for Nordnet and makes Nordnet really visible in the public space. Then we have those fantastic communities as we have as well. We have more than 1 million members in our communities with millions of views and streams and sessions. On YouTube and on Facebook, Shareville we talked a lot about already, Instagram, LinkedIn, et cetera.
Of course, this community is also creating a lot of visibility for Nordnet as such. If you couple this PR visibility and visibility in the communities with that we have now critical mass when it comes to number of customers in each country, that really allows for a word-of-mouth based growth. If you see it in the bar to the left, around 65% of the customers come in basically without cost, either that they've typed nordnet.se or that fi or the no or dk straight in and become a customer, or that they search some word on Google and get in that way. Only around 35% we actually pay for that search. We pay for words or we pay affiliates.
Highly efficient, and at the same time, we have also very high stickiness on the platform and low churn last three years on average 2%. If you then look at the graph to the right, you see that acquisition cost is low. It's around SEK 300 per customer, and then we try to throw all the costs we can possibly find related to customer acquisition on that number. We're not trying to be conservative, on the contrary. The lifetime value with the low churn and high income per customer is around SEK 20,000 per customer. That gives them a lifetime value versus acquisition cost of more than 65x , which is really very high for being a digital company.
Most digital platforms are happy if they have a LTV to CAC of 4x or 5x , and we have 65x . This is, of course, a really important part of also profitable growth for us, that we have a tremendous profitable customer growth. We also see all the focus on operating leverage and efficiency that it also impacts the efficiency measures. Cost to income, it has been going down a lot the last couple of years, and we are currently at 31%. Of course, with that also driving the profit margin, this is profit after tax, up to 55%, which is also very strong.
This picture we've seen, I mean, all in all, very strong financials, in spite of this high revenue growth of 40% revenue growth, on average the last four years per year, stable costs. We are, we say, a tech company, but we're definitely a profitable growth tech company, which is important, I think, not the least in this market climate with high interest rates is then driving future profits down, but we generate profit here and now. With that, Lennart, I hand over to you to talk about the capital-light.
Thank you very much. One of my favorite topics. To start to say, yes, in addition to the operating leverage, which we have in the business model and the platform, we also have a very capital-light business model. By that, I would say that, yes, out of those SEK 800 billion about our customer savings capital, only 10% ends up in our balance sheet. The rest, 90%, is in the off-balance sheet part. That is what we do promote, really. That is the business of ours. We are not a regular credit bank. We are not a lending bank. Still, we need to do something with those deposits because those turn up in our asset side as liquidity. We also want to support the off-balance sheet part of the business.
That we do, as Jakob already told you about, with the margin lending product, which actually enables our customer to leverage on their assets, which also the mortgage do, because the mortgage and the housing is, for most people, the greatest, largest investment that they have. If we can help them leverage on those, that's great business for our customers, and it's good business for us as well. Then we also have this unsecured portfolio of SEK 4 billion, but which we try to hold as stable as such on a SEK 4 billion level to say. The off-balance-sheet part—only 10% of all savings capital is on-balance part , so that's the capital-light part. It's also, with those 10%, very important for us to keep down the capital requirement for those.
That is what we do with the margin lending product. It's a risk weight of 10%. The mortgage, we have a risk weight of about 20%. Of course, the unsecured is 75%. Then you look on the liquidity portfolio to say the residual, that is about two-thirds of the liquidity, which we do not lend. We have to do some return on that as well, of course, but we don't want to take risk. That one we use is to optimize the capital utilization. In the present interest rate environment, we do not yield anything. I heard the questions before here and saying, what happens if the interest rates go up? First of all, I think it's important to know that the funding side is deposits.
We didn't decrease the deposit interest rate when the interest rates were going down, so we will not increase it when it goes up either. We'll see when that happens. That of course, except for Denmark, we already charge negative interest rates, as the market does as a whole. So what we have here is a potential of SEK 50 billion with 1% that would have, just a simple calculation of SEK 500 million extra in revenue. We don't know how that ends up, but that is what we can see. Also it is important to say, is it the underlying interest rate or is the credit risk spread that really increases? Because that matters on the maturity of the investments we do have when we can roll them over to a new part.
Of course, there are also interest rate increase potentially in the lending products, but those are due to competition and the market as such and the central bank. We will see where we end up, but there is a potential for it as well, as such. The third part is also, I mean, I said it's a capital-light model, 10% on balance and capital-light, less quite little capital requirement. But that is due to the credit losses that we also see. Margin lending, zero credit losses in the volatility we saw in first quarter of 2020, when the stock exchange decreased in value quite significantly. Mortgages, zero since we launched the product. And about SEK 36 million on a yearly basis on the unsecured portfolio.
That has been stable for quite some time, and we see it going forward as well. That is also due to, as Lars-Åke already told you about the low credit risk we have, and that is the upside of the interest rate, which is about 5% today. This all leads us up to a very solid capital position where we have a capital ratio of 21.6%, which is good if you compare it to the requirement that we do have 17.1%. We have a great buffer on the risk-weighted capital requirement. Also on the non-risk-weighted requirement, that's leverage ratio. We have a requirement or are supposed to have 3.9% in leverage ratio, but we had at year-end 4.8%.
I say, yes, it's a solid situation. Where do the risks appear in those measurements? That we can see, yes, we have a capital base, own funds, whatever you would call it, of SEK 3.7 billion. The leverage ratio requires about 3.1%, and the capital adequacy and risk-adjusted about 3.0%. With the leverage ratio, it's not the decrease of equity that we're afraid of, not even the risk adjusted though, but we are exposed to high and quick increases of deposits because that is what grows our balance sheet, and that is the leverage ratio measurement. At year-end, we were able to take on SEK 46 billion more in deposits without breaching the minimum requirement. That is on top of the almost SEK 70 billion that we already have in deposits.
It's a significant growth that would be the case if it would hurt us. As you can see on this picture here on the right side, that has never occurred. It happened that we increased the in-deposit by SEK 20 billion, 22-23 billion in a month or in a quarter, and that was during the first period of the pandemic, Q1 2020. Since then, or even before, nothing had happened. It grows alongside with the customer growth and the equity growth. On the capital adequacy, risk-weighted, we have a Pillar 1 of SEK 1.3 billion, and 300 of those are the operational risk, and about SEK 1 billion is the credit risk. In addition to that, we also have the Pillar 2 part.
That is all due to the credit, the liquidity portfolio, where the credit spread risk is the main driver of this one. We're using standardized models for all our risk-adjusted capital requirements measurement. We're looking on seeing if we can do something there and actually reduce it further on. Still, the constraint is not that part, it's the leverage ratio. This capital-light model, which is not like other banks, as I said, that gives us the benefit of yielding 44% on equity. The return on equity is 44% in 2021, which is a very, very high figure, especially in the banking world. That is due, as I said, to the capital-light model.
The other thing that this capital-light model also gives us is the possibility to keep the dividend ratio of 70% on a yearly basis of net income profit, and still being able to grow the business as planned and according to the financial targets, where we actually go for 15% additional customers every year. I think that states the last part of today's. No, you have some conclusions, Lars-Åke, yes.
We'll do a short Q&A on this session, the operating leverage and capital-light, before we let Lars-Åke conclude the day. Just a couple of questions have come in. I'll start with this one. On the net interest income part, if 10% of your assets are held in cash, you can use a roughly fixed portion of that as funding for margin lending of some 300 basis points. Should we assume that the net interest income at that margin grows in line with the savings capital? You get the question?
Can we have it once more? There were quite a lot of ifs and buts in that one.
No, the savings capital varies.
Yes.
We use some of the cash that the customer deposits with us as funding for the margin lending at 300 basis points. Does these 300 basis points, the income from that business, vary with the size of the savings capital of the customers?
The margin lending is the lending product you say.
Yes.
has nothing to do with the funding side. We will still have the funding at zero interest rate.
Okay.
I think the question was if it grows with savings capital. I think it more grows with the customer base.
Yeah.
Of course, the asset side is also a part of that equation. It's both important to in-grow customers and savings capital.
Okay, thanks a lot. If you do mortgages in Norway, you spoke about, and also in Finland, how will that affect our capital level and leverage ratio? If you could comment on that one, Lennart, please.
It will not affect the leverage ratio as such because either it's with the liquidity portfolio on the asset side or it's in the lending portfolio. That's equivalent to say. The other question was...
Yeah, what was it?
Capital requirements.
Capital requirements, yes.
Yes, as such, the mortgage portfolio do drive the capital requirement a little higher than the liquidity portfolio, but that is, as I said, we do always use the liquidity portfolio to optimize this one in return or usage of capital. So that is how we do work. We're not constrained on capital requirements.
Yeah.
We're constrained on leverage ratio. Also we have this double collateral also in Norway on mortgages. We take the lien on the property, but also collateral on the portfolio for the private banking customer. It's quite efficient.
Thanks a lot, guys. I think we save the remaining questions until the general Q&A in the end that are more of general nature. What is left here today, thank you, Lennart.
Thank you very much.
You can step down. What is left here today is for Lars-Åke to summarize the day, and after that we'll have this general Q&A. Please, Lars-Åke, everything we heard in four hours in five minutes.
Yeah.
Up for that challenge.
Yeah. It's going to be a short summary, so we have time for Q&A. Yes, want to reiterate again our key strategic ambitions, starting with the customer side, we want to be the number one choice for the Nordic savers and investors. We want to have this one-stop shop with a fantastic customer experience and overall attractive pricing. To achieve this is our brand promise and building the best platform for savings and investments that every day launch new features in our app and web. We launch new exciting savings products, and we also automate the customer journeys.
Even though we don't have NPS as a financial target because it's not a financial target per se, it's of course one of the most important strategic targets to continue then to strengthen the number one position we have in Finland, Denmark, and Norway, and close the gap to Avanza in Sweden, where we have a currently strong number- two position. With high customer satisfaction, that should also allow for continued low churn and high customer retention on the platform. The employee side, we also talked quite a bit about really proud of our passionate and talented staff. We want to see a continued upward trend on the employee satisfaction, and also that we have a strong and attractive employee brand so we can also attract and retain top talent.
I think we see that really because like we discussed, we recruited 50 engineers last year, and it's really good people, and they come to Nordnet because they like what we're doing, but also like the platform and the technology and things we're using when we're developing our platform. Sustainable business, we also discussed quite a bit. Trust business, we need to earn their trust every day, has a lot to do about risk management, that we can manage all of our risk and not least the compliance risks, and that we are a trusted and liked brand. If you're a savings platform, trust is key, and we know it takes time to build trust. If you as a customer want to put most of your savings capital on a platform, you need to be able to trust that platform fully.
It's the profitable growth. Fantastic growth potential in the Nordics. We talked a lot about that, six percent market share of the addressable market. We also are extending the addressable market then with the Finnish endowment wrapper and also the Danish livrente product. I think it is, it's a great opportunity for us out there. Costs and operating leverage is continue to be a very important focus for us. We want to maintain the scalability and key part of this is then the cloud-based platform, but also that we continue with the automations that we're currently working with. How we get there, the capabilities we also discussed in more detail from the delight, fidelity channels, having the best app and web, one-stop shop, true differentiator for us as Nordnet, automate everything we can, data-informed personalization, we also discussed cloud-based platform.
I think we're really onto something great there. I mean, this is really going to enable both scalability and security for us. Best-in-class people and the operating model overall ensuring efficiency, and then predicated on a strong ESG agenda. That's part of our purpose to democratize savings and investment, but also all the focus we put on compliance and risk management. It also boils down to revised medium-term financial targets that we already updated you on with a new target of 15% per annum customer growth, around SEK 450,000 savings capital per customer, around 45 BPS in revenue margin and mid-single-digit percentage growth in costs.
little bit in inflation, but mainly that we add more tech resources to speed up the development and delivery on our roadmap. The dividend payout ratio remains 70% of the yearly net profits. That was, I think, 117 slides tried to summarize in three slides.
Okay.
With this, we open up for questions.
Yes. Now we close today with a general Q&A session. Please welcome up on the stage again, Rasmus and Lennart. You can ask about everything we spoke about today, and that is also what has happened in my inbox here. I have now given up officially on the ambition to try to cluster the questions together. I'll just take them as they come. You have to prepare for that, both you and you people in the audience. Okay, let's go then. Apologies if this already has been asked, but could you shed some light on how you can target a certain amount of savings capital per customer? What are the key drivers for you to maintain the SEK 450,000 in your new financial targets per customer? How will a bear market affect this target?
How can you mitigate the effects? What is your assumption of market performance when you talk about this SEK 450,000 per customer? Lars-Åke.
We have an assumption of 5% market growth underlying. The rest comes from net savings. As we know, we have had great net savings the last two years with around SEK 80 billion per year in 2020 and 2021. We don't guide specifically on what net savings we're going to have per year going forward, but of course, we see healthy net savings per customer also going forward. We have to remember those guidance we give is over a business period, so the market might be up more than 5% per year or down more than 5% per year. Over time, it will probably even out.
When it comes to bear market, I think we have a very diversified business model now between the revenue streams, lending, funds and brokerage, and also between the countries. We also know if you have lower activity for a period, like we saw in 2008 and also in the tech crash in the beginning of 2000s, we know that activity level, even when you have a big slump, comes back pretty quickly.
Okay, good. Thanks a lot. A question about product and mortgage, more specifically. You have been in the non-Swedish market now for many years. Why hasn't the mortgage offering been offered earlier outside Sweden? What is the reason for that? Is it IT, regulatory, or has it been simply a priority issue? Rasmus, can you take that one, please?
Sure. I've only been there three- odd years, but let me say, it's probably priority. I mean, we have an excess liquidity in all four of the Nordic currencies, of course. But it's about making sure that we have something that's scalable and that's shippable and that's attractive. Focus has been on Sweden, which has been the largest market to date. Now, like we told you about, we're moving this mortgage into Norway and then into Finland.
All right. Question about the inorganic growth. I direct that to Lars-Åke. Maybe it's a question for owners, but anyway. What is your view on yourself being the opportunity for inorganic growth? i.e., how would you look at a bid?
That's a fully owner question, so.
Yeah. No answer. Okay, a couple of questions from Nicolas at DNB. What stock market development have you assumed for your savings capital of SEK 450k? You answered that already.
Yeah.
What explains why you expect the savings capital per customer to decline from the January 2022 level? If you come with the last one question, Lars-Åke.
Yeah, I mean, I think it's a mix of a number of new customers coming on versus the savings capital you have for existing customers is that balance.
I think we're assuming also, in the modeling, a reversion to 2019– 2018 types net savings flow per customer. Of course, and also right now we've had sort of a valuation drop in the markets which affects that number. The model is robust enough to absorb any such movements, of course, as Lars-Åke said.
Yeah. On new trading venues, we had a couple of questions on that subject earlier today. Could you elaborate a bit more on the prospect for adding more trading venues to the platform? How many new equity markets are you targeting to open up for trading in 2022? And what is needed for you to decide to start offering physical crypto wallets? Is it a concern of a regulatory pushback?
Yeah.
that is holding you back, or what is the story about that?
Well, let me take them in order, right.
Yeah.
Starting with the trading venues, the one that we have committed to is LSE trading. Like I said earlier, we're hoping to launch at the tail end of Q1, or probably more likely in the beginning of Q2. I really want to lift up and celebrate, if you will, the strategic partnership we have with Citi and Citigroup Global Markets. Through our ETP platform, we're able to really right-click and enable any of the exchanges of which Citi is a member. And this is, you know, using the state-of-the-art trading platform that we built. However, it's always a question of both market data cost as well as demand, right? We need to weigh those things against each other.
We're starting with the LSE 'cause that's where we see the most telephone orders to our brokerage desk, and we know that there's significant demand there. Looking out into Europe, of course, Euronext is attractive, Euronext Paris, looking at some of the other bourses in Europe. As Quincy mentioned earlier, Asia will be fantastic, but just the time difference, night jobs, you know, transaction monitoring, it does cause some difficulties for us, but not insurmountable, but that's why we're focusing on Europe first. I don't want to commit to more exchanges or how many, but the ambition level is high.
Crypto.
Crypto. Everybody's favorite topic.
Exactly.
Let's talk some DeFi. No, I think Quincy's remarks were exactly on point, right? It's all about, as an open platform, giving that access to on-exchange traded crypto-backed assets. I think a physical wallet is a way off, and we put that on the slide as well. Yes, of course, regulation is part of it, but it's also, so far, despite, you know, the blockchain encrypting the transaction history. There's a lot of mixers and other things out there from an AML and KYC perspective, it's not ideal. Also there's a total lack of regulatory guidance in this area. We are talking both to exchanges, to Nasdaq, but also to our regulators.
I think we need more clarity and more guidance from in the regulation before we were able to take such a step.
Great. Thank you, Rasmus. Question about net interest income from Nicholas at DNB. Threefold question. Could you comment on what drivers you see impacting your net interest income in the near term? Number one, could you elaborate a bit on your interest rate sensitivity, which you have stated is around SEK 500 million for 1 percentage point interest rate change? How is that split across currencies? Is the asset breakdown per currency in the annual report a good indication according to which 40% comes from Sweden and 20% comes from Norway? What drivers affect interest income in the near term? And could you elaborate a bit on the rate sensitivity?
I can comment on the net interest income. Of course, it's the development of the treasury portfolio. You can talk about the interest rate sensitivity later. Of course, the development in our lending products, where we see a strong growth in margin lending, growing with the customer base especially, but partly also with the savings capital. And then it's the growth in mortgage both in Sweden, but especially then we're going to launch the mortgage in Norway first and then Finland. While personal loans or the unsecured loan portfolio, I think we're going to remain at around SEK 4 billion levels. We won't see any growth there. That was in short. Interest rate sensitivity
Interest sensitivity.
I would say it's split around the currencies that it is reported, except for maybe in Denmark, and that is because the funding from deposit, we do charge negative interest rates on deposit there. That will probably increase the funding costs and thereby not being that positive there as it will be in the other countries when interest rates do increase. We have to remember, it's not just the treasury portfolio. I think the treasury portfolio moves first. I think within the three months we have the full effect in the treasury. We have the lending portfolio as well that will move over time as well.
Absolutely.
That, of course, we need to look at what the other participants in the market are doing. We know, I mean, if underlying interest rates increase, the market rates for loans will also increase.
Yes. That is, as you say, the competition and the country market situation that we have to adopt at that time. Good. Thank you. I'll be satisfied with that. Nicholas, let's change the subject again to livrente product in Denmark. Why are you repeatedly referring to the SEK 1.3 trillion market size for livrente when you show SEK 1.9 trillion as of 2021? I don't know exactly what this refers to, Lars-Åke..
Yeah. I think it was from the analyst presentation in 2020.
Okay.
The new number is 1.9, and that's also the end of 2021 number. We've been digging more in detail into this market, it was slightly bigger than we thought from the beginning. The new number is SEK 1.9 trillion for 2021. We also show then the growth potential in that up to over SEK 2 trillion.
Great. Good that it was 1.9 and not the 1.3. That was correct. Question about customer behavior. Maybe you want to pick this up, Rasmus. Is there a typical level of how much savings capital people want to have on your platform before they start to consume more? Something about the size of the savings that people keep with us.
Yeah. Yes and no. I think it's very individual. Let me just correct the word. You saw the word consume. I think what really sets us apart from any consumer platform is that you're investing. The assets are always used. There's no utility in a stock or a fund or what have you. You can't drive around in it, you can't live in it, you can't eat it. You can invest and hope for future valuation increases and a stream of cash flows. No real difference. Of course, you with less money, you can make less investments. That's it. I think the distribution is very similar. Really it's up to us to, once they're on the platform, to increase the engagement, increase the share of wallet, increase that product penetration, and get a higher savings capital for the customer.
Thank you. Lars-Åke, about the top line, how much can you grow top line with an assumption of a number of new customers, with our assumption number of new customers? I'm thinking about the young customer base, new products, and the growing of savings capital. I guess the mix of all these factors, how much can we grow top line?
Yeah. We don't guide on top line, but of course, if you take our customer growth and savings capital growth and revenue margin, you get some kind of top-line effect. Of course, we see a great potential to grow the top line in the coming years, both from savings customer growth, savings capital growth, the net savings, product penetration, and also launching new products that we talked about now.
I think if you look at that chart in the pack, and you'll get the PDF afterwards, like we said, you have the age buckets and you have the wealth curve. If you wanted to try to model out how that would grow, that's a pretty good guide on future asset levels as the customer base gets older.
We of course have in the model, even if it would stop customer inflows totally now, we know that the customer takes on new, more products over time.
Yeah.
We're going to launch additional products, but we also have this fantastic effect in the savings market that the underlying savings capital is growing at roughly around 5% per year, give or take. Even with a full stop on customer growth, we still have a good growth in the business.
Thank you. About growth in the business, a pretty detailed question actually about consensus versus earnings. 50% growth in customers, 450k savings per customer, and 45 basis points in margin imply SEK 4 billion of revenues and SEK 2.75 billion in profits in 2023. Your consensus is SEK 2.2 billion in 2023. What is your view of earnings versus expectations, Lars-Åke?
Yeah, as you see, we don't guide on that. We guide on what the parameters we guided on today. Of course, everyone needs to make their own model.
Mm-hmm.
Consensus, that's the analyst view. We also have to remember the guidance is over a business cycle as well. The midterm targets.
Good. A question about securities brokerage, and more specifically about ETP business. Avanza recently increased margin on their derivatives ETP business enabled by their growth and better terms from their partner. There was actually an article in Dagens Industri where you also were featured Lars-Åke. Does Nordnet already have the best terms for this product or is there an upside for you as well?
I actually can comment on that. I think our indications are that our deal is already better, and it's getting even better. No comments about our competitors' earnings levels, but we have a very good partnership with Nordea around our ETPs. We're happy with the earnings level, but we're always renegotiating, always looking to improve that partnership and that product's profitability.
Also worth mentioning here, this is not a product for everyone. We inform a lot about it. You have to take a knowledge test before using it, and we see it's around 2% of our customer base that use this product now, that's more advanced customers. I think it's a very good product for them, but for general customer, I think you really need to get informed and test yourself before going into that leverage product.
Of course. Agreed.
Good. More specifically on the profitability on a certain product, cross-border payments. How sustainable are cross-border payments or FX rates? Do you see any pressure on the 25 basis points you charge, or is that, in your view, a competitive offering today?
Yeah, I think if you look at other FX rates or spreads across platforms, but also in other areas where you buy in foreign currency, I think 25 bps is good. Also if you are a very customer that trades a lot in foreign currencies, you also can have a manual foreign currency account. You do the exchange yourself, and then you have a lower fee. If you trade a lot, we have a very competitive solution for that segment.
It's 7.5 basis points to Sweden, as an example. That's quite a bit lower than the 25.
Good. I think actually I'll bundle these two questions together. It's about the Swedish situation and the competition versus Avanza and the customer growth. It's from Jakob Hesslevik. The customer growth in Sweden is quite low today, at least compared to other markets. What do you think is the key reason, and what initiatives are you planning to increase the inflow and improve your first offering? On the same topic, how is the competition between Nordnet and Avanza developed in Sweden? Is the gap flat, and where are you stronger and weaker?
Yeah, I mean, if you look at the customer inflow in 2021 versus 2020, we increased the customer inflow with 35% in Sweden. We also took share that comes from the big banks to the platforms. We also increased our share there. As you saw in Sweden also, we are very strong in the high-end segment, investor segment and the trader segment. Our savings capital per customer is high, our income per customer is very high. We're very proud of the customer base we have, and that customer base is driving good revenue growth. We also said we want to expand more into the saver segment, so monthly savings and funds. What Gabrielle talked about, the entire focus and effort we do on funds, that's key to unlock that segment.
I'm really happy of the progress in the fund area so far, and it's a lot more to come in the coming years.
Good. About on the same note, what are your growth ambitions in terms of market share by 2025? You said we have 6% market share today.
Yeah.
We can start with that question. How do you want to grow in market share in the Nordics?
We don't guide on market share, but we of course have an ambition to continue to grow market share. We published the market share growth in 2021 versus 2020 in the quarter four report, and we had healthy market share growth in all the markets. Of course, the ambition is that we'll of course continue.
Good. A specific question about private banking. It was you, Rasmus, who talked about that. We'll see.
Mm-hmm.
Can you comment on the private banking offering in Norway and Finland specifically? How is that developing? If you can say something about how many clients we have on the offering versus competition.
I think only generally, I don't think we're not going to comment on the number of customers, PB-rated customers in those two markets. I think generally, our offer stands very well to the self-directed and maybe the more slightly younger, but otherwise tech-minted millionaires and billionaires who tend to choose us because they respect the tech platform and the UX. You know, they don't want a cinnamon bun and a cup of coffee under the chandeliers around the big banks. They want to do this themselves. They want it to be digital, and they want it to be preferential, which it is. I think it sounds very good. We have many more things in the pipeline for our PB business in all four markets, which is the benefit, of course, of being Nordic.
Nothing specific for those two markets, except, of course, the PB mortgage, which we talked about already, to be launched in both Norway and Finland.
Yeah. Also in Finland, not to forget, is the endowment wrapper, which is also very much towards the PB segment. That's a key component there.
Yeah. Correct.
Good. Over to the fund area. Two questions about that. Does having your own fund company change anything in incentives for you, which funds to push and having this independent versus the advisor role? And secondly, in which markets have you implemented fund-of-funds, and what does the roadmap look like for implementing your own fund-of-funds? I copied this question.
Wow. A lot to unpack in that question.
We have time.
No, I think what having our own fund company is all about is flexibility. It's about being able to control a larger chunk of the value chain, but also bringing great exciting product to our customers. We can clearly see our customers love Nordnet-branded funds. It's been a lot of index funds lately, but we have a lot of exciting other funds in the pipeline, including, like Gabrielle said, fund-of-funds and solution products. We don't think that that's going to impact the way we market funds on our platform. We're very proud of our fund supermarket with over 2,000 user funds on the platform. We are open architecture. We are not interested in providing advice, we're interested in providing guidance.
It's all about flow. It's about helping customers get into the products that are right for them, and whether they be Nordnet products or other products, that's up to the end customer.
Good. Thank you, Rasmus. Switch subject again. Tax rates, that's a topic. Best guess for tax rate going forward. Lennart, something about the tax rate. I don't, you don't want to give any predictions, of course, but something.
I would say no major changes in the tax regimes in the Nordnet countries. I would say it will be quite stable at this level.
Okay. Why are you so negative on the consumer finance? You have no shortage of CET1 capital as leverage is the constraint and margins are very high. Consumer finance, why so negative there? Who wants to pick that up? Rasmus, maybe.
I will say we're not negative on it, but it's not a portfolio we want to grow. Like both Jacob and Lars have said, we want to change the mix in that portfolio, and we've actually moved that mix already during 2021. We see there's actually a real sort of job for this loan to do to our own customers, and that's where it gets really interesting. It was actually maybe counterintuitively very interesting to our PB customer segment, as they're often fully invested sometimes in unlisted assets and need quick money, which we can provide. The other interesting aspect is actually how it's one of several exclusive IPO mandates because we can provide that unsecured funding to employees so they can participate in both the IPO itself, but also in new warrant programs, for example.
There is a myriad of other use cases which actually fits well on the platform.
It's mainly, I mean, we converted. We don't want to have a generic unsecured loans to the broader majority. Now we just focus it entirely on our customer base. That's key. Of course, there's a certain amount of demand in our customer base. That's why I think it's going to be rather flat.
I don't know who asked that question, but if maybe it's right back at you in terms of negativity, we get a lot of feedback from our analysts that they don't like this as well. I think we can take a long, hard think about that.
Good. Okay. From lending to trading, actually. Rasmus, you were talking about the different channels and the MAU and the DAU and these abbreviations.
You gotta love the DAU and the MAU.
Here's a specific question for you. Do customers trade the same ticket size in the app as over the web, or is there a difference in trading pattern?
There is a distinct difference in the trading pattern. So far, much heavier use of the app, but fewer trades being put through, and the trades that are put through are of smaller ticket size. I think all the numbers that I gave on those channel slides, which will be available again after the show, will give you the numbers to work the math out and to get those average ticket sizes. Of course, it stands to reason. Sometimes even our more advanced customer segments, they will put in trades on the web and then they will monitor and they will adjust in the app. But it's rapidly changing. Like I said, the new cohorts are onboarding and engaging almost fully through the app.
Good. About the competition and the type of new competition like Freetrade, new neo brokers like Freetrade, they say that they have cheaper trade execution than both Nordnet and Avanza. Is this true? And if so, what is the difference? They mention being directly integrated to the exchanges. Aren't you directly integrated to the exchanges?
Two ways to answer that. One is we are direct members of the Nordic Exchanges, and then everything outside the Nordics, we have that Citigroup Global Markets partnership I mentioned, which is actually a huge benefit to us and able to all the markets we can tap into and Citi-
It's also very scalable.
Yeah.
The more volume, the less we pay, basically, per ticket.
That's true both for Citi and for the primary exchanges of which we're a member, because, you know, with higher volumes, we can demand better prices. Of course, Freetrade, we've been watching them in the U.K. We welcome the competition. They have a different pricing model, and, you know, that's up to them and for their customers to see whether they like that. It is free in domestic trading, and then you pay a monthly fee, and I think everything on top of that is quite expensive. So it's much of a muchness, really. I guess they still haven't received word on their license. Once that comes through, we'll see how that goes. We're not afraid of competition, like Lars said.
Again, I think this one-stop-shop part is key. It's a key differentiator for us that we have the width and the breadth of products on the platform with, of course, a great experience on top of that.
As well as the tax-efficient wrappers, both on the bank side and on the pension side, that'll help customers invest effectively from a tax perspective. Then it all comes back to brand. Are you willing to part with your life savings and put them onto a platform you know very little about? That's why trust is so important to us.
A couple of questions left, actually, more on the big picture to close this section. You partly answered this, Lars-Åke, but this is phrased in a different way. Do you think Nordnet should be able to, outside Sweden, be the same market size as Avanza plus Nordnet in Sweden? Is that, like, a realistic scenario for you? Nordnet outsizes USA-
You mean that we can grow. Yeah, but I think Sweden is the most mature and most penetrated when it comes to digital platforms. It's around 20% of the population that's on the digital platform today. It's less than half of that in the other countries. I don't see why the other countries wouldn't mature in the same way. That is also an opportunity for us, of course, since Sweden is most mature today, and we have a great opportunity outside of Sweden.
Good. Here comes a classic question. How are you thinking about going to another country? If not as Nordnet, so maybe white- labeling some other platform?
Yeah, I mean, it's about focus for us. We have 6% market share. We have such a fantastic opportunity here, working on this one-stop shop in all countries, so we want to leverage on that at least to midterm. We also know from experience it takes a lot of effort to open up a new country. It took us more than 10 years to reach scalability and this trust and likeable brand outside of Sweden. It takes. It's a big investment to open a new country.
Yeah.
I think what's really cool with that investment and the time we've had in those markets is that Nordnet is seen as a Norwegian brand in Norway, as a Danish brand in Denmark, and as a Finnish brand in Finland, and that's a position that takes time, it takes persistence, it takes consistency, and it takes quality in the offering that you have. You know, we've seen some other players go broad into lots of countries, but very shallow in terms of product offering and none of the local adaptations in terms of tax accounts, and that's not, to us, an attractive business model. You can't just put your website through Google Translate and hope for the best. No, we're focused on the four Nordic countries, like Lars said.
It's 2:00, one last question. I think we answered all of them, actually. It's about the incumbent banks competition. Are you seeing increased investment from incumbents in digital products? How worried are you that they might increase their focus and investment level as you are becoming an increasingly meaningful disruptor? That's your question, Rasmus.
Well, you know, without sounding facetious or more facetious than usual, I think we've seen some moves by the big banks. First there was a couple that dropped their prices below ours. Nothing happened, meaningfully proving our case that it's all about the user experience and the breadth of the products on the platform. Secondly, I know some have made some investments in their app or belatedly added stock trading to their app 15 years after the fact. We've seen no impact of that. Having worked at a big bank, I can say, you know, they're good at a lot of things, but we are very, very good at one thing.
They need to split their resources, their management time, their focus between all these segments and all these products and all these markets and, you know, one month it may be, you know, cash management for export companies in Singapore, and then they're supposed to focus on, you know, retail savings and investments in Sweden or one of the Nordic countries, and that's a tough break for them to do. Even so, even if they were able to put that focus on or pour money on it, they are running tech stacks from the seventies in the basement. We're talking mainframe systems. We're talking a lot of middleware. We're talking a lot of adaptation and nowhere near the shipping velocity and time to market that Elias described earlier.
We can ship the entire platform up to 18x a day during trading hours, and we can roll forward, roll back, A/B test, canary test, ABCD test, roll back, whatever we want to do, and that's not a capability they have. Speed is really our competitive advantage here. We push a new version of the app every 4.5 days on average. I challenge anybody out there to find an incumbent bank that does that.
Thanks a lot, Rasmus. That's it, I think, for today. Thank you all who presented today. Thank you all who joined us. I hope you really enjoy our first Capital Markets Day. If you come up with any more questions, just send us an email or give us a call. We're here to answer them of course. The presentation you have seen today will be uploaded to our corporate site nordnetab.com this afternoon. Thanks again for today, and bye-bye.
Thank you.