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When discussing the origins of digital banking, many might assume that the United States, Germany, or even France as the frontrunners. These nations, all giants in technological innovation, seem like natural contenders for the title. However, there's a third, perhaps surprising candidate: Finland, a small Nordic nation that has quietly been at the forefront of digital corporate banking, payments, and cash management.
I had the good fortune to catch up with Jukka Sallinen, CEO of Nomentia, to discuss the topic of 'why every company in Finland has a payment hub' and what insights Nomentia’s long history in pan-European cash and treasury management can reveal about the industry's future when it comes to not just automation, centralization and integration, but risk management, resilience, and profitability.
During our conversation, Sallinen shared his perspective on how Finland’s unique conditions have fostered a culture of innovation in banking and cash management that businesses across the world could learn from.
Meet Jukka Sallinen, CEO of Nomentia
Jukka Sallinen has been at the helm of Nomentia since 2021, but his roots with the company go back much further. He joined the company in 2006, gradually moving up the ranks to become the Head of Cash Management Business before taking on the CEO role. His deep knowledge of the industry, combined with a passion for history, gives him a unique perspective on the evolution of digital banking and cash management.
"Finland has always been an optimal laboratory to experiment and try things out."
Sallinen explains: "Finland's small size and the challenges that come with it—like limited resources and somewhat peripheral location—have made us masters of efficiency. Necessity has driven us to innovate, particularly in the realm of corporate payment technology like payment hubs."
Understanding payment hubs: The backbone of modern cash management
At the heart of Finland’s digital banking success is the concept of the payment hub—a centralized platform for executing payments that offers unparalleled efficiency and control over cash and liquidity. But what exactly is a payment hub, and why is it so crucial for businesses?
A payment hub, or sometimes a payment factory, is generally understood as a system that integrates and automates the processing of corporate payments within a single platform. By centralizing these processes, payment hubs provide real-time visibility into cash flows, help reduce costs of payment processing, and reduce manual errors – in general, payment hubs aim to improve financial control.
While payment hubs are often seen as something that only benefits transnational enterprises with multi-country and multi-continent footprints, their ability to integrate and consolidate multiple payment channels and methods into one unified payment platform has made them an advantageous and widely adapted technology even for small and medium-sized enterprises, especially in the Nordics.
Zooming in on Finland and its recent history, the adaptation rate of digital banking solutions is simple enough to track through the early 1980s. At the time, the nation’s banking industry was heavily regulated, leading banks to compete on quality rather than interest rates. This resulted in numerous branches across Finland. The deregulation of the banking industry in the late 1980s led to a banking crisis in the early 1990s, putting many banks in financial distress. To cut costs, banks reduced their branch networks by half and encouraged customers to use ATMs and online banking.
This strategy was successful, and customers quickly adapted to these new banking methods. As these developments occurred at the same time as Electronic Data Interchange, or EDI, technology emerged as a critical tool for businesses to exchange business documents, like invoices, purchase orders, and payment instructions, it is easy to see how they laid the groundwork for the development of digital banking.
However, it must be noted that the market volatility and banking industry disruptions that led to the technological advances also led to the development of highly structured national standards for cash management, which weren't properly met before the emergence of the fairly recent global ISO 20022 standard helped address these shortcomings by providing a more uniform and higher-quality framework for cash management.
Sallinen points out that the adoption of such technologies was driven by the need for efficiency:
“In a small country like Finland, you simply cannot afford to waste resources. Automation was not just an option; it was a necessity.”
Northern necessities: Finland’s path to the front lines of cash management
As the banking crisis of the early 1990s forced Finnish banks to cut costs drastically and to push customers to use alternative banking, the disruption also meant that Finnish companies had to adapt quickly, managing their finances with fewer resources and less direct support from banks. To mitigate risks and secure external funding, companies realized they could no longer rely on just one bank.
They began engaging with multiple banks to diversify their financial sources and reduce dependency on any single institution. This multi-bank approach not only spread risk but also provided companies with more options for financing during uncertain times. The need for efficiency and risk management became increasingly crucial, leading to the wide adoption of centralized payment hubs and more automated cash management systems.
Openness to new technologies, driven by the need to do more with less has fostered a culture of efficiency and the need to innovate. This proactive adoption of digital tools and automation has allowed businesses to streamline operations, reduce costs, and manage resources more effectively. As market volatility increases the calls for scarcity, these companies are well-prepared to navigate the changing business landscape by leveraging technology to maximize output with minimal inputs.
Payment hubs: More than just automation
Payments are the lifeblood of any business and managing them efficiently is crucial for maintaining financial health. Implementing a digital payment hub provides businesses with a robust foundation for cash management, enabling them to be more agile, transparent, and accountable.
As Sallinen notes: “Payment hubs can do a lot more than just automate transactions. They centralize processes, making it easier for businesses to manage their cash flows in real time. This is especially important in today’s volatile economic environment, where resilience and flexibility are key.”
Understandably, cash management process needs and requirements can vary significantly between individual companies and industries, but in the end, they all converge at the same point.
By streamlining payment processes, companies can not only improve operational efficiency but also enhance their ability to respond to market changes quickly. This newly gained ability to adapt is pivotal for businesses looking to stay competitive.
Why every CFO needs a payment hub
Scarcity is not the only thing on the rise, though. High interest rates and inflation have earned their place at the top of the mind of every finance professional. While no one can say for certain what happens next, it for sure won’t lead to a less complex or less competitive business climate.
As growth takes precedence, as it often does in a hyper-competitive environment, it’s vital for CFOs to focus primarily on sales pipelines. However, Sallinen argues that efficiency—especially in payment control—is equally important.
“Efficiency is the key to survival in today’s market.”
“CFOs need to understand that managing cash flows efficiently can have a significant impact on profitability. A payment hub not only improves visibility but also enhances control, which is critical for maintaining financial health,” Sallinen asserts.
One of the often-overlooked benefits of payment hubs is their ability to integrate both accounts payable and accounts receivable processes. Too often, payment hubs have been seen only as tools for managing outgoing payments. However, Finnish companies have demonstrated the value of using these platforms for incoming payments as well.
“Automating accounts receivable is just as important as automating accounts payable,” Sallinen emphasizes.
“Manual processing of incoming payments is time-consuming and error prone. By integrating both processes, businesses can significantly improve their cash flow management.”
Payment process centralization drives efficient, secure, and strategic cash management toward greater profitability
The benefits of centralizing payment processes through a payment hub bear repeating. Firstly, a payment hub enhances efficiency by automating routine tasks, allowing finance teams to focus on more strategic, value-added activities. As automation handles routine tasks, more time can be spent on in-depth financial analysis, planning, and forecasting, but especially on exception handling. Automation also generates a wealth of data which can then be used to drive strategic initiatives. Secondly, in the increasingly digitalized landscape unifying payment processes through a payment hub improves security. Increasing visibility to payment processes with secure payment process rules and controls reduces the risk of fraud and ensures compliance with regulatory requirements.
“In a more volatile environment, efficiency is not just about saving money—it’s about survival,” says Sallinen. “Centralizing payment processes makes businesses more resilient and better equipped to handle challenges. It also provides a higher level of security, which is increasingly important in a world where cyber threats are on the rise.”
Lessons from the North: What every business can learn about cash management
Speed, security, resilience. The Finnish approach to cash management offers valuable lessons for businesses worldwide. One of the key takeaways is the importance of automation and efficiency. Finnish companies have long recognized that to remain competitive, they must make the most of their resources by automating as many processes as possible.
“Back-office operations aren’t growing, but the demands on them are,” Sallinen points out. “Finnish companies have shown that it’s possible to maintain high levels of performance without increasing headcount by focusing on efficiency and automation.”
Another lesson is the value of comprehensive digitalization. By integrating all aspects of cash management into a single platform, businesses can gain better visibility and control over their financial operations. This integration also supports more accurate forecasting and decision-making, which are crucial for navigating today’s complex business environment.
Nomentia’s role in providing best practices for global cash management
Nomentia is uniquely positioned to bring the best practices from Finland and other Nordic countries to a global audience. As a leader in cash management, banking, and payment software, the company has a deep understanding of what works in different markets.
“We’ve seen firsthand how different regions approach cash management,” Sallinen explains. “In many ways we've positioned ourselves to bring what works in Finland and other Nordic countries to markets like Central Europe, and vice versa. After all, the best results are forged by balancing control and compliance requirements with process improvements to combine practices that work best in each situation."
Nomentia’s approach emphasizes agility and accountability, helping businesses implement solutions that are both efficient and secure. By leveraging the lessons learned from Finnish companies, Nomentia is able to offer its global clients solutions that are suited to their specific needs and challenges.
The new normal: Future challenges and opportunities in cash management
As businesses continue to navigate an increasingly digital world, the challenges and opportunities in cash management are evolving too. The "new normal"—characterized by heightened geopolitical risks, regulatory pressures, and technological advancements—requires a fresh approach to managing cash flows.
“Complexity is increasing, and so are the demands on cash management systems,” says Sallinen. “The number of payment methods is growing, and businesses need to keep up. Now is the time to build a resilient foundation for whatever the future holds.”
Sallinen also highlights the importance of data-driven decision-making in this new environment. “Accuracy in forecasting and visibility into both threats and opportunities are more important than ever. Businesses need to be able to react quickly and confidently, and that requires timely and reliable data.”
Security is another critical concern, particularly as the digital landscape becomes more complex. “With more payment methods and increased digitalization comes a higher risk of cyber threats. Ensuring process uniformity and compliance with current and future regulations is essential for maintaining security,” Sallinen adds.
The future of cash management efficiency: a payment hub
As we look to the future, one thing is clear: the role of payment hubs in cash management will only continue to grow. By centralizing and automating both outgoing and incoming payments, businesses can improve efficiency, enhance security, and increase profitability.
The Finnish approach to cash management, with its emphasis on automation, efficiency, and comprehensive digitalization, offers valuable lessons for companies worldwide. While the role of cash management increases, the back-office isn’t growing. The message is clear: Everyone must make do with less. And with partners like Nomentia, businesses can leverage these best practices to build a resilient foundation for the challenges and opportunities that lie ahead.
In the end, whether Finland can claim the title of the birthplace of digital banking and cash management is less important than the lessons that each pioneering country and company can offer to each other. As Sallinen notes, “It’s not about who did it first; it’s about how it’s done best. And it’s Nomentia’s job to bring all best practices together.”
Cash management success with Nomentia
KONE chose Nomentia's payment hub solution to centralize and secure its global cash and bank activities across multiple Shared Service Centers. The solution, integrated with KONE’s core ERP system and SWIFT Alliance Lite 2 and provided the global reach and harmonization KONE needed for consistent and secure payment processing. The project was successfully rolled out step by step, with the flexibility and cooperation from Nomentia being key factors in meeting KONE's specific requirements and ensuring smooth implementation.
Caverion chose Nomentia as part of a best-of-breed technology stack to enhance cash visibility and liquidity management across its operations. The decision was influenced by the need for a specialized solution that provided clear insights into cash positions. With Nomentia strong focus on liquidity management and existing integrations with Caverion's systems, the company could seamlessly transition and leverage comprehensive cash forecasting and data visualization across its operating countries.
Valmet chose Nomentia's payment hub solution to streamline and modernize its global payment processes.The decision was driven by the need for a consistent, secure, and centralized payment system that integrates with SWIFT Alliance Lite 2 for global bank connectivity. This payment hub solution implementation significantly improved the efficiency and automation of Valmet's payment processes, bringing it into the digital era and improving cash flow management across the company.
Posti chose Nomentia Payments to centralize and streamline its payment transactions across multiple countries, addressing the inefficiencies and issues of their previous system. The decision was driven by the need for a flexible, efficient solution that could handle the complexity of Posti's financial processes. Nomentia’s payment hub solution provided a user-friendly, reliable platform that improved control, harmonized bank connections, and ensured smooth processing of over 15,000 daily transactions.
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