Founded in Copenhagen in 2017 by Michael Hurup Andersen, kompasbank was initially established as a specialist lender focused on small and medium-sized enterprises (SMEs), a segment Andersen argues remains the primary engine of employment and economic growth but one that continues to be underserved by conventional banking models. After raising seed capital in 2018, the institution spent close to three years building its technology infrastructure and securing a full European Union banking licence in 2021 before commercially launching in early 2022. Since then, it has expanded beyond Denmark into Germany and Spain, broadening from SME credit into leasing, payments, transaction banking, foreign exchange and treasury-related services as it seeks to become more deeply embedded in the day-to-day financial and operating workflows of business customers.

The growth has been notable not merely among digital banks but across Europe’s broader growth-company landscape. kompasbank has been recognised among the fastest-growing companies in its peer group based on sustained multi-year revenue growth, making it one of very few regulated SME-focused banks to feature in such comparisons. Its 2025 annual report shows a business moving decisively beyond its early infrastructure investment phase towards operating scale, with total income rising 63% to DKK 286 million ($42 million), net interest income increasing 44% to DKK 233 million ($34 million), fee and commission income nearly tripling to DKK 41 million ($6 million), and net losses narrowing sharply from DKK 61 million ($9 million) to DKK 28 million ($4 million). Customer acquisition accelerated by 50% during the year, while the growing contribution from transaction-led fee income points to a business becoming less dependent on pure lending spreads as it pushes towards break-even.

“It started really with the notion that we wanted to extend a credit facility to small and midsized companies,” Andersen said. “The primary reason for growth and job creation is a healthy and investable SME sector.”

Andersen argued that despite the attention often directed towards large multinational corporations and technology platforms, most employment growth and business expansion still originates from smaller companies. Yet many SMEs continue to struggle with slow financing decisions, fragmented servicing structures and limited treasury support despite increasingly operating internationally.

The bank initially focused primarily on SME lending before expanding into leasing, payments, transaction banking and foreign exchange services. Andersen said the broader ambition increasingly became building a single operational and financial relationship around the customer rather than offering isolated banking products.

“We don’t consider ourselves just a bank,” he said. “We see ourselves actually as a financial operating platform where you can conduct all the things that you need as either a CEO or a CFO.”

The bank’s development has also been accompanied by rapid growth. Andersen pointed to a doubling of customer intake during the previous year and narrowing losses as earlier investment costs rolled off. The institution has also expanded fee-based revenue streams through foreign exchange and transaction banking activities after initially depending largely on lending income.

For Andersen, however, the larger issue is not simply building another digital bank. It is whether SME banking itself remains organised appropriately for how smaller businesses now operate.

SMEs are operating in a more fragmented world

A major theme throughout the discussion was how geopolitical fragmentation and supply chain volatility are changing operational conditions for SMEs.

Andersen argued that many businesses spent the last two decades operating during a relatively stable globalisation phase characterised by predictable trade relationships, comparatively low geopolitical friction and increasingly integrated supply chains.

“Over a period of 20 years, all they have seen is great relationships with China, great relationships with Russia, great relationships with the US, great relationships with the Middle East,” he said. “Everybody sort of got along in a globalisation phase.”

That environment, he argued, has changed materially.

“Now everybody seems to be fragmenting,” Andersen said. “You don’t know what you don’t know anymore.”

Many of kompasbank’s SME customers operate through supply chains stretching across China, Australia, the United States, South America and Europe while simultaneously managing foreign exchange exposures, commodity price fluctuations and uncertain shipping conditions.

Andersen argued that smaller companies often lack the treasury infrastructure and macroeconomic capabilities available to large corporates despite facing increasingly similar external risks. As a result, SMEs are becoming more focused on operational certainty and risk reduction rather than maximising short-term profitability.

“You may give up a little bit of profit,” Andersen said. “But you’re doing it to have much greater certainty in your business.”

That shift is changing expectations around banking relationships themselves. SMEs increasingly require support around treasury visibility, foreign exchange management, liquidity planning and operational risk rather than simply access to credit.

Building banking around operational finance

As kompasbank expanded beyond lending, the institution increasingly focused on integrating operational services around the banking relationship itself.

The bank’s Navigator platform combines lending, payments, foreign exchange and hedging capabilities alongside third-party accounting systems, payroll tools, expense management platforms and operational software. Andersen said the objective is to create a continuously connected operational and financial environment around SME customers.

Businesses increasingly expect financial workflows and operational workflows to function together rather than through disconnected systems. Andersen argued that banking relationships also remain structurally more durable than software relationships because of regulatory requirements, payments infrastructure and operational dependencies.

“The moat, the hook for us, is the fact that we do banking,” Andersen said.

That banking relationship increasingly becomes the foundation around which additional operational and treasury services are layered.

The bank’s long-term ambition extends beyond digitising traditional banking workflows. Andersen described a model where businesses interact continuously with operational insights and treasury visibility rather than relying on periodic reporting cycles.

“We actually want to create a virtual chief financial officer (CFO),” he said. “I don’t want you as a leader of a company to wait for the monthly reports.”

Instead, Andersen described systems capable of identifying supplier deterioration, payment delays, treasury exposures and liquidity risks as they emerge operationally rather than retrospectively through static reports.

“What I want is you to have an interactive experience with your bank every day,” he said.

The operating model also changes the bank’s economics. Expanding beyond lending into payments, foreign exchange, treasury and operational services creates additional fee-based revenue streams while simultaneously deepening customer engagement and operational visibility across the relationship.

Continuous visibility changes how SMEs are assessed

A central part of Andersen’s argument is that SMEs have historically been assessed through incomplete operational visibility.

“SMEs are priced and risk-assessed wrongly,” he said.

Traditional SME underwriting models often rely heavily on static financial reporting and delayed visibility into operational conditions. Andersen argued that continuous access to transaction flows, supplier behaviour and customer activity creates materially different risk visibility.

“If people had better insights and could react sooner, you would be able to mitigate those risks,” Andersen said.

Under kompasbank’s operating model, the bank continuously monitors operational activity across customer relationships. Andersen said this improves both customer servicing and credit visibility.

“Getting live access to data creates a better credit, creates a better experience,” he said. “It also acts as an early warning sign.”

The bank increasingly positions itself as helping SMEs manage treasury exposures and operational risks rather than simply providing financing facilities.

“What about your supply chain risk?” Andersen asked. “What about the currency risk involved here? Are you even managing it?”

Many SMEs, he argued, understand the importance of managing foreign exchange exposure, commodity volatility and supply chain dependencies but often lack the infrastructure or expertise to do so systematically.

Continuous operational engagement also changes the economics of underwriting itself. Earlier identification of liquidity pressure, supplier deterioration or treasury stress potentially allows intervention before problems escalate into larger credit events.

Financing speed increasingly affects operational resilience

Andersen repeatedly returned to financing speed as one of the most operationally important differentiators in SME banking.

He described industrial and manufacturing customers seeking financing for machinery purchases tied directly to production expansion and commercial contracts. Delays in financing approvals can materially extend operational timelines because manufacturing, shipping and installation cycles already stretch over several months.

One example involved SMEs ordering industrial equipment from Asia. Financing delays can prolong the entire production and delivery process while simultaneously exposing businesses to changing foreign exchange conditions, commodity prices and geopolitical developments.

“And if you are unlucky,” Andersen said, referring to disruptions such as the Suez Canal blockage, “all of a sudden your supply chain can stop for weeks.”

“The problem is if you have to wait for months to get your financing,” he said. “Your entire value chain gets extended by months and months and months.”

For SMEs operating with smaller liquidity buffers than large corporates, those delays can materially affect competitiveness, delivery schedules and revenue visibility.

Andersen argued that digitally native SME banks can differentiate themselves operationally by materially shortening financing response times.

“If you come to us, we can give you an answer really quickly,” he said.

Financing speed, in Andersen’s view, increasingly affects supply chain execution, treasury exposure and operational resilience directly rather than functioning simply as a customer experience issue.

SMEs still buy confidence, not just digital banking

Despite the emphasis on digital infrastructure, Andersen repeatedly stressed that SME banking remains deeply relationship driven.

He contrasted kompasbank’s positioning with retail-focused digital banking platforms such as Revolut⁠, which he described as highly effective within consumer banking and very small self-service business segments. However, he argued that SMEs operating with larger financing requirements still require reassurance and direct engagement around major financial decisions.

“For them, borrowing EUR 1 million to EUR 2 million ($1.18 million to $2.35 million) is a big deal,” Andersen said. “They still think having a human person is very helpful. It creates comfort.”

He argued that this changes how SME-focused digital banks compete commercially. Operational responsiveness, execution reliability and trust become more important than purely interface design or low-cost product distribution.

“What we sell is actually, in many ways, something that you can’t see or feel or taste,” Andersen said. “We sell trust. We sell confidence.”

Once those relationships are established, Andersen said customers become significantly less focused on marginal pricing differences than on reliability and responsiveness.

“They don’t necessarily see price as the only, or even the most important, factor in determining their business relationships; what truly matters to them is speed, certainty, and having a partner who understands their journey,” he said. “What they care about is the service that we provide and the speed at which we provide it.”

The relationship model also reinforces the economics of operational banking. As banks become more deeply embedded into treasury management, payments activity and operational workflows, switching relationships becomes operationally more disruptive for customers while simultaneously improving visibility and engagement for the bank.

Moving closer to the operational centre of businesses

The operating environment facing SMEs is becoming structurally more complex. Supply chain fragmentation, foreign exchange volatility, shipping disruption and geopolitical uncertainty increasingly affect smaller businesses that often lack sophisticated treasury infrastructure internally.

Under those conditions, SMEs increasingly require banking relationships capable of supporting treasury visibility, operational forecasting, financing execution and risk management simultaneously rather than through disconnected products and services.

For Andersen, the role of SME banks is therefore moving closer towards the operational centre of businesses themselves. Rather than functioning primarily as external financing providers, banks increasingly sit closer to payment flows, supplier relationships, treasury exposures and day-to-day operating decisions.

The shift also changes how digital SME banks build sustainable revenue models. Earlier generations of digital banks frequently prioritised customer acquisition and scale above profitability. kompasbank’s expansion into payments, foreign exchange, leasing and operational infrastructure reflects a broader move towards more diversified and operationally embedded revenue structures.

At the same time, the combination of operational visibility, treasury integration and continuous customer engagement potentially creates advantages in underwriting, retention and servicing simultaneously. The model increasingly aligns customer operating activity with the bank’s own ability to manage risk, generate fee income and deepen long-term relationships.

The direction of SME banking, Andersen argued, increasingly points towards continuous operational engagement between banks and businesses rather than periodic product interactions.

“The easier you allow us to make your day,” he said, “the more you can focus on the three things that really matter, the people, the products, the profits. In that order.”

Banks that can integrate themselves more deeply into the operational and treasury workflows of SMEs are likely to gain stronger visibility, stickier customer relationships and more diversified revenue streams than institutions that continue operating primarily as standalone lending providers.