Holvi is not a traditional bank. We operate as a payment institution authorised by the Financial Supervisory Authority (FIN-FSA) of Finland for operations across the EU under the Payment Service Directive.
Holvi is reshaping the banking landscape and financial services across Europe. Having acquired customers across the continent including Ireland, Spain, Belgium, Sweden, Denmark and UK, the Nordic fintech startup is now conquering Germany and Austria.
Holvi is designed to replace traditional banks with an underlying business model vastly different from existing financial institutions. The core of the service is a versatile current account stacked with diverse features targeted to small businesses. The company's strategy is built around efficient digital customer acquisition, engaging with communities and enhancing connectivity. The company is building an open platform that seamlessly integrates third party service providers. An example of such is the integration of Dropbox allowing customers to export the whole bookkeeping with receipts and reports directly to their cloud storage account.
Modern technology in the cloud
Latest technology, targeted customer segments and segregated accounts are Holvi’s core factors of differentiation. Holvi has an inhouse technology team that has built the banking and payments platform from the ground up. The company is not adding another layer to pre-existent infrastructure but applies current technological means to enable new user interface and lean experience.
The company has a strong technology task force with specialist talent in web and mobile engineering as well as core systems engineers that come from payments, telecommunications and air traffic control systems background. Payment execution, KYC (Know Your Customer Verification), AML (Anti Money Laundry Screening) and risk management are all handled without external service providers.
The service is operated in a private cloud environment hosted by Amazon Web Services (AWS), the same infrastructure that runs Amazon.com. Holvi is one of the first financial institutions with a regulatory approval to run its core banking and payments on AWS. Using a modern cloud infrastructure stack allows high flexibility, scalability and a very attractive cost structure.
“We aim for fast execution and zero debt on both our balance sheet and technology stack. We are a generation ahead in an environment where most competitors’ core systems are still using mainframes”, says Tuomas Toivonen, Holvi Co-Founder.
Different from traditional banks
Contrary to big retail banks Holvi is not addressing individual consumers but has designated its services mainly for self-employed, micro businesses and SMEs – a creative force of 40 million in Europe. The micro business segment is the fastest growing macro segment in Europe. The inbuilt tools, such as online shop and invoicing, cover the simplest use-cases effectively but the service offered for users is extendable through the open ecosystem the company is building.
83% of Holvi’s customers are within the Millennial segment - the most fought for customer group in the connected age. According to the European Forum of Independent Professionals (EFIP), the number of freelancers in European Union has increased by 45% from just under 6.2 million in 2004 to 8.9 million in 2013. This makes freelancers the fastest growing group in the EU labour market. Apart from the world’s economic crisis, Generation Y is highly driven by the desire to set out their own path. Holvi has designed a viral current account for a networked community offering multiple channels of sharing and referral. The connectivity of the segment is reflected in Holvi's customer acquisition process: 57.4 % of the new customers get into the service by personal reference.
“In short, we are building the bank account and epicenter for the modern economy. An ecosystem that connects all forms of payment methods, data, transactions and alternative financing. The most important unclaimed position of the banking space.”, states Johan Lorenzen, Holvi CEO.
As an authorised payment institution, the company is regulated by the same authorities as traditional banks. Holvi provides their payment services under the same code of conduct and consumer protection rules as other service providers, including banks. As a payment institution, the company operates as an asset manager and payment services provider. In its duty to manage its customers’ assets, Holvi holds the customer funds in segregated accounts for the benefit of its customers. No customer funds are held on Holvi’s balance sheet, and in no event would creditors of Holvi have a claim on the customer funds.
The company received its own independent payment service provider licence in the summer of 2014. Holvi offers an independent current account with its own international bank account numbers (IBAN) across the European Economic Area. Holvi has opened its virtual gates wide open to welcome Europe’s digital generation by providing them a banking service without any queues, branches or paperwork.
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Holvi Payment Services Ltd is regulated by the Financial Supervisory Authority of Finland as an Authorised Payment Institution. The current account issued by Holvi is a payment account and the funds held on the account are managed as segregated customer funds. Funds on the payment account are not covered by deposit insurance and the funds do not accrue interest.
Mastercard is a registered trademark of Mastercard International Incorporated. The Card is issued by Wirecard Card Solutions Ltd (“WDCS”) pursuant to licence by Mastercard International Inc. WDCS is authorised by the Financial Conduct Authority (UK) to conduct electronic money service activities under the Electronic Money Regulations 2011 (Ref: 900051).