Building a Chal lengerThe Holvi story – or building a payments

challenger to service small business customers

FIN-FSA Conference4.10.2016

Holvi – an onl ine business account

An online only current account for business owners

Business management tools and banking in one

Holvi Business MasterCard® and online acquiring

“Holvi gives me the freedom to do what I like for a living.”

Holvi background

Founded in 2011 with its HQ in Helsinki, 35 people team

A Payment Inst itut ion authorised and regulated by the FIN-FSA

Services offered onl ine only, cross border to target markets

Live for customers in Germany, Austria and Finland

A value added current account for business management

Since March 2016 part of the BBVA New Digital Businesses

Fintech in retail services

Financial services have always been technology early adopters.

Fintech from a background enabler to def ining customer experience.

Starting from a clearly def ined and l imited customer problem.

Enablers: PSD1, SEPA and digital distribution channels.

Retail f intech as new services offered directly to customers and

leveraging technology to reinvent business and delivery models.

Digit isat ion and digital isat ion

Digit isat ion (“digitointi”) is the conversion of assets into digital

information.

Digital isat ion (“digitalisaatio”) is the production, distribution and

consumption of digital goods using software and networks.

Financial services have long since been digitised, but digitalisation

especially in the consumer interface has been lagging other industries.

Models of digital isat ion in retail f intech

1. Marketplaces to more effectively connect supply and demand.

2. Consumer experiences that are natively digital.

3. Leveraging data to broaden access to services

4. Aggregat ion of services for ease of use.

Building a chal lenger

1. Find an underserved market segment

2. Leverage changes in technology

3. Be independently regulated

4. Differentiate from commodity services

5. Working others in the market

6.Cultivate a multidisciplinary team

Find an underserved market segment

It all starts with a customer segment that you know deeply and are

passionate about . Often a segment that is not profitably served by

incumbents with legacy cost st ructures.

The Holvi founders came with a background as entrepreneurs. We

knew our segment as underserved. Could we serve these customers

better? Could we build a bet ter banking service?

Leverage changes in technology

When Holvi started out, a number of technology t rends were maturing.

1. We built ful ly in the cloud with Amazon Web Services

2. We use open source software all the way

3. Our corporate infrastructure is ful ly outsourced

We have our own core banking stack from the ground up. We use onl ine only dist ribut ion, web and mobile. We market digital ly, but with a human touch – in customer support and community presence.

Be independent ly regulated

Europe is the ideal place to build financial technology startups.

The single market in f inancial services works.

We have clear and sensible regulat ions for payment services.

Equal access to payment infrastructures.

Being able to work as a peer f inancial inst itut ion, and subject to the same customer due dil igence and code of conduct obligations. We don’t believe in pure agency model.

Different iate from commodity services

As a regulated financial institution we ful ly own the customer relat ionship.

Our customers are our customers, and we issue and service the products we offer. We work with partners who are best at what they do – whether it is SEPA payment execution, issuing or acquiring.

Our expert ise and value is in packaging these components to compel l ing customer proposit ions. We build and manage the services supply chain.

Working w ith others in the market

Our core value is provided in the user experience. We have always worked with other f inancial inst itut ions in partnership.

For any challenger it is crucial to work successful ly w ith others.

How can incumbents offer building blocks for the upstarts to service customers in a variety of segments?

Incubators, internal development and acquisitions: al l needed!

Our experience with BBVA, digitalisation in the bank’s core.

Cult ivate a mult idiscipl inary team

Internat ional team, twelve nationalities, Engl ish from the get go.

Varied backgrounds in architecture, design, gaming, NGOs and entrepreneurship.

Half the team have run their own businesses. Finance with a meaning: services that the team can relate to and where the positive impact on customers’ lives is direct.

For everyone, the core financial services DNA is responsibil ity: we are custodians of our customers’ businesses and their money.

Culture: Makers and Doers

We’re based in the old Lapinlahti hospital with active community of Makers and Doers and Holvi customers. No shoes, and Senna.

Growing team in Helsinkiabout.holvi.com

“Holvi is making payments and safeguarding cash happen almost as an afterthought in the background”

T he E conomist