Innovation in Banking: Holvi – helping the ‘Makers and Doers’ of the small business community

Holvi is the Finnish bank aiming to provide a banking service to the “Makers and Doers” of the small business community. It is offering small business tools and online payments on top of its current account.

The provision of banking services to Small and Medium Enterprises (SMEs) is concentrated among the largest four banks, with the Competition and Markets Authority concluding that there remain high barriers to smaller banks entering the market and expanding. SMEs find it difficult to understand and compare the cost of Business Current Accounts and levels of switching remain low.

Holvi in Finland is offering business banking services aimed at the “Makers and Doers”. Its standard payment account is a similar type of service to those offered by consumer brands Moven and Simple, helping businesses understand their income and expenditure. But Holvi also includes a number of integrated services targeted at small businesses. These include the ability to accept payments and establish an online store. It also allows businesses to submit invoices and keep track of their accounts. The accounts are also shareable, which allows them to have multiple users within the business or community group.

Small businesses which use Holvi include Lui, a clothing brand – one of their pilot customers in the UK – and even Hermanni Turkki – billed as the best street band in Finland.

With self-employment increasing by over 650,000 over the past six years, there will be more demand for high-quality SME banking services. Lack of access to finance is also a problem with three-quarters of microbusinesses that had applied for finance reported that difficulty “obtaining finance” was an obstacle to business growth. Loans to SMEs have dropped by around a quarter since the financial crisis as banks pulled back from the market.

Alongside high-quality payment accounts, new entrants will need to provide access to cost-effective finance and technology allowing firms to accept card payments through mobile phones and tablets such as that provided by izettle and payanywhere.