Holvi builds a digital bank with a difference in the cloud, using AWS to deliver services quicker and get regulatory approval. The Finland-based startup provides small businesses and freelancers with a business current account (also known as a checking account) and integrated tools for invoicing, collecting payments online, and managing expenses—all in one simple-to-use service. Holvi enables faster user experience with a secure infrastructure by using services such as Amazon Virtual Private Cloud, Elastic Load Balancing and Amazon CloudWatch.
Since the turn of the millennium, financial technology (fintech) companies have been challenging traditional banks with their agile structures, use of emerging technologies, and focus on the customer experience. Their flexibility has also allowed them to tailor their offerings to specific groups of users. For Finland-based Holvi, that market is entrepreneurs.
Holvi offers a business current account (also known as a checking account) to small businesses and freelancers―a market with an estimated 40 million potential customers―as well as integrated tools for invoicing, collecting payments online, and managing expenses—all in one simple-to-use service.
Holvi’s founders had worked together at several technology companies over the years. Tuomas Toivonen, one of the cofounders, is now in charge of developing the firm’s core banking platform.
“There were two important developments that prompted us to get Holvi off the ground in 2011,” he says. “One was a change in regulation, which allowed us to operate as a fully authorized payment institution across the European Economic Area (EEA). The other was the emergence of new technology. Growing mobile use among consumers and the maturity of the cloud gave us the opportunity to build the type of agile, customer-focused business we wanted.”
Based on previous experience, the founders didn’t want to own physical servers. “We knew building the back end of our bank in the cloud would be technically feasible,” says Toivonen, “but whether we’d get regulatory approval was a different matter.”
Between 2011 and 2014, Holvi worked with the Finnish Financial Supervisory Authority (FIN-FSA) and Amazon Web Services (AWS) to gain the necessary approvals to operate across the EEA. “One of the main reasons for choosing AWS was that we could use its Ireland region to keep data within the EEA,” says Toivonen.
Using AWS makes regulatory audits easier, as he explains. “Having been through countless audits, I can say with certainty that it’s a far smoother process with AWS. It offers a highly secure infrastructure so we don’t have to worry about things like fire and flood protection at a physical data center.”
Holvi has been able to get its product to market fast thanks to AWS, as Henri Laitinen, head of IT operations at Holvi, explains. “Just as we enable customers to focus on their core business by making banking simpler, AWS lets us concentrate on our core business by taking care of hosting,” he says. “AWS provides better infrastructure services than we could ever provision in-house.”
Holvi uses Amazon Virtual Private Cloud (Amazon VPC) to interface with a third-party payments processor. It set up a secure VPN link and uses Amazon VPCs to make sure its environment is isolated from its supplier. The company also uses Elastic Load Balancing to provide authentication gateways. “This means that when authentications come in from people using their bank cards in a store, we can respond within 200 milliseconds and ensure a fast experience for end users,” says Laitinen. “Using a traditional infrastructure to set these up would have at least doubled the response time.”
“Handing over the heavy lifting on our infrastructure to AWS means we can focus on things that make a difference to our customers, like developing new products,” Toivonen says. “Our Mastercard, which we launched in 2016, is enjoying 15–25 percent growth each month. The card works with the Holvi mobile app, giving our customers complete control over their business current account.
Instant notifications inform them when their card is being used, so they can always be on top of the situation.”
And that’s not the only success story. In 2016, Holvi was acquired by Spanish bank BBVA as part of its New Digital Businesses unit. “
“I think we were an attractive acquisition because we offer our products exclusively online, and we take advantage of European Union freedom to provide services across EU borders,” says Toivonen. “Plus, we have a modern stack underpinning the app in our own proprietary platform and in AWS.”