Finland: Challenger Digital Banks
Holvi, Revolut, and N26 offer digital challenger banking in Finland. The Finnish banking market is dominated by four large banks that have over 81% of the market.
HOLVI Holvi was founded in 2011 as a private company, and launched in Germany in 2016. They operate in Germany, Finland, and Austria. From 2017 to 2018 they saw year-on-year growth of 60 %. Holvi has raised 4.3 million Euros over six funding rounds. Their last round was in 2015.The majority, 85%, of their customers are freelancers. Holvi has over 150,000 micro businesses across Europe as customers. They describe themselves as "a simple one-stop-shop for small businesses to collect income, manage expense and get an understandable real-time view of their company finances. New Holvi accounts can be opened in minutes online and Holvi customers don’t need a separate bank account."Holvi was voted the "Hottest Startup in Helsinki". E-Residents may business bank with Holvi. Their website may be viewed here.
REVOLUTRevolut was founded in 2015 and is based in London. In 2017, they reported $15.67 million in revenue, and $17.31 in 2018. From 2016-2017, their revenue growth was 443%. They offer personal and business products. Revolut launched in Germany in 2017.Their market valuation is currently $1.7 billion, with $336.5 million in total funding over 12 rounds, with the last being March 27, 2019. They are a private company and considered a tech unicorn. Revolut has completed a total of 350 million transactions at a total value of $48.9 billion.Revolut states they have 7,000 new accounts opened daily. They have nearly 20,000 businesses as customers, along with 4.5 million customers total. In the UK, they have 1.6 million customers. Businesses may hold, receive, and exchange 29 currencies without charge. Revolut claims they are ten times cheaper than a bank. They have had significant reported losses. Their business customers have an Open API to integrate their Revolut account into their current workflow and stack. Revolut operates in Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and the United Kingdom. Their website may be viewed here.
N26N26 is a Berlin bank that operates in 20 countries in Europe. They have 2.5 million customers worldwide and were founded in 2013. They are a Late Stage Venture and have raised $682.2 million in funding over seven rounds. Their latest round was July 2019.N26 has a current market valuation of $3.5 billion. In 2017, they generated revenue of 11.24 million Euros which was a 2000% increase over 2016.In late 2018 they had two million customers. They currently have over 3.5 million. Their monthly transaction volume exceeds 1.5 billion Euros. N26 offers banking for freelancers and the self-employed. They operate in Germany, Austria, France, Italy, Spain, Portugal, Ireland, Greece, the Netherlands, Belgium, Luxembourg, Finland, Latvia, Estonia, Lithuania, Slovakia, and Slovenia.N26 is planning to expand to the US in 2019.Their website may be viewed here.
- The "Finnish banking market is dominated by four large groups, which together hold 81.0% of the market"
- "The biggest group is the OP Financial Group, with 35.5% market share. The group consist of 160 cooperative banks. The second largest group is Nordea with 26.4% market share. In January 2017, the Finnish subsidiary of Nordea merged into the Swedish parent bank and became a branch in Finland. By the end of 2018 Nordea will move its head office from Stockholm to Helsinki and will become the first globally significant institution (G-SIB) domiciled in Finland. Through Nordea’s decision, the Finnish banking sector will grow to over three times the size of its gross domestic product. However, the foreign ownership will drop significantly."
- "Contactless payments are increasing rapidly. Almost every Finn (97%) has a payment card (debit and/or credit) and 64% of cards include contactless payment facility. In 2015 the share was 22%."
To locate the top challenger digital banks, we first located industry articles that stated who the best digital challenger banks were. To be included in the next stage of our research, a bank had to be mentioned multiple times. Once we had our list, we then researched each bank separately to obtain an across the board metric. This proved difficult, as some banks did not list their annual revenue. We believe this happened because some banks are operating at a loss due to how new they are. Our next approach was to order them by their customer numbers. This again proved difficult, as the biggest bank we researched did not separate their customer base, and some banks only do business banking. Active users and monthly transactions also ran into the same issues. To combat this problem, we holistically looked at all the metrics we obtained to get our top listings.
To assess the market penetration, we began by locating industry reports and market studies. This did not give us enough information to triangulate a market share, as most of the information was global. Consulting business press releases from Globe Newswire, PR Newswire and from each business’ website gave us the bulk of our information. To finish our research, we researched available banking information from the government. Again, this gave us a few facts. Ultimately, we were able to put together a snapshot of the market, but not exact figures.