In addition to banking, Holvi, a new type of banking service, is bringing clarity to politics. The Finnish service allows organizations to have their own account for storing, payment, and receiving of money, but also provides the option to make their books public. For political organizations and charities – which rely on public trust – this can inspire confidence that money is being managed correctly.
In Finland the local government election cycle is in full swing at the moment, and currently around 30 candidates are using the service to track and execute income and expenditures. Of them, only a few have made their books public, but it’s a sign of a new trend. There’s a growing open government movement in Finland, which includes avoinministeriö.fi among other websites where the public can vote on issues they would like the national government to consider. If 50,000 signatures are collected, the issue must be brought up in Parliament for consideration.
Kristoffer Lawson, the cofounder of Holvi, hopes the implications of public bookkeeping with have a large impact on politics in Finland, and eventually in the rest of the world. Open books allow voters to know what sources they are receiving their funding from and see how they are running their campaings. By doing so, voters connect to their politicians and get insight to how they would lead. An example of a candidate’s books can be found here.
Holvi is designed to be a complete replacement of an organization’s bank account, although it is not to be confused with a bank. Holvi is regulated by the Financial Supervisory Authority (FIN FSA) but is not a credit institution like your average bank. This turns the target market around. To a bank, the ideal customer is someone with a lot of money looking for a place to put it, or someone looking for a loan. Small businesses and organizations who need an account for simple transactions – not saving or borrowing – don’t provide value to banking institutions, so banks make their money off of a complicated and confusing fee structure.
“If you try to find charges on bank website, they won’t tell you – which is rubbish,” says Lawson. “These small businesses are awful customers for banks. But for us, they’re exactly the customers we love.”
Holvi believes organizations will see value in simplicity and straightforward fees. They don’t have any setup charges or hidden fees, but monetize through a €0.90 fee for each transaction. They charge more for credit card transactions, because Lawson explains they carry more risk.
For those of you outside Finland, Holvi is looking to expand internationally in the first half of next year. They encourage people to sign up for their waiting list so they can see where the demand is, and what countries they should focus on first.