BBVA acquires Finnish banking startup Holvi

https://info.bbva.com/en/news/general/bbva-acquires-finnish-banking-start-holvi/

by Sujan • 10 years ago

63 15 10 years ago

info.bbva.com

BBVA is expanding, first the acquisition of (Bank) Simple [0] and now Holvi.

One thing i'm not sure about: is this a sign that BBVA has a good digital strategy by acquiring these neo-banks. Or does this show that a stand-alone neo-bank is not a easy / realistic thing to accomplish (yet)? Most, if not all, neo-banks struggle to get real customers (e.g. regular users, outside the 'TechCrunch PR wave group') and are either acquired (BBVA doing well here) or becoming software vendors to banks, vs a challenger to banks (e.g. Moven (bank) [1]).

[0] http://dealbook.nytimes.com/2014/02/20/bbva-buys-banking-sta... [1] https://newsroom.accenture.com/industries/banking/accenture-...

Mahn• 10 years ago

Perhaps these acquisitions are not so much a bet on "neo-banks", but rather serve as an insurance to make sure they never grow large and pose a threat?

ganeumann2• 10 years ago

BBVA barely had a footprint in the US before the Simple acquisition so it wasn't insurance, it was one of the cheapest ways to enter the US market.

decentrality2• 10 years ago

I think BBVA might be trying to aquire their way out of digital oblivion. What I've seen of their customer interfaces are some of the worst I've experienced.

decentrality2• 10 years ago

Their (non-digital) services are awesome. Only digital oblivion being solved here... their institution itself seems superior to most I've experienced... except being digitally horrible

jackgavigan• 10 years ago

They also invested in Atom Bank (a new mobile-only bank in the UK): http://techcrunch.com/2015/11/24/uk-mobile-only-atom-bank-pi...

phillc73• 10 years ago

Pushing the big green NEXT button as many times as I could on the Atom Bank website[0] was one of the more satisfying things I've done this afternoon.

[0] https://www.atombank.co.uk/

tomblomfield• 10 years ago

Congratulations to the Holvi team. Johan, the CEO, is one of the nicest guys in the industry.

tersiag• 10 years ago

Congratulations to the Holvi team, great service

pasiaj• 10 years ago

Fintech has been heating up immensely in Europe. Innovation labs & internal startups within old school banks are scooping up tech talent around the continent, and trying to find innovation partners with any kind of fintech understanding: payments, distributed ledger, know-your-customer-tech, etc.

European ranking regulation is forcing banks to open up API's to 3rd parties during next couple of years. Not much is clear at this point as to what it will actually enable, but if there is ever going to be a opening for banking disruption in Europe it would be starting about now.

juandbarraza24• 10 years ago

Indeed the Payment Services Directive (PSD2) has pave the way for the realization of third party 'access to account' (XS2A). This will aceelerate the trend of digital transformation in banking even more! http://www.sepaforcorporates.com/single-euro-payments-area/5...

kpil• 10 years ago

I have worked with a couple of banks.

My impression is that the main issue is that the bankers really don't understand software development, which is a bit ironic since they are heavily dependent on huge it-departments and behemoth systems, and banks were forerunners of the digital age - decades ago.

(I am not talking about traders and algo-wizards here, but the guys making sure that your salary is paid and the mortgages are billed, and the ATMs are spitting out money...)

The development departments are typically competent but also a bit aged and COBOL centered, and while it's nothing wrong with that per se, it tends to makes some changes harder than they have to be because of technical and cultural issues.

As the (top) management do not understand software development, which is similar in some ways, but vastly different in many other fundamental ways from business administration and also all other engineering fields, they are doing it wrong and without the right sort of people in charge or in the teams, [skipping a bit about hordes of coordinators, "business architects", and "requirement specialists" (and some developers) that don't understand neither the business nor code here...] and the end-result is long projects, low throughput, and unpolished and amateurish services.

And yes - the systems are insanely complex and old, and they get insane amount of new regulations coming, and they keep adding complexity to keep up, as the systems are only cost centers and to replace something is insanely expensive. (Although typically only a fraction of the quarterly earnings for the relevant business units within the bank.)

Because of this, the development projects don't go that well, and the bankers are not at all impressed with the performance of their own it-departments.

So the banker are now looking at the fintechs, and their perceived development force, and all the buzz about digitalization and disruption- and they are afraid that this will undercut their margins, and while that is probably true given all of the above, they somehow fail to see that virtually all their own services are already digital - or built on top of a digital service with a thin administrative physical process on top.

There are actually probably no truly disruptive threats - (BitCoin and distributed ledgers are actually not that competitive to a trusted 3rd party solution, as everything already is digital ) but there are absolutely profit margins that are in danger, until now typically on products that already is low-margin - probably because the market already works there, the others products are too regulated for others to enter.

The major difference is that the fintechs are prepared to invest a lot of money for a small cut of the margins - possibly trying to grow into ubiquity - probably unrealistic, while the banks have historically focused on spending as little as they can get away with on "admin" while still enjoying high margins on a traditionally oligopolistic market.

BBVA acquires Finnish banking startup Holvi

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