By Aisling Finn on Thursday 13 August 2020
Another European challenger bank bites the dust.
Yet another European challenger bank has left the UK market.
Finnish challenger Holvi announced in a blog post that it plans on officially exiting the UK market on 31 October 2020, a date that echoes the UK’s initial departure date from the EU.
In the blog post, Holvi admits that “the UK is a challenging market” but gives the reason for its departure as coronavirus-related disruption and “the UK’s uncertain regulatory landscape.”
“However, the speed with which market conditions are rewritten has changed. We are reacting to the new realities by strengthening our core business in Europe, investing in our product and leaving the UK market. "
The fintech’s Mastercard will cease to work come 15 October 2020 and all accounts will be closed two weeks later on 31 October 2020, customers have until then to remove their funds held in Holvi accounts.
In the blog post, the SME-focussed digital bank wrote: “To respond to these new circumstances, we’ve made the difficult choice to strengthen our core business in Europe and invest more time and money in product growth.”
“We’ve made this decision at an early stage of our expansion to help minimise the impact on our customers and partners. This means we’re leaving the UK before we’ve even had a chance to get off the ground.”
It could, therefore, be assumed that rather than the stock Brexit excuse, now coupled with coronavirus uncertainty, that Holvi’s reason for departing the UK, a mere six months after it first launched, is due to its lack of customers.
As well as only letting down a small group of customers, Holvi doesn’t have to lay off any staff—the fintech’s UK operations were run entirely remotely from Berlin and Helsinki.
The UK is a tough nut to crack, particularly when it comes to the already crowded digital banking space, so perhaps, like N26 before it, dwindling customer numbers also played a part in its choice to pull out.