Lukas Rosenstock

Lukas Rosenstock

I received an email from Holvi, who provide me with my business bank account. It was a notification that my account number will change. Now, that by itself would be merely annoying, since I soon have to edit this number in various places. However, the nature of that account number change and the reason they gave goes a little deeper, so let me share the background and my thoughts about it.

My business is based in Germany, and Holvi is a fintech company based in Finland (so a fintech in a double sense …). Therefore, my account number was an IBAN starting with FI, the country code for Finland, instead of DE, the country code for Germany. I never had any problems with this. On the contrary, I quite liked having the Finnish IBAN because I felt it was a statement for Europe and the Digital Single Market.

I’m a firm believer in the idea of the European Union, and I’m sure that to foster European innovation, we have to take a European perspective instead of a national one if we want to play a role in a world of superpowers like the US and China. The regulation does not yet make this easy, but I feel we’re getting there.

The Single Euro Payments Area (SEPA) makes it mandatory for banks and companies to offer cross-border financial transactions within SEPA countries under the same terms as domestic transactions. Moreover, Article 9(2) of the regulation bans so-called IBAN discrimination explicitly, which means companies must not require customers to have a bank account in their home country or any other specific place.

As Holvi explains in the FAQ about the change: “Even though the FI-IBAN should work anywhere within the EU, many of our German customers have experienced IBAN discrimination due to the FI prefix.” In other words, this change is giving up and caving in. Now, I don’t want to blame Holvi; this pragmatic decision probably makes sense for them and the affected customers. It would have been nice if this was an opt-in change, though, as I was not affected.

But anyway it’s a negative sign for fintech startups all over Europe because it shows that it’s challenging to offer a product in other countries as there are still companies who practice IBAN discrimination which is, I repeat, an illegal practice. It means that it’s startups and innovators who have to adapt to an “old economy”.

Still, I hope that this is a problem that will be solved over time and Europe will grow closer together (not only) in the financial market. Until then, I will weep a little over my beloved FI IBAN and change it to the DE IBAN.