Financial news

LHV Bank, the UK’s newest licensed bank, has finalised the business transfer from the UK branch of its Estonian affiliate, AS LHV Pank, to its newly licensed entity.

Following the transition, LHV Bank will handle all the GBP payments for its banking services customers in the UK; while LHV Pank will continue processing EUR payments without changes.

As a result, all GBP payment services associated with the banking services business have been moved from the previous branch to the new bank. This transition also included the transfer of associated GBP payment scheme memberships and related contracts.

This transition, affecting clients of the LHV Bank banking services, follows LHV Bank receiving its banking licence this May and the subsequent approval from the UK High Court to transfer the business.

At the same time, LHV Bank implemented a new cloud-based core banking system and successfully migrated the customer data from the Estonian core banking system to the new LHV Bank system in the UK. This modern infrastructure simplifies GBP payment systems integration for UK clients, improves reliability, and allows for better scalability of their operations.

Erki Kilu, CEO of LHV Bank, said: “The preparation for this business transfer has spanned over a year and a half. The whole project has been sizable, both legally and technically.

“During this period, we have built a completely new banking software, culminating in what is arguably the most state-of-the-art banking system, giving us a technological advantage for the foreseeable future. Today, our clients, along with their data, have successfully transitioned to this new system.

“When building this system, we chose to collaborate more extensively with external value-adding service providers, transitioning all systems to cloud solutions and enhancing in-house agile software processes. We partnered with Tuum for the core banking system, Salv for payment monitoring and Salesforce for customer management. During this time, we have also built a considerable engineering team in the UK.”

LHV Bank continues UK progression

LHV Bank is a licensed bank and is under the supervision of the UK financial regulators. Alongside its new banking system, the bank is preparing to implement a new loan system and plans to begin attracting deposits soon.

May 2023 saw LHV Bank become an authorised credit institution by the Prudential Regulation Authority (PRA) and receive its UK banking license.

This milestone enabled LHV Bank to accept customer deposits and transition away from operating under the temporary permissions regime as a branch of Estonian retail bank AS LHV Pank to being a fully authorised and regulated bank by both the PRA and the Financial Conduct Authority.