LHV UK Limited (‘LHV UK’), a payment infrastructure provider to financial intermediaries, has submitted its UK banking licence application to the regulators.
Erki Kilu, the CEO of LHV UK, said: “It took exactly a year to prepare the materials needed to apply for the banking licence. We have been in constant communication with the regulators and promptly addressed any recommendations and feedback. In addition to working on the application, we have also grown our team in London to 25 people, with new people joining every week. If we take into account the 55 people in LHV’s Tallinn office who are directly involved in supporting LHV’s UK business, it is already a fairly large company.
“LHV UK will invest £8.5million this year into people, technology and risk control systems. We will also open our second UK office in Leeds, where we plan to hire IT specialists and engineers. The complete separation of business activities also includes staffing and technology. LHV UK will use modern outsourced technology and cloud-native solutions like modular banking platform Tuum, payment processing platform Form3, anti-money laundering and compliance solution Salv, CRM system Salesforce, etc.“
LHV Group decided to establish a bank in the UK to clearly separate its business activities in Estonia and the UK. Today, LHV operates in the UK through LHV Bank’s UK branch. Separating the business activities will allow better compliance with regulatory and supervisory requirements. A clear separation between the two businesses will enable LHV UK to better highlight the financial results and the value proposition of the new bank for investors. LHV UK Limited, established in the United Kingdom is a 100 per cent subsidiary of LHV Group.
LHV Bank’s UK Branch has 200 financial intermediary customers, that in turn service over 10 million end-customers worldwide. Amongst others, the customers include Wise, Monese, Coinbase, Trustly, Paysafe, Airwallex, TransferGo, Blockchain and Currencycloud. The bank provides payment infrastructure to financial intermediaries, all of them characterised by advanced digital solutions, international reach and the pivotal role of payments in their services.
For financial intermediaries, LHV predominantly offers settlement services such as accounts, payments, card acquiring, FX and other similar services. As a direct member of both instant euro and pound payment settlement systems, LHV can offer customers real-time payments in both major currencies in Europe. The services are offered to the clients through a fast and functional Application Programming Interface LHV Connect.
The banking application of LHV UK Limited is subject to regulatory approval by the Prudential Regulatory Authority and Financial Conduct Authority. The application takes up to six months if the application is complete but could take up to 12 months if the application is not complete. After obtaining the banking licence, LHV plans to transfer its business from the LHV Bank UK branch to LHV UK Limited.