LHV Bank taps Tuum for SMB Lending

LHV Bank, a U.K.-licensed financial institution, has embarked on a transformative journey, ushering in a new era for its small and medium-sized business (SMB) lending division. In a strategic move to enhance its operational capabilities, the bank has forged a partnership with the cloud-native platform, Tuum, to embrace the advantages of a cloud-based banking system. This monumental shift signifies LHV Bank’s commitment to modernisation, as revealed in a LinkedIn post on Thursday.

The impetus behind this pivotal transition is the removal of the shackles imposed by legacy systems, enabling the bank to embark on a trajectory of innovation. By harnessing the power of cloud technology, LHV Bank aspires to expedite the launch of novel financial products, optimise its resource allocation, and streamline its architectural framework. This monumental move underscores the institution’s resolve to stay at the vanguard of financial services.

In its LinkedIn post, LHV Bank articulated its rationale for this collaboration, stating, “This collaboration aligns with our sentiment to use value-adding technology partners to deliver the best client-facing offering.” The focus is unequivocally on enhancing the customer experience, a testament to the bank’s unwavering commitment to delivering excellence.

The SMB Lending division of LHV Bank caters to the needs of small and medium-sized businesses in the United Kingdom. It specialises in extending commercial property and trading loans, with an upper limit of £5 million (approximately $6 million). Of particular note is the division’s dedication to supporting underserved business hubs, exemplified by its emphasis on regions such as Manchester, as reported by Fintech Finance News.

Tuum, a cloud-native platform with a far-reaching presence spanning Europe and the Middle East, offers a highly configurable and modular system capable of supporting various business lines within a unified framework. This strategic alignment between LHV Bank and Tuum was driven by the platform’s exceptional flexibility and comprehensive application programming interface (API) service offering. LHV Bank’s decision to embrace a ‘buy-over-build’ approach underscores its commitment to sidestep potential legacy challenges while assimilating valuable external insights into its system development process.

Erki Kilu, CEO of LHV Bank, remarked on this pivotal integration with Tuum, noting, “This integration with Tuum is a key step in our continuous effort to provide a framework that enables our SME Lending business to develop a wide range of new products quickly, allowing us to swiftly adapt to changing market demands.”

Tuum, founded in 2019 and headquartered in Estonia, is the brainchild of seasoned banking and FinTech executives. The company’s cloud-based core banking network empowers both financial and non-financial entities to introduce products and services that align seamlessly with customer needs, thereby enhancing sales and fostering customer loyalty.

In a recent collaboration, Tuum joined forces with Marqeta to assist European banks and FinTech firms in creating flexible card programs. This synergistic partnership leverages Tuum’s core banking solution and Marqeta’s digital payment expertise to offer a pre-integrated FinTech solution, expediting time to market for its customers and solidifying Tuum’s position as a transformative force in the financial technology landscape.