UK-based LHV Bank has upgraded its SME Lending division, transitioning to the cloud-based banking system of SaaS partner Tuum . Through this, the bank consolidates its architecture, improves resource allocations, and implements a robust futureproof framework, without legacy system issues.

The integration with Tuum allows the bank to develop a range of new products for its SME Lending business while conforming to the changing market demands. LHV Bank’s lending system provides UK SMEs with commercial property and trading loans up to GBP 5 million. As the lending team is predominantly based in Manchester, LHV’s regional focus represents an important element of its lending strategy, increasing economic growth in underserved business hubs.

Also, it ensures that directors have a better understanding of the needs of local borrowers. Through its modular platform, Tuum supports multiple business lines from a single system across Europe and the Middle East. As per officials’ statements, LVH Bank took a buy-over-build approach for its lending architecture and, together with Tuum’s technology, it can avoid potential legacy issues and incorporate external insight into its system development.

UK’s SME Lending space According to Statista, there were approximately 5.5 million small and medium-sized enterprises (SMEs) operating in the UK in 2022. The majority of SMEs are micro-sized enterprises, the number reaching approximately 5.25 million. The construction sector represents the foundation of the SME space, with 914,175 businesses, while the second highest number is in the professional, scientific, and technical activities sector, at 761,735 enterprises. Considering this, many businesses require outside funding in the form of a business loan, either to invest in expansion or to maintain daily operations.

The total value of business loans is projected to reach GBP 513 billion by the end of 2023, with approximately 53% of SMEs applying for a loan to help with working capital. Moreover, the bank lending of SMEs in 2022 reached GBP 65.1 billion, a rise of 12.8% from 2021 and the second highest on record after 2020. More information about LHV Bank LHV Bank’s objective is to deliver client-facing offerings using technology.

In recent months, the bank entered several partnerships, including one with Raisin UK to expand into the personal savings market. The collaboration follows the bank’s plan to launch its direct-to-customer savings offerings, set to go live in 2024. Moreover, the financial institution aims to offer rates that challenge the market and to use its technologies to deliver an improved digital savings experience. The bank also finalised the business transfer from its Estonian affiliate, AS LHV Bank’s UK branch, to its licenced entity in August 2023.

The transition affects LHV Bank’s banking services clients in the UK and follows the granting of its banking licence and approval from the UK High Court to transfer the business. Back in June 2023, LHV Bank partnered with Montonio, an ecommerce checkout provider, to expand the latter’s merchant services with API-driven infrastructure. By using the bank’s services, Montonio can offer a more efficient refund process, the creation of merchant accounts in the names of respective merchants, as well as increased effectiveness in instant EUR payments. .