Finastra to Equip LGT with EU Payments Compliance Solution

Financial software application provider Finastra has been selected by LGT for its solution to fast-track compliance with the EU instant payments regulation

The global provider of financial software applications and marketplaces, Finastra, has partnered with LGT – the world's largest royal family-owned private banking and asset management group – to deliver the bank a solution to fast-track compliance with the EU instant payments regulation. 

By leveraging Finastra’s payment hub, LGT will implement instant payment services to be rolled out across Austria and Liechtenstein, with other markets set to follow.

LGT: Leveraging Finastra to meet EU instant payments regulatory timeline

LGT plans to onboard Finastra’s payment hub using a model bank implementation approach. In this way, the leading private banking and asset management group will be able to accelerate its readiness to meet the EU’s instant payments regulatory timeline.

The EU’s new regulation was adopted in February this year, to make instant payments fully available in the euro currency to both consumers and businesses, across all EU and EEA countries.

Set to be implemented by January 9, 2025, the EU instant payment regulation is designed to improve the strategic autonomy of Europe’s economic and financial sectors, reducing what the bloc calls ‘excessive reliance’ on third-country financial institutions and infrastructures.  

To complete the integration, LGT will uncouple payments processing from its core banking platforms before implementing Finastra’s future-proof solution. 

By doing so, LGT says it will meet incoming regulations and anticipated growth in instant payment volumes while providing required 24/7 service availability.

Bernhard Strauch, Head of Securities & Payments Services at LGT Financial Services, says: “Payments are becoming increasingly sophisticated, and we must continue to evolve to meet our customers’ business needs and regulatory requirements.

“We selected Finastra’s payment hub as it supports multiple payment types within one standalone system while enabling seamless integrations of new services as and when we need them. 

“With Finastra’s solution and industry expertise, we will gain the necessary agility required to keep pace with regulatory and industry demands.”

Finastra: A future-proof payment processing system

Finastra’s partnership with LGT offers a prime example of how its payment hub can deliver scalable and resilient payment processing.

It enables financial institutions to meet regulatory demands and helps them respond faster to future changes and deliver personalised services to their customers.

Once LGT implements the platform, it can easily adopt other schemes, such as SIC5 IP in Switzerland. Finastra’s payments processing capabilities are also compatible with LGT’s existing Finastra software, including Finastra’s Total Messaging platform and Finastra Kondor, a bank treasury management system.

Neil Macro, Vice President and Managing Director of EMEA mid-markets, Payments, at Finastra, adds: “Many institutions need to urgently assess whether their current payment processing environment can support the expected increase in volumes and the need to operate 24/7.

“This has been a huge priority for us at Finastra; ensuring that banks are fit for the future with our sophisticated payment hubs, including with the option to pay as you grow. 

“Underpinned by open architecture, APIs and our partner ecosystem, our solutions enable banks like LGT to innovate at speed, boost risk management and deliver enhanced services to end-users. 

“For example, the bank can seamlessly implement new functionality to strengthen its instant payments offering, such as Verification of Payee and real-time sanctions screening. We look forward to supporting LGT in further developing its payments services.”

Finastra provides its services on a truly global scale, recently partnering with Jefferson Bank in Texas to boost the bank's instant payments offering. 

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