The world's largest private banking and asset management firm controlled by the royal family, LGT, has collaborated with Finastra, a worldwide provider of financial software applications and marketplaces, to offer the bank a solution that would expedite compliance with the EU rapid payments law.

LGT plans to provide quick payment services in Austria and Liechtenstein, with plans to expand into additional areas by utilizing Finastra's payment hub.

LGT: Making use of Finastra to fulfill the deadline for EU quick payments regulations

LGT intends to use a model bank implementation strategy to onboard Finastra's payment hub. The top asset management and private banking firm will be able to expedite its preparation to comply with the EU's rapid payments regulation schedule in this way.

The EU passed a new legislation in February of this year that would allow companies and customers in all EU and EEA nations to make fast payments in euros.

The EU instant payment legislation, slated for implementation on January 9, 2025, aims to lessen what the bloc refers to as "excessive reliance" on financial institutions and infrastructures in third countries while simultaneously enhancing the strategic autonomy of Europe's financial and economic sectors.

Before putting Finastra's future-proof solution into place, LGT will uncouple payments processing from its core banking systems to complete the integration.

By doing this, LGT claims it will be able to comply with new laws, handle the expected rise in immediate payment volumes, and maintain the necessary round-the-clock service availability.

According to Bernhard Strauch, Head of Securities & Payments Services at LGT Financial Services, "We must continue to evolve to meet our customers' business needs and regulatory requirements as payments become more sophisticated."

"We chose Finastra's payment hub because it allows for the smooth integration of additional services as needed and supports a variety of payment methods inside a single independent system.

"We will acquire the necessary agility to keep up with regulatory and industry demands with Finastra's solution and industry expertise."

Finastra: A payment processing system built for the future

One excellent illustration of how Finastra's payment hub can provide scalable and reliable payment processing is the company's collaboration with LGT.

Financial institutions can satisfy legal requirements, adapt to changes in the future more quickly, and provide customized services to their clients thanks to it.

After the framework is put into place, LGT may quickly add other schemes, including Switzerland's SIC5 IP. The current Finastra software from LGT, which includes the bank treasury management system Finastra Kondor and the Finastra messaging platform Total Messaging, is also compatible with Finastra's payment processing capabilities.

"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," says Neil Macro, vice president and managing director of Finastra's EMEA mid-markets and payments.

"At Finastra, we've made it a top priority to make sure banks are equipped for the future with our advanced payment hubs, which include the ability to pay as you grow.

Our solutions, which are based on open architecture, APIs, and our partner ecosystem, allow institutions such as LGT to innovate quickly, improve risk management, and provide end customers with improved services.

For instance, the bank may easily add new features like real-time sanctions screening and Payee Verification to improve its quick payments service. We're excited to help LGT expand its payment offerings in the future.

Serving a really worldwide clientele, Finastra has teamed up with Jefferson Bank in Texas to improve the bank's rapid payments program.