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How Luminor bank achieved payment processing independence and consolidation

TietoEVRY’s Payment Hub delivered as a Cloud solution enabled a fully independent and consolidated payment processing solution for Luminor bank.

Petri Syvänne

Head of Global Sales, Payment Solutions

The challenge

Luminor bank needed to carveout a separate payment system following the merger of two major Nordic banks – DNB and Nordea – in the Baltic region.

The solution

Luminor bank worked with TietoEVRY to create a fully independent and consolidated payment processing solution with TietoEVRY’s Payment Hub delivered as a Cloud solution.

About the customer

Luminor bank was created in 2017 through the merger of Nordea’s and DNB’s operations in the Baltics. The €1 billion acquisition was completed on 30 September 2019. 

Luminor's website
A unified payment-solution covering all payment processing activity.

Single platform

A unified payment-solution covering all payment processing activity.

Cloud based solution provides efficiency and speed.

Reduced operational costs

Cloud based solution provides efficiency and speed.

Compliant with existing requirements and further compliance easily added.

Regulatory compliance

Compliant with existing requirements and further compliance easily added.

How Luminor bank achieved payment processing independence and consolidation

The merger

Luminor bank was created in 2017 through the merger of Nordea’s and DNB’s operations in the Baltics. On 13 September 2018, Luminor announced that a consortium led by private equity funds managed by Blackstone had acquired a 60% majority stake in the bank alongside the original owners Nordea and DNB.

The €1 billion acquisition was completed on 30 September 2019. The transaction represents the largest majority stake acquisition of a universal bank by private equity in the last decade globally, and one of the largest mergers and acquisitions transactions in Baltic history.

Working against the clock

Nordea and DNB previously operated separate banks in the Baltic states – Lithuania, Latvia and Estonia. Luminor was established when the two major Nordic banks decided to merge their operations in the region.

After the consolidation, Luminor’s payment processing was carried out across six different banking systems belonging to Nordea and DNB in Finland and Norway. The newly created bank needed to establish an independent payment flow to gain its independence and fulfil the terms of its acquisition agreement.

According to the agreement’s deadlines, there was little time to fulfil the carveouts. Luminor and TietoEVRY’s teams faced an uphill challenge to achieve nine go-lives within 12 months.

 

The challenging and urgent delivery deadlines could have been a real headache. Fortunately, we chose the right partner and together we kept focused and achieved outstanding results.

Jonas Vysniauskas

Senior Product Manager, Luminor Group

Path to full independence

Luminor and TietoEVRY worked together to organize the project deliveries and implementations in Programs. This way of working proved advantageous for managing and coordinating several projects and deliveries at the same time.

“The challenge was to deliver complex payment systems within tight deadlines while maintaining high-quality standards,” says Espen Christiansen, Program Manager at TietoEVRY. “Close collaboration and transparency between the highly-skilled teams at Luminor and TietoEVRY was the key to so many successful go-lives in such a short period of time.”

SEPA credit transfers were the first payment system carveout of the project. Next it was SWIFT and cross-border foundation, and finally cross-border payments via online channels. TietoEVRY’s Payment Hub consolidated all payment processing onto a single platform.

"We had six core systems in three Baltic countries plus multiple internal systems which meant we had to perform different system carveouts each time. Additionally, the payment volumes going through our systems are huge, so failure was not an option, " says Jonas Vysniauskas, Senior Product Manager, Luminor Group

Establishing an independent payment system was the first significant step for Luminor in its journey to further develop new services and deliver an improved customer experience.

The success of the project was down to the highly professional and collaborative team that worked towards a common goal and focused on keeping business processes going.

Jüri Viigand

Business Architect/Analyst

I want to thank our multinational team for the awesome dedication and focus, Luminor colleagues from Estonia, Lithuania, Latvia, and partners from Norway, Finland and India as well as colleagues from other countries. When people combine forces, and work together, we can achieve great things!

Jonas Vysniauskas

Senior Product Manager

Speedy delivery on Cloud

When time is short, it’s crucial to find a solution that can keep up with the pace and cloud delivery was the logical choice for Luminor. TietoEVRY delivered the first cloud environment solution in just a few weeks, ensuring the project could meet the agreement deadlines. In addition, a cloud solution gives Luminor even more flexibility to test new environments based on the needs of the bank.

This was a unique project for both TietoEVRY and Luminor. We had to perform many carveouts in a short time and deliver Payment Hub on cloud. We needed to be curious, solve any emerging issues on the go and learn at a rapid pace.

Jonas Vysniauskas

Senior Product Manager

Luminor continues to work on its digital transformation together with TietoEVRY. The focus is now on TARGET2 and instant payment projects. Luminor aims to be its customers’ preferred financial partner by making banking simpler and more accessible, and to support the development of the Baltic region through financing and other banking services.

 

The project has been Highly Commended in PayTech awards 2020 - Best Cloud Payments Solution category.

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