1. LHV Bank – Digital Banking in an Analog World October 2016

2. LHV Group
The largest and the fastest growing domestic financial group and capital provider in Estonia
the 5th largest bank in Estonia
the 2nd largest pension fund manager in Estonia
2,5 EURb clients financial assets

3. LHV Group
LHV (LHV1T) is public company listed on NASDAQ Baltic since May 2016.
5 330 shareholders
1000 subordinated bondholders
100% Estonian capital

4. LHV Bank
A new generation bank with strong focus on innovative payment solutions and e-channels
no large branch network
no cash services in the branches
direct member of the SEPA payments network
we scale through technology

5. Mortgages
Contactless payments
ATMs
Acquiring
Mobile banking
Multi-account cards
Loyalty cards
Loans & deposits
Cards
Payments
E-banking

6. Partnerships
Partnerships are heavily embedded into LHV DNA. Banking licence, card acquiring and issuing licence and direct link to SEPA network are enablers for LHV to work with local and global companies to build mutually innovative solutions:
Issuing partnership with Kaubamaja Group
Payment processing partnership with Transferwise
Payment processing partnership with Coinbase
Colored coin technology development
LHV Bank has been highlighted as one of the emergent hybrid banks by MIT 2016 Digital Banking Manifesto.

7. In memoriam Banking 2000 BC – 2016?

8. Source: letstalkpayments.com

9. Why consumers adopt FinTech companies?
Easy account opening – 43,4%
More attractive fees – 15,4%
Access to different products and services – 12,4%
Better experience – 11,2%
Better service quality – 10,3%
More innovative products – 5,5%
Greater level of trust – 1,8%
Source: fintechranking.com

10. Why are banks lagging behind?
Banking is mostly about taking credit risks Stricter regulatory environment Different financial expectations Transformation from old to new takes time and money Retail offering has mostly local focus

11. How to reincarnate banking?
Industry is thankfully changing…
Open banking and API’s – new EU Payments Directive (PSD2)
Payments infrastructure improvements are in focus – SEPA Instant initiative etc.
Banks exploring new technologies like blockchain
More collaborative approach with FinTech companies
Behind most of the successful FinTech companies there is often a traditional bank.

12. Cryptographic Universal Blockchain Entered Receivable

13. What is Cuber?
Platform for real-time asset issuance, transport and redemption.
Financial instruments
Stocks
FIAT currencies
Any other physical or digital asset…

14. Vision „Building brick“ for next-generation financial services.
Open and easily implementable API services
Secure and low-cost infrastructure
Bank-backed assets
Compliance-in-a-box

15. Case study: Cuber digital wallet app
First proof-of-concept project on the Cuber platform:
~7000 payment transactions with 3 merchants:
~4000 in-store payments (cafes)
~2100 self-service payments
~900 P2P payments

16. Thank You!
Questions?
LHV Pank AS, Tartu mnt 2