23.11.2022 Finance Banking Data Insurance Luxembourg

LUXHUB & VERMEG launch Custodix Hub

Open Finance pioneer LUXHUB, together with banking and insurance software leader VERMEG, are today announcing a new partnership around the collection and processing of custodian data, available to insurance companies. Custodix Hub, through the combined tech expertise and industry knowledge of both partners, facilitates the flows and financial data exchanges between custodian banks and insurance companies, in a trusted and secure environment provided by LUXHUB. The two companies also announce a successful POC (Proof of Concept) with a leading player in Luxembourg.

Tackling the financial data collecting and processing challenges  

Nowadays, life insurance companies, as well as other external asset management companies,  face key challenges when collecting and processing data from custodian banks. “Data  collection represents a significant cost due to the multiplicity of custodians, the use of multiple  formats and the volume of transactions or the number of failures that require corrections,” explains Eric Bemelmans, Director, Digital Transformation, at VERMEG. He adds:  “Maintenance and scalability of custodian interfaces represents a significant fixed cost and  heavy workload for internal teams”. 

Another key challenge for insurance companies is the successful integration of increasingly  complex data – position reporting, securities and cash transactions, new asset classes,  derivatives, Solvency 2, etc. It requires functional expertise which, through the innovative  partnership and solution, is provided by VERMEG. Finally, technical expertise is crucial to master the multiple formats used by the custodian banks: Swift MT or MX files, proprietary  formats, XML files, FIX, web services.  

“Often, the different custodian banks send information in their own format. This requires life  insurance companies to execute a recurrent and often manual process of data retrieval,  formatting, reconciliation and injection into their Portfolio Management System.  

“With this innovative solution, we are mutualizing the effort, for all insurers, and we will have  more impact toward the custodian banks to request more automation. At the end of the day,  insurers will be able to continue to focus on their core business,” adds Eric Bemelmans.  

A central hub  

Through this partnership, VERMEG’s innovative solution becomes available in LUXHUB’s  central platform, linking insurance companies and depositary banks. The Fintech, which was  built by compliance and continues to be driven by innovation, offers a seamless flow and  exchange of data, in a trusted, secure and proven environment.  

“Through the automatic data injection into the PMS, insurers will be able to use increased  quality data while reducing their operational risks through an elimination of manual tasks. They  will also gain in efficiency through automation, with a significant reduction of costs,” underlines Claude Meurisse , COO, LUXHUB.  

Custodix Hub has actually been tested by a key local player over the summer, in a Proof of  Concept (PoC) project. It proved to be efficient over this period, as it validated the vision and  ideas of the life insurance companies, as well as LUXHUB and VERMEG’s ability to help the  wealth management industry in its digitalization process.  

A win-win partnership – leveraging each other’s tech and business  knowledge  

VERMEG is a leader in digital transformation with a business vertical approach, renowned  experts, and ready to use digital apps. VERMEG has been offering custodian banks integration  services and solutions for its existing clients in Luxembourg, and this for many years. 

“To offer the service and the solution with the right level of security and scalability, partnering  with leading Fintech LUXHUB was the right and obvious choice. Together we bring more value  to the insurance sector, as well as operational efficiency, service efficiency and innovation in  an “Open” and interconnected world,” highlights Anne Thiel, Regional Sales Executive,  VERMEG.  

On the other hand, LUXHUB, with its PFS – Professional of the Financial Sector – status and  its technical expertise in connecting the different stakeholders of the financial services industry,  provides a trusted platform and secure IT Infrastructure.  

“As advocated by LUXHUB since its very inception, it is the collaboration of specialized actors  and mutualization of knowledge and efforts that will help with the rapid and very necessary transformation of the financial sector.  

“Eventually, the insurance sector could greatly benefit from this innovative partnership, by  gaining significant time when collecting data from depositary banks, drastically improving the  customer experience, and pleasing their end-clients with a unique and efficient service,” concludes Claude Meurisse.  

Source: LUXHUB