i-Hub uses a continuous management platform to offer the end-to-end maintenance of KYC (Know Your Clients) records. A unique solution developed within the ecosystem of the POST Luxembourg group and run by EBRC. (Photo by rawpixel on Unsplash)
Introducing themselves as a “KYC Utility”, i-Hub launched its services in December 2018 in collaboration with a major bank of Luxembourg. Other stakeholders such as fund managers and transfer agents soon expressed their interest. The platform, the only one of its kind, which enables the outsourcing of continuous updates and the mutualization of KYC records, has gathered much interest further to the cost increase of regulatory compliance and the growing penalties for lack of vigilance!
Data is and always will be at the heart of financial activities, and more specifically of regulated activities. The data related to customers – whether they are natural persons or legal entities – is undeniably strategic, and ensuring it is reliable and up-to-date is a major security challenge. Beyond the obvious business aspects, complying with the various regulations has kept costing more and more since the financial crisis of 2008.
Laws and regulations for the fight against money laundering, terrorist financing, corruption and frauds require a high level of vigilance from the financial institutions and other regulated bodies that must comply with them. In particular, they have to be able to identify, verify and categorise customers according to their risk level. In this aim, they rely on their own internal risk management policies before dealing with any new customer, and once the customer is approved, all along the business relationship.
“The challenge for the financial service industry is to be able to use the data amount and depth, be it data already available or to be acquired, so that they can meet the requirements of the most stringent regulators and improve the services offered to their customers”, explained Pascal Morosini, CEO, i-Hub.“And for good reason: the costs of acquiring and updating data, carrying out compliance checks and drawing up regulatory reports have kept increasing.”
i-Hub or the principle of mutualization
This very context is the working environment of i-Hub, a subsidiary of POST Luxembourg created in 2016. The principle is simple: the highly-secured platform makes it possible to centralise and mutualize the document and data management for the customers from the regulated bodies. The services include the collection, verification, validation, continuous management and storage in digital format of identification data. The platform is easily accessible for regulated institutions and their underlying customers.
“i-Hub eliminates the need for those institutions and their customers to provide several copies of documents depending on the number of counterparties and their respective relationships, said Pascal Morosini. The platform significantly reduces risks and inefficiencies thanks to a robust and resilient control environment in which data and documents are categorised according to the required level of vigilance. In practice, it saves both time and money, while also improving the accuracy of the data and documents enabling professionals to focus on controls, analysis and their core business by outsourcing to a specialist!”
For the financial sector and other regulated bodies
i-Hub improves the collection of customer identification documentation, offering significant operational effectiveness. A welcome bit of progress compared to the often tedious, paper-based customer registration processes. “We are able to offer a single, digital and secure KYC record to institutions such as banks, insurers, management companies, securities depositories, and others, which considerably reduces needlessly duplicated efforts for those institutions and their customers, said Pascal Morosini. What is more, the end customers can control where and when their data is shared via the platform and an App, in accordance with the GDPR criteria, the European data protection regulation. In other words, customers of those institutions are able to personally check which identification data the institutions have about them and can update that personal data directly, upload documents, and more.”
Pascal Morosini emphasizes the concept of outsourcing a continuously-managed KYC record maintenance service coupled with the benefits of mutualization, which distinguishes i-Hub from other KYC solutions. “Thanks to the constant monitoring of updates to data and documents in a controlled and standardised environment, i-Hub helps its customers (regulated professionals) managing recurring costly remediation plans.”
Guarantees offered by strong partners
i-Hub also guarantees the best hosting conditions in Luxembourg and the best security conditions at EBRC, which has the status of support PFS (Professional of the Financial Sector) whose activities are regulated by the CSSF (Financial Sector Supervisory Commission). “Due to the very nature of the business, we are required to provide the highest guarantees in terms of security”, said Pascal Morosini.“Although the service is mutualized, it is not in the public cloud. We chose the ‘on premise’ method in Luxembourg, in EBRC’s certified Tier IV Data Centres. Access to the platform is also protected thanks to an authentication method involving LuxTrust. And although blockchain technology was initially considered, it was dismissed due to the importance of the “document repository”. Along with our partners, InTech and EBRC, we selected the most appropriate technology enabling us to support the business aspects at the best, guided by the experience of our compliance officers. We can only congratulate ourselves in this regard!”
In this sense, i-Hub is a unique project addressing an increasingly pressing issue as regards the management of KYC, a pure product from POST Luxembourg, taking advantage of the skills of its various subsidiaries, InTech, Victor Buck Services, Editus, Post Telecom and, of course, EBRC.