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.