Digital KYC Insights#1
Open Banking with LUXHUB
In a new series of podcasts, Digital KYC Insights, Frank Roessig - Head of Digital Trust Solutions at Proximus Luxembourg - explores how digitalization can improve the AML/KYC and Client Onboarding processes with industry experts. In the first issue of Digital KYC Insights, he discusses how the digitalization of KYC can improve Open Banking in general, and specifically how it does enhance the user and customer experience, with Marco Gasparini, Chief Governance Officer at LUXHUB.
Special KYC challenges
LUXHUB, as a key player in open banking, has a business model that revolves around technology and digitalization and requires automated services to a large extent, with human intervention limited to complex situations. The KYC process poses unique challenges for LUXHUB due to its dual licensing as a support PFS (Professional of the Financial Sector) company and payment institution. Adapting the KYC processes and policies to accommodate differences related to products and clients is crucial. Additionally, user experience holds increasing importance in the B2B world as well, as stated by Marco Gasparini.
More Digital Brings More Value
To address these challenges, LUXHUB has opted to acquire a digital KYC tool. As a lean company, the tool primarily serves the Sales team and the Compliance team, enabling seamless information and document collection/sharing. Ergonomics are essential, particularly for sales people who require clear guidance throughout the process steps. In the medium term, LUXHUB intends to implement cell phone onboarding in particular for future B2B2C services, enabling a client-centric self-service approach of certain aspects of the KYC process.
“Whatever Can Be Easily Automated Must Be”
Marco Gasparini emphasizes the importance of automating basic or repetitive tasks within the compliance team. LUXHUB is currently developing a streamlined process where clients complete an online form, providing their data, documents, and signing contracts. The compliance team can then review the information, request additional details if needed, conduct name screening and risk evaluation, validate the score obtained, and accept the client. Conveniently, this is centralized in a Compliance Portal.
To ensure ongoing due diligence based on risk levels, LUXHUB's Chief Governance Officer advocates for automatic reminders and alerts so that the compliance team can notify clients when their documents are about to expire, for instance.
Marco Gasparini believes that digitalization offers room for efficiency gains by eliminating task duplication and enhancing the identification of money laundering or terrorism financing risks. He suggests implementing a feature that automatically captures and uploads ID documents since much of the compliance team's KYC remediation work revolves around requesting valid or renewed IDs.
Digital KYC Helps to Keep the Customer at the Core
Having a digital KYC tool significantly aids in time-to-market and shortening the sales cycle, both crucial factors in LUXHUB's business area. While being a profitable company is important, LUXHUB strives to maintain a balance between profitability and compliance, always keeping the customer at the core of their operations, with compliance serving as the necessary framework.
To listen to the complete podcast, please click here.