Pascal Morosini (i-Hub): KYC Process Outsourcing Takes Off
"When I started the i-Hub project five years ago, everyone was hoping for the advent of an AML/KYC solution that would allow for mutualization," confides Pascal Morosini, its CEO. Spuerkeess, Banque de Luxembourg, and Banque Internationale à Luxembourg are joining POST Luxembourg and BGL BNP Paribas in this ambitious project. A huge step forward. Interview.
Can you describe i-Hub in a few words?
i-Hub is the KYC outsourcing solution, specialized in digital Customer Due Diligence (CDD) reviews. Our comprehensive approach is to offer an alternative to in-house KYC/CDD management through an outsourced service solution that accelerates compliance to regulatory obligations and through the digitalisation of the KYC/CDD process in its entirety. Our bespoke and efficient KYC Partner solution enable our clients -- regulated entities subject to AML/KYC laws - to concentrate on their core functions and benefit from our extensive “Know How” optimized processes and i-Hub platform. Our system allows our clients to migrate or create their clients' KYC files in our application. This capability opens the door to highly secure outsourcing with the latest technology to automate the entire process of reviewing clients' KYC records. Our objective is to give a "verdict" on the files processed and to launch actions to complete the reviewed files. For example, our back office validates identity documents or any other documents specific to the business relationship of our clients, whether they are natural or legal persons. In order to collect the supporting documents, we offer a digital connection tool allowing users to submit the requested documents via their banking application and to receive alerts. The icing on the cake is that it becomes possible for these users to make centralized modifications and share the documents validated by us with their business relations. Five years ago, when I started, everyone had been talking for ten years about a project for the mutualization of KYC files. The big problem with this type of project is trust and therefore the security of the processing. It is impossible to gain the trust of banks without a top-level IT infrastructure and security control. POST has taken responsibility to launch this initiative on a solid basis - we are a regulated support PFS - our data is hosted and secured in a Tier IV data center in Luxembourg.
"It is in the interest of the entire Luxembourg financial center to pool our efforts in order to comply with the regulator's requirements to combat fraud.”
Does this project mark a trend toward outsourcing?
Absolutely. At the speed at which regulations are changing, entities subject to AML laws want to outsource certain processes to focus on their core business. On average with i-Hub, they save 40% of their KYC process and reduce the time it takes to onboard a client. We take the pain out of managing many of the burdensome aspects, allowing them to focus on control and customer service. Moreover, our customers (service providers) are now discovering the virtues of sharing: When several of them address the same population, it becomes easier to access the already verified AML/KYC data of the users they have in common within i-Hub once they have consented to share their data. Thus, for users who are customers of several banks, a single central update is now sufficient! The banks in Luxembourg assume that they are not competitors in KYC. It is in the interest of the entire Luxembourg financial center to pool their efforts in order to comply with the regulator's requirements to combat fraud. Together, i-Hub partners will become more resilient and strengthen the Luxembourg financial center with modern digital tools.
"At the speed at which regulations are changing, entities subject to AML laws want to outsource certain processes to focus on their core business."
How do you see the future of i-Hub?
In 2023, we will host more than one million identities of individuals and companies that will have to be recertified according to a well-defined schedule, in parallel with the gradual arrival of new customers. We will also expand internationally by welcoming international clients served from Luxembourg or locally. We are targeting Europe as a first step. We also want to serve management companies and corporates with an offer that is adapted to them. Overall, I anticipate a tightening of AML/KYC legislations. You only have to look at the press to see that the issues to be resolved are multiplying: Identity checks, document fraud, and sanctions list checks, not to mention the fight against corruption. We're not going to be idle and that makes me very confident for the future.