VERMEG and LUXHUB launch Custodix Hub for data collection and processing

Thursday 24 November 2022 15:06 CET | News

Netherlands-based VERMEG and LUXHUB have launched Custodix Hub to connect data from custodian banks and 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 company in Luxembourg.

Netherlands-based VERMEG and LUXHUB have launched Custodix Hub to connect data from custodian banks and insurance companies.

Overcoming financial data collecting and processing challenges

Life insurance companies, as well as other external asset management companies, face key challenges when collecting and processing data from custodian banks. VERMEG says that 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. 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.

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 new solution, the two companies are mutualising the effort, for all insurers, and they 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.

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 on compliance and continues to be driven by innovation, offers a seamless flow and exchange of data, in a trusted, secure, and proven environment.

LUXHUB’s officials stated that 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.

Custodix Hub has been tested by a player in Luxembourg over the summer of 2022, 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.

Leveraging each other’s experience and technology

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.

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.

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Keywords: financial data, data sharing, data analytics, banks, insurance, partnership
Categories: Banking & Fintech
Countries: World
This article is part of category

Banking & Fintech




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