Last May, Finologee and Harmoney announced a joint venture and the creation of an innovative product aiming at redefining KYC processes and therefore at accelerating the digital transformation of financial institutions. We recently met with Raoul Mulheims (Co-founder & CEO, Finologee) and Thomas Van Maele (Co-founder & CEO, Harmoney) to further discuss this collaboration and the actual reasoning behind its production, as well as the future ambitions and common values of the two Fintechs.

“When building a partnership, the way you think about it and later develop it is crucial. You can either build, buy, or co-develop with a trusted partner, with each party sharing its specific expertise and know-how”, first explains Raoul Mulheims. He continues: “Finologee is a platform operator based in Luxembourg and is the holder of the PFS license, under the supervision of the CSSF. Along with being the technical operator of Digicash and M-pulse in the Grand-Duchy of Luxembourg, we are providing platforms to several banks and are notably facilitating onboarding processes and ensuring PSD2 compliance”. According to him, the need to smoothen onboarding is just the first step to deal with larger KYC requirements, AML regulation, and more. The co-founder of Finologee then underlines that when he discovered the services offered by Harmoney, he soon realized that both companies could benefit from each other’s expertise and therefore complete one another with their specific knowledge, with the goal to provide financial players with a robust KYC solution, adapted to the Luxembourg market.

Harmoney is based in Ghent, Belgium, and was built to answer the needs of wealth managers and private bankers. “We did not create Harmoney as a tech company. Personally, I’m not a tech person but I have worked for years in the financial industry and was able to acquire a strong knowledge and understanding. This is where I actually noticed that technology could smoothen several administrative and redundant tasks“, underlines Thomas Van Maele. The CEO also highlights the growing regulation in Europe, and notably PSD2, AML, MiFID II, IDD and several more. Therefore, more and more administrative tasks and reports are required to comply with these new – and strict – regulations. He adds: “with our platform, we want to simplify these procedures. Basically, it means that private bankers, insurers, brokers, etc., will be able to deliver more value to their clients, while eliminating redundant tasks”. With Harmoney, all stakeholders – private bankers/wealth managers, back-office staff and customers – are benefiting from the use of the platform, which facilitates the onboarding of new clients, starting from the very first steps and continuing through the entire client lifecycle. “With the ambition of entering the Luxembourg market and after meeting the Finologee team, we decided to work collaboratively with a partner who shares the same vision and values as we do, with the mission to create an innovative solution to disrupt the industry,” explains Thomas Van Maele.

 

A one-stop-shop to smoothen the relationships between financial institutions and their customers

The result of this fruitful collaboration, KYC Manager, offers several customer journeys to the players, by gathering several actors on a single platform. “Thanks to an open architecture, we are able to offer multiple solutions adapted to the banking and insurance sectors, with modules which can be activated depending on choices and use-cases. It deals with everything related to KYC: AML, remediation, onboarding, etc. and can be personalized depending on the needs of the financial institutions,” says the CEO of Harmoney. Currently, as highlighted by Raoul Mulheims, most banks in Luxembourg are still relying on paper when it comes to filling in documents. He adds: “also, European – and local – regulation is evolving rapidly and more information and data are required by banks: they need to constantly adapt in this new environment. This is where digital actually comes in and adds significant value”.

In contact with most banks and insurance companies in Luxembourg, the Finologee and Harmoney experts aim at accelerating the digital transformation of the sector, and at answering the following question: how do we deal with and manage our clients’ data? KYC Manager is defined as a complete offer, with the combined expertise of both Finologee and Harmoney. Its mission is to answer the challenges currently met by financial institutions in Luxembourg, as it relieves private bankers, wealth managers, etc. from administrative duties. In Belgium, Harmoney is working with numerous customers and notably an insurer which counts more than 200,000 end-clients. “For instance, we were able to update identification documents with an enormous success rate already in less than two weeks. Digital has many benefits, namely an immediate and efficient approach for the banker/insurer and the clients, the ability to update data and risk profiles in real-time and, last but not least, lower costs“, says Thomas Van Maele, who continues, “using a digital KYC tool adds significant value during the entire customer lifecycle”.

 

A fruitful collaboration

The ambition is to achieve a full integration of the Finologee modules into KYC Manager, backed by a strong knowledge of the Luxembourg market in terms of compliance. “One of the first steps will be to optimize the product for the different segments – banking, insurance, private banking, etc. Nowadays, digital transformation projects in the financial sector are time-consuming: it starts with the analysis of current processes, the need to hire a consultancy firm, find and select the appropriate solution… and doing all of this in a strict regulatory environment. If done internally, it can take up to 36 months. We actually did all the ‘heavy lifting’ by making our solution compliant, which allows financial institutions to save a considerable amount of time and effort,” explains Raoul Mulheims. Another advantage of KYC Manager is the fact that it was built as an end-to-end solution, with banks starting from the very beginning, then going through the back-office, and making sure they are/stay compliant. As highlighted by the CEO of Harmoney, “it’s not just addressing one single challenge but it is actually dealing with clients’ data during their entire relationship with the bank. On the bank’s side, it ensures a high quality of data that come in and out of financial institutions, and notifies high risk clients in real-time. Moreover, realizing end-to-end digital workflows with KYC Manager only requires one integration with the bank/insurer instead of separate integrations for every single workflow step, like remote identification, digital signing or AML screening. A single integration compared to multiple integrations saves a lot of time which is crucial in today’s fast-paced environment”.

The two experts also underline the fact that both companies, which are innovative and eager to transform the financial services industry, are aligned on their objectives and are committed to making this new type of collaboration work. “Right from the start, we noticed that we were sharing the same values and vision. We are also working with similar technologies and believe in the same concepts”, adds Raoul Mulheims. Thomas Van Maele agrees: “as Fintechs, we want to bring new and innovative solutions to the financial sector. We are convinced that by bringing solutions like the one we are now offering, we are answering to key challenges currently faced by financial players. It will also allow them to differentiate from competitors. That’s what digital does”. Both companies are also conducting constant regulatory benchmarks and are updating their solutions on a regular basis: as regulated entities, the companies are audited and as soon as European and local legislations are passed, their solutions adapt. “We are talking about perfect economies of scale, because we ensure a continuity of compliance in a mutualized way. Also, and it is important to remember it, all companies are still responsible of their own compliance”, adds Raoul Mulheims.

 

As a conclusion, the CEOs highlight again the unique partnerships between their two companies and their wish to provide financial institutions with innovative solutions. Their mission is therefore to bring added value to the actors of the banking and insurance sectors, through the implementation of digital tools. In this respect, KYC Manager, as a robust and integrated product, promises to redefine Know Your Customer processes in Luxembourg.

 

Interview by Alexandre Keilmann


Publié le 09 juin 2020