Financial institutions and service providers need to open up
In the future, innovation will be achieved through defining new digital interfaces: APIs. Luxhub, a start-up created in Luxembourg in May 2018, is taking on this role of smoothing out the operational integration of the financial institutions with the main mission of acting as a facilitator for fintech, notably helping them connect to banks.
Luxhub was born by combining an extensive banking knowledge with the agility of a start-up. “We imagined a company which gathers credibility, know-how and the power to sustain all the actors of the new digital era,” first explains Jacques Pütz, CEO of Luxhub.
In today’s digital era, traditional European financial institutions and agile fintech (Compliance, Artificial Intelligence, KYC, AML, Reporting, Payment, Aggregation, Authorization, Fraud Detection, Big Data) will need to opt for close partnerships in order to deliver outstanding services that match and answer current – and future – customers’ needs.
Therefore, all the players active in financial services will be able to exchange and collaborate through the technical marketplace offered by Luxhub, an innovative solution that will stand out and help financial institutions put the final customer back in the centre of interest while keeping up with an increasing pace of innovation.
We aim to help banks of all sizes to become digital and comply in an easy way to upcoming regulations.
Jacques Pütz, CEO (Luxhub)
“Nowadays, banks need to differentiate themselves more and more by creating an exciting user experience, where the customer has to put as little effort as possible,” adds the CEO of the Luxembourgish start-up, before continuing: “The new flourishing economy is only sustainable through exchange and collaboration. Open banking is seen as a true game-changer in the banking industry as it redistributes the roles and forces traditional actors to get rid of silos. It actually represents a real ‘culture-change’ in the old financial institutions.”
In such a period of transformation, financial institutions need to redefine their approaches, strategies and products. Luxhub can provide them with the necessary technical solutions. All the financial institutions are benefiting from these new mutualized services and it can be seen as an accelerator of innovation.
Moreover, ten years after the financial crash of 2008, financial institutions (banks, insurances, funds, etc.) are still facing massive post-crisis regulation. The European regulator has already defined a lot of new rules to prevent the whole financial system from collapsing, with more coming in the months and years to come. The technical implementation of regulatory obligations represents a major effort of development for financial institutions.
Time for mutualisation
Luxhub’s main idea is to mutualize efforts between the impacted players and respond together to the mandatory legal obligations, in order to significantly decrease costs.
Luxhub’s PSD2 XS2A Compliance Product represents the start-up’s first mutualized effort, helping European banks to technically comply with the mandatory dates of the PSD2 directive (Second Payment Services Directive).
All different actors need to implement these new regulations. So, the time for mutualisation has come.
PSD2 forces banks to offer free dedicated interfaces to European-regulated third parties, allowing them, with the consent of the final customer, to access account information and initiate payments. The aim of the regulator is to foster innovation and increase competition in the European payment market.
Luxhub will respect the mandatory milestones imposed by PSD2 and its marketplace will be ready on 14 March, mandatory date for payment institutions to reveal their PSD2 Sandbox, a testing API facility for regulated third-party providers. Then, the publishing of the real “Production” dedicated Interfaces on 14 June will herald the start of the European open banking economy.
“Currently, we are finalizing the PSD2 implementation of Luxhub’s European banking customers and we are still getting on board with some more European financial institutions during the next weeks,” adds the CEO of Luxhub.
Accelerating the process of innovation
Luxhub’s marketplace will also help European regtech and fintech companies to make their services available in a secure way. It will offer the (new) service providers all the necessary tools (different technical environments, for example) to collaborate and pitch their services to their respective prospects. In this respect, Luxhub aims to further develop trust and interaction between the different players of a new dynamic and vibrant ecosystem.
“The goal is to find innovative solutions together, so that financial institutions can choose in an easy and secure way the services they need, allowing them to act faster. These solutions, available to all the players within the ecosystem, do not confer a specific competitive advantage but rather help them in the creation of new offers,” comments Jacques Pütz.
Luxhub’s motto, “We connect you”, also materializes itself through the organization of events gathering financial institutions and fintech entrepreneurs to further discuss new trends and potential collaborations and therefore share their common vision of the future of banking.
Providing an additional, common, highly secured layer in front of banks
“Luxhub increases the speed of innovation. Our uniqueness is that we focus on the complexity of the new open banking era and act like a service company and an accelerator. The marketplace designed by Luxhub advocates innovation and collaboration between traditional banking players and service providers, all participating together in the new API economy, also comments the CEO of Luxhub.
For instance, banks and fintech, when connected to the Luxhub marketplace, will be able to rapidly develop PoCs (proof of concept), test and implement new and innovative service products together. In this respect, Luxhub acts as the accelerator of accelerators.
Luxhub is all about innovation, it’s in our blood! We innovate and are creative in order to find common solutions to the new pace of change, which is already really fast and will get even faster”, concludes Jacques Pütz.