Organised by the Association of the Luxembourg Fund Industry (Alfi), the Luxembourg House of Financial Technology (Lhoft) and venture capital firm Middlegame Ventures, the was designed to tackle “critical needs and pain points” faced by the funds industry.
Sixty-three startups--including the Singapore-based regtech firm U-Reg--applied for the programme last year, with U-Reg announced as the winner of the fundtech competition during the .
For U-Reg founder and executive director Florian Dumas, the prize is really more than the win itself--the two-week-long, intensive programme itself was a very valuable experience. “What the programme brought us--or at least for me--is a better understanding of the Luxembourg ecosystem,” he explained to Delano during an interview in April.
Understanding the ecosystem and industry needs
“The Lhoft and the Alfi have done a terrific job of making sure that the participants understood the ecosystem,” Dumas said, “in terms of business understanding, in terms of requirements--whether it’s cybersecurity, requirements as a service provider. They also did a really good job and took a lot of time and effort to explain the problem segments of the industry.”
The programme included discussions as to what the investment fund industry was facing with regards to current challenges, how to solve them, what the processes look like now and what target processes should look like in the future, he continued. “There were mentorship sessions with a number of participants in the fund industry--and senior participants, actually, in the fund industry in Luxembourg--and there was the Alfi conference where we were able to network.”
More than the prize itself, what Dumas took away from the programme was the improved understanding of the Luxembourg ecosystem, a better understanding of the problems faced by the industry, the solutions that are needed and the networking opportunities.
“We were obviously very happy that we have won,” Dumas added, “but that’s positive collateral damage, I would say. The programme itself was the most important thing.”
Extensive regulatory requirements, but processes still manual
So what are the biggest challenges facing the fund industry?
Similar challenges are being faced by financial entities around the world, replied Dumas. “The biggest problem is that the requirements from the regulators or the compliance requirements are extensive,” he argued. “But the processes are still tedious, they’re manual, and they’re costly and time-consuming.”
The technology exists to make sure that clients can meet their compliance and regulatory requirements
“The biggest challenge is that these processes remain manual for different reasons,” he continued. “That’s actually why I have founded U-Reg. The technology exists to solve these processes. You need to understand the subject matter, you need to have a level of expertise, but the technology exists to make sure that clients can meet their compliance and regulatory requirements without giving away on the quality of the processes.”
But, he said, people are still using Excel--and they’re using Excel for the wrong reasons. Asked at a conference as to who U-Reg’s biggest competitor was, he replied that their biggest competitor was Excel. “People use Excel to manage data models. Excel is not built to manage data models. Emails are not created to validate workflows or tasks. It’s the biggest problem in the industry.”
“Input once, report to many”
And that’s where U-Reg comes in.
Founded four years ago, U-Reg is a regtech firm based in Singapore that provides regulatory and compliance solutions. “We solve the problem of manual processes, repetitive input and inefficient workflows or processes in regulatory and compliance.”
“Typically, the processes we help automate and digitise are onboarding, KYC, regulatory reporting, due diligence of service providers, staff compliance, ESG reporting. We’re an automation and collaboration platform that helps solve a global problem, which is why we are relevant in Singapore, but we are also relevant in Luxembourg.”
What makes U-Reg special is how they built the platform, Dumas argued. They followed a principle called “input once, report to many.” That means that people don’t have to input or process the same information multiple times. “Once data is in the system and validated, you can use it, re-use it, you can distribute it across a number of processes.”
Collaborate internally and externally
“Another feature of the platform that makes us different is the fact that you can collaborate internally and externally,” he explained. “By that, I mean that if you’re a user of the platform, you’d have access to a large number of features. But you don’t have to be a registered user of the platform to collaborate.” Documents and data can be collected and shared even if a person is not registered on the platform.
Other platforms often have collaboration features, but these stop either at the organisation or platform level. For U-Reg, on the other hand, collaboration continues to be possible.
Didn’t choose to focus on only meat or vegetables
Third, U-Reg is “very horizontal by choice,” said Dumas. There are a lot of people working on solving regulatory compliance issues, but they’re generally very specialised and focus on one specific problem, like screening or regulatory reporting. “It’s like when you’re cooking: you have people who are going to cook the meat, who are going to cook the fish, who are going to cook the vegetables--it’s super specialised.”
We made a choice--which is more difficult in terms of development and building a platform--to be very horizontal
“We made a choice--which is more difficult in terms of development and building a platform--to be very horizontal, which means that we provide an end-to-end platform where you can start a process and go all the way to the end, going through the different steps of a process.”
“That’s a business choice, that’s a strategy choice, and it seems that is the right one from the feedback we have with clients,” said Dumas. “But that makes us also special because that’s not necessarily what the majority of our competitors do.”
Luxembourg to be “important axis of development”
The fintech’s headquarters are in Singapore, but it does have clients in Europe. “The combination of us being relevant in the fund industry and the wanting to expand geographically--Luxembourg was a natural destination.”
Dumas had met with people from Alfi when they came to Singapore, and when he learned about the Alfi-Lhoft-Middlegame Ventures programme, “it didn’t take us long to decide whether we’d apply or not. It was a natural fit in terms of what we do, what we want to do and what they were proposing.”
Dumas concluded by noting that the participation in the Fundtech programme and their connectivity with the Singapore ecosystem has helped to build relationships. “As a result, when we go to Europe in a more meaningful way, Luxembourg will be one of the destinations of choice, obviously, because of the nature of the business and of the ecosystem.”
“Luxembourg will remain an important axis of development for us,” he said. “The question we face is: how do we do it? Do we try to do it ourselves? Do we try to have a local partner, which makes a lot of sense? And then it’s to find the right partner, for example. So we’re actually open to having discussion with people who might be interested in partnerships.”
This article was published for the Delano Finance newsletter, the weekly source for financial news in Luxembourg. .