Lloyds, the UK-based global insurance & reinsurance market is barring its members from investing in Irish and Luxembourg UCITS funds by 2022.
This is big news: Ireland and Luxembourg are the leading EU fund jurisdictions, and UCITS is one of the most popular open-ended fund structures in the world.
When such barring happens, it is generally due to a lack of compliance, but paradoxically, this time round, it is friction due to too much compliance that triggered it. More precisely, it is because of unnecessarily, onerous compliance requirements disproportionate to what the industry actually need.
The real problem is not too much compliance, it is compliance done in an inappropriate way without keeping the user experience in mind. There is a general assumption in the industry, that the more frustrating you make the experience to your client, the more compliant you are. It is, of course, untrue. Challenger banks have shown that, by using technology and data, you can make compliance friction-less, and fight financial crime at the same time in a way more effective manner than by adopting an analogue approach.
Vauban strives to provide a smooth onboarding experience to the investors of the funds we administer. We are currently working on a system that should make investors’ onboard in a matter of minutes.
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