Luxembourg is known all over the world for its financial sector, mostly for being the largest European fund domicile and the second largest fund center in the world after the US. The country is also the host for one of the largest numbers of international banks, listed the first ever green bond to enter the market and more recently launched LGX, the world’s leading platform dedicated exclusively to securities that are 100% green, social or sustainable. Over the last fifteen years, the country also has seen the birth and development of hundreds of ICT companies and tech startups. Inevitably, these two domains of expertise mixed and merged to witness the rise of Financial Technologies, or FinTechs, which have now been transformed into more specific terms such as InsurTech, FundTech or RegTech. The list goes on and resulted in the creation of a dynamic ecosystem.
Banks, startups, associations, regulators and the government of Luxembourg, notably through the Digital Lëtzbuerg or the Infrachain initiatives, are investing and moving towards the same direction with the goal of boosting innovation in the finance sector. In late June, Minister of Finance Pierre Gramegna, along with Nicolas Mackel (CEO of Luxembourg For Finance) and Nasir Zubairi (CEO of the Luxembourg House of FinTech), promoted Luxembourg as a FinTech nation in California and stated: "I’m happy to see that our country is recognized by the Silicon Valley startups as a top-notch financial center and European FinTech hub".
Treasury + Tech
"Behind the scene, evolution brings more performance and capabilities" explains François Masquelier, President of ATEL, Senior Vice President & Head of Treasury and Enterprise Risk Management, RTL Group. As a matter of fact, treasurers are facing all of these evolutions and must take the best out of them and understand how to use them to better focus on their added value. "Recipients of all the cash flows of their organizations, they are particularly well-placed to witness those changes. The major challenge is to find his way in this jungle of new solutions and FinTech companies. IT standards are still missing, on e-payments, for example. It is also to convince top management of the accuracy and reliability of proposed solutions. Eventually, IT evolution offers opportunities but requires also some IT knowledge and resources for implementation" he adds.
The transformation of insurance
When it comes to digital and innovation, OneLife is probably one of the most active players in the life insurance sector, working with several startups to develop InsurTech and RegTech solutions. The company is currently working on integrating the digital signature, a must-needed step to reach its digital objective. Since 2016, this life-assurance specialist has repeatedly performed digital feats to deliver genuine added value to its partners but also to its staff in-house. Marc Stevens, its CEO, explains: "The move towards digital technology is one of our three priorities for 2017. What is at stake, though, is not just technology, but human beings". According to Christophe Regnault, Digital Marketing Manager, "OneLife positions itself as a genuine digital-technology leader in the radically-changing life-assurance profession".
From physical to digital payments
Ghela Boskovich is the Head of FinTech and RegTech Partnerships, Startupbootcamp Fintech. She shared her expertise and vision during ICT Spring 2017: "Why are we so attached to the payments systems that are currently in place? We have to innovate and to stand out of the legacy system". According to her, there are diverse perspectives like taking inspiration from emerging markets or e-commerce giants: "Apps like AliPay combine perfect integration with commerce, social and… payments. Diversity matters and we challenge every institution to make a change and not to be only based on legacy".
Local mobile payments player Digicash Payments lately met with success and recently joined forces with Payconiq to establish a Benelux-wide presence of the mobile payments initiative. "DIGICASH continues to prove that FinTech partnerships are well and truly a reality today and that Luxembourg’s retail banking sector is one of the most innovative in Europe" highlighted Raoul Mulheims, CEO of Digicash. On the partnership with ING, he added, with Frédéric Kieffer, Head of Retail Banking at ING Luxembourg: "We are offering ING customers a cardless payment solution, which is truly innovative, easy to use, 100% secure and completely free".
Bringing banks closer to their customers
Just like ING, other banks from Luxembourg have been using the Digicash Payments app, namely BIL, BGL BNP Paribas and BCEE. Aiming at creating new experiences and allowing users to find and manage their banking information at anytime, anywhere, using any device, digital has already redefined the customer relation.
According to Quentin Vercauteren-Drubbel, Head of Wealth Management at KBL European Private Bankers, bringing digital and innovation doesn’t mean replacing Humans, and rather places emphasis on human relations. Yet, bringing new tools will definitely help the customer. "Digitalization should bring more added value to clients, either in their relationship with their bank/banker, or in the quality of service they will get from their bank/banker" stated Pierre Etienne, Head of the ABBL’s Private Banking Group Luxembourg.
The funds industry benefits from the blockchain technology
In order to answer the funds industry challenges – reducing costs in an environment of downward pressure on fund fees, dealing with new regulations and entering the digital era – FundsDLT, based in Luxembourg, aims at improving efficiency in the fund order processing, by using distributed ledger technology and smart contracts. With blockchain, it offers transparency and a high level of efficiency through the automation of processes. The first ever funds transaction using blockchain was actually completed using the FundsDLT app, which was developed by Fundsquare, InTech and KPMG Luxembourg. Said Fihri (KPMG) explained: "It is really exciting to be part of such a tremendous step forward. We not only replicated trades in the blockchain; we moved real cash and invested in a real fund. This successful prototype could eventually be used in different configurations: distributors, IFA, robo-advisors and D2C". According to Olivier Portenseigne, Managing Director of Fundsquare, this first success was the first step in building the necessary trust, showing that blockchain can actually answer the current needs of the asset management industry in terms of operational efficiency and digitalization.
Financial leaders to focus on innovation next November
In the digital age, how has evolved the financial sector and how companies are keeping or creating their leadership? What future is to expect for the Luxembourg’s financial sector and how to comply with the new standards in terms of technology, regulations, human’s experience? The LHoFT, Marc Stevens, Agnes Gerbaud Seuret, (Chief Transformation Officer & Member of the Executive Committee Retail and Commercial Bank, BGL BNP Paribas) and François Masquelier – a former laureate of the Outstanding Contribution to Luxembourg Financial Place award in 2015 – have already confirmed their participation to this remodeled Luxembourg Finance Innovation Summit, which will bring together 250 professionals from the finance and banking sectors in Luxembourg, on November 30th. The event will also recognize and reward the best local initiatives and solutions through the Luxembourg Finance Awards.
More information: gala.infinance.lu
This article has already been published in BEAST Magazine #8 / www.beastmagazine.lu
Publié le 30 octobre 2017