2022 is a milestone for the LHoFT, marking the fifth anniversary of the financial services initiative, initiated by Pierre Gramegna, then Minister of Finance. What was the main objective when creating the organization and what have been your main achievements since then?
Nasir Zubairi: The main objective for the creation of the LHoFT is stated as our mission: to drive technology innovation for Luxembourg’s Financial Services industry, connecting the domestic and international FinTech community to develop solutions that shape the world of tomorrow and that will ensure the continued competitiveness of the financial centre. We review this mission each and every year as part of our strategic planning, but aside from a couple of minor grammatical changes, we believe it still holds as the mantra for the LHoFTs purpose. As for achievements, I always feel that this is for our stakeholders and the broader community to decide, but we are pleased that Luxembourg has a vibrant and burgeoning Fintech community, that, at our last estimate in 2019, encompasses over 220 firms, generating in excess of €500m in revenues, with €130m in capital. The LHoFT houses 84 firms and has over 150 members, many of whom come from abroad and are enjoying doing business in Luxembourg. Critically, the fact that they are doing business with the traditional finance sector, indicates that a level of digitalisation is being prioritised and that our mission is being fulfilled. Our members have raised in excess of €1 billion in financing over the past 5 years, of which the LHoFT has had a hand, in some shape or form, of assisting with €430 million in financing.
Yuriko Backes as the new Minister of Finance, Christophe Regnault as the new Head of Marketing of the LHoFT Foundation, Romain Iovalone as new Head of Events. Your organization seems to be at a turning point. What are your ambitions for this new year?
- Z.:Change is always an opportunity. We are working on LHoFT 2.0 at this 5 year milestone. Some strategic pivots, some new initiatives, but, very importantly, as with every maturing company, is to look at internal processes, to look to do what we do, but do it better. Before summer, we will look to celebrate the 5 years of the LHoFT and to communicate on what we see as priorities going forward.
How have you seen the fintech landscape evolve in Luxembourg and what is the place of the LHoFT to position Luxembourg as a strategic fintech hub?
- Z.:As the figures previously stated show, the hub is growing and evolving, and making a difference to Luxembourg’s economy, directly and indirectly. We have built good credibility internationally, working with partners from all over the world. Key is that we don’t look at this competitively; we seek to collaborate with all to drive digitalisation in financial services and find solutions. There is always more work to do and improvements to be made. Hopefully, now seeing some rays of sunshine on the Covid Pandemic and business travel beginning to open up again, we will look to re-catalyse our quest for greater international awareness of the opportunities offered here in the Grand-Duchy further over the next few years.
What are the main technologies that are currently redesigning the finance place according to you?
- Z.:Blockchain and its associated ecosystem – Crypto and Tokenization predominantly, Central Bank Digital Currencies (CBDCs) in the near future. A level of AI is beginning to creep in at the level of “Automated Intelligence” and “Assisted Intelligence” in the form of data management solutions, particularly in relation to customer onboarding and regulatory reporting.
Cryptocurrencies are making the buzz right now and CoinHouse just set up offices in Luxembourg. What is your view on this rising trend?
- Z.:Cryptocurrencies can no longer be ignored or dismissed as a fad, and, for those with vision, should be acted upon as an opportunity. Luxembourg has, in many ways, been a pioneer in this space. Bitflyer and Bitstamp were the first two crypto related firms to be regulated as payment institutions in the EU, out of Luxembourg. Swissquote is the first credit institution, the first bank, in the EU to be authorised to provide crypto related services, out of Luxembourg. Paypal is beginning to offer crypto wallets under the umbrella of its Luxembourg HQ.
This kind of new trend provides new opportunities to the funds and assets industry. What technologies should they have under the radar?
- Z.:We have conducted a large-scale survey of the Fund Industry in Luxembourg, in partnership with PWC and the support of ALFI to understand their attitudes towards Crypto assets. The report will be published on February 9th in conjunction with an event, hosted at PWC, to dig into the findings. In general, quick and substantial wins can be had in the asset management industry through better data management solutions – helping to improve decision making and lower costs of compliance and reporting. With the focus on Sustainable Finance and the opportunities presented by tokenization in this space as well as more generally, understanding and embracing blockchain solutions should be an imperative for most actors.
More info on the event “Crypto-Assets Management Survey” on February 9th HERE
