06.10.2022 Finance Fintech Talents

The road towards resilience: innovation, governance, funding, and talents

On Tuesday 4 October, FinTech Belgium launched the Digital Finance Summit in Brussels – the perfect opportunity for Luxembourg to be represented. The event intended to explore a broad range of topics – from Resilience and ESG to Digital Finance, and how it contributes to making the society more resilient.

Resiliency is the ability to adapt in a constantly changing environment and has become the new buzzword since the onset of the pandemic. During this event, Alex Panican (Deputy CEO, The LHoFT) introduced the key factors of resiliency, together with a panel of experts, across 4 main pillars: innovation, governance, funding, and talents.

Innovation to creating value in uncertain environments

“The business turned upside down by GAFA using and monetising data, it is one of the major challenges for banks right now as we cannot compete from a tech point of view” started Analia Clouet (Secretary General, Banque Raiffeisen). She explained that today, 60% of the time spent by IT departments is dedicated to regulation. “It’s huge and it represents less time for launching new products or ensuring the customer journey.” Banque Raiffeisen is a corporate bank which focuses on long term and sustainable growth. They are using artificial intelligence, digital tools to improve sales performance and reduce the time spent on administrative tasks. It differs from dominant organizations meaning large banks using digital tools to help them maintain their reach and from unconventional companies such as startups, fintechs, neobanks which use digital tools to seize opportunities, breach on the market.

Better governance with Augmented Decision-Making

Vincent Defour agreed as CEO of Trensition, an AI-driven strategic intelligence company helping companies in their strategy and innovation with real-time trend insights. As companies are dealing with an overload of information, it induces more risks and the risk of loss occurred, generally, due to the CIA triad (Confidentiality, integrity, and availability). “The time spent on the regulatory aspect has increased drastically compared to 10 years ago. We work on the value chain together with partners from procurement to risk management in order to break down the silo effect and make companies more agile. This is where startups come in. “At Transition, we monitor global news and provide a Trend Radar to support companies in making faster and more informed decisions.”

The need to finance new digital infrastructures: who pays for innovation?

In times of crisis, it is more and more complicated for entrepreneurs to scale up and the transition towards digital and sustainable economies needs to be financed. “When you look at traditional funding sources as bank loans compared to capital markets, the proportion in the US, in Asia and in Europe is completely different (25%/75% in the US, 85%/15% in Asia, 75%/25% in Europe)” explained Fabian Vandenreydt (COO, NowCM). “Both bonds and loans are financing options for businesses but issuing bonds is easier than making loans and that is why we offer digital tools to enter capital markets. In the Nordics, Finland and Norway in particular, they already benefit from advanced solutions linked to climate change. Some organisations came to us and wanted to issue green bonds.”

Facing talents scarcity

The technological challenge induces a shift towards technical profiles and a need from management teams to instill a different corporate culture to attract, retain and upskill talents. According to Beatrice de Mahieu (Board Member of FinTech Belgium and co-author of the book “Shiftmakers”) “leaders have a role to play in motivating employees to develop their skills, exploit their full potential. Young people are disconnected with today’s society. They need to find a purpose again; leaders need to bring them back into the system”. Talents’ attractivity has become quintessential but there is a clear scarcity of resources at a time when companies need to hire cyber, cloud, data, resilience experts, data scientists, full stack, UX developers. Moderator Panican to add that there is a clear dichotomy on the market between what companies need and what students are currently learning at school. Educative programmes are no longer adapted to the market’s needs.

In that sense, the Luxembourg House of Financial Technology is leading several initiatives to reconcile the market’s vision with schools and universities and are organising, among others, a “FinTech Recruits” event to enable students to jumpstart their careers in FinTech & Financial services innovation.

The road to resilience is a combination of factors leading to reducing the impact of a crisis on companies. It helps them to anticipate, detect opportunities, and thrive in new circumstances. In an ever-changing environment, the difference between businesses freezing, failing while others innovate, advance, is resilience but the journey just started and the results will depend on each and every individual on how they engage themselves in it.