Luxembourg has long been the most striking example of an agile economy capable of anticipating, reacting and innovating swiftly in a global market whose changes come ever thicker and faster. Today a key focus for Luxembourg is financial technology, which draws on the country’s capacity for innovation while offering the established financial community partners to assist in reinventing itself for the digital age.
The latest step to strengthen the business infrastructure underpinning the development of fintech is the launch of the Luxembourg House of Financial Technology – LhoFT for short – a not-for-profit organisation dedicated to providing an incubator environment for fledgling fintech companies, and supported both by the Luxembourg government and leading members of the domestic and European financial and business communities.
According to LHoFT CEO Nasir Zubairi, Luxembourg is ideally placed to offer promising fintech businesses a platform to develop and expand as the increasingly shape the future of the financial industry. In an interview with Digital Luxembourg, he says: “Luxembourg is the best place right now for fintech, both as a business environment and as a technology ecosystem."
“As a leading eurozone financial services centre, Luxembourg is an EU hub and international centre for banking, capital markets and insurance; it is Europe’s largest fund management centre, second in the world only to the US. It also has a long track record of innovation, for which it is ranked among the top 10 countries in the world."
“That’s coupled with Luxembourg’s accessibility, both to Europe and to senior decision-makers in government and the financial industry, its talent pool, funding opportunities from organisations such as the Luxembourg Future Fund, Luxinnovation and the Digital Tech Fund, strong community engagement and public sector support.”
In a highly internationally-focused business area, Luxembourg’s multilingual capabilities are critical, Mr Zubairi says: “You can speak and apply to the regulator, do business and contract with partners and customers in English, French or German. This represents an ideal foundation for the development of an exciting and thriving fintech ecosystem.”
It also helps that the LHoFT’s partners represent a wide range of financial institutions and other players active in the development of innovative new businesses. They include local banks BGL BNP Paribas, BCEE and Société Générale Bank & Trust, other key members of the financial services infrastructure such as Deutsche Börse group member Clearstream, insurer Foyer Group, Six Payment Services; support service providers POST Luxembourg, telecoms group Telindus and financial software firm Temenos; and leading global consultancies Deloitte Digital, KPMG and PwC.
These organisations represent a powerful ready-made support network for the start-ups selected for assistance by LHoFT. In addition, Mr Zubairi says they can count on various associate partners, venture capital funds, education providers and government stakeholders for advice and help.
“This collaboration highlights the exceptional network, engagement and accessibility of Luxembourg’s ecosystem, ” he says. “Each of our partners has their own needs and objectives that include access to and connectivity with fintech start-ups to help create solutions and new opportunities for their business.”
As a veteran of the European fintech and start-up sector over the past seven years, Mr Zubairi is well placed to identify these advantages opportunities, as well as understanding the pitfalls that may await young businesses. “For start-ups, it is not as simple as just turning up and innovating, ” he says. That’s where LHoFT comes in – providing the support infrastructure to allow innovative the breathing space to develop their ideas.
“We act as the entry point for fintech firms and innovators into the Luxembourg ecosystem, providing them with a platform to make it as easy as possible to start doing business, ” Mr Zubairi says. “As a not-for-profit organisation, we subsidise the cost of working space, and provide broader services to help minimise operating costs and provide efficiencies for the firms that use our services.”
That includes making sure they are well informed from the outset about practical as well as business issues. The LHoFT welcome pack aims to save start-ups time (and money) by setting out critical information about sources of capital, establishing a business, human resources and administration and regulatory application processes, as well as tips and contacts regarding housing, schooling and the overall cost of living.
Says Mr Zubairi: “We provide direct connections to potential institutional partners as well as introductions to venture capital funds and angel investors, both in Luxembourg and internationally, as well as other local sources of funding.”
He argues a key ambition for LHoFT is to consolidate Luxembourg’s profile as a leading innovation centre for fintech, to ensure the country’s financial services sector is viewed globally as a hotbed of innovation, and that the jurisdiction stands out as a trailblazer in delivering services to fit the world of tomorrow.
“The world does not stop evolving, and neither will we”, he says. “Our aim to help ensure that Luxembourg’s position as a leading global financial services hub is ever more closely more and more intertwined with continuous technological innovation.”
