The digital revolution is a cross-disciplinary phenomenon – there is no sector of our economy that is not affected by it. You only have to think, for example, of the emergence of self-driving cars and lorries, which are about to appear in the transport and logistics sector. Historically, the economic success of the Grand Duchy has always been linked to its propensity to adopt new technologies before everyone else. FinTech will have a profound effect on banking, the work of bankers, and the way banking is ‘consumed’. It will affect all the links in the value chain. And the phenomenon is not limited to banking – it includes all the pillars of our financial centre, including the funds industry, insurance, and service providers. Start-ups are both the competitors of established players and their allies, helping them become more efficient and more competitive. So FinTech represents both a natural evolution of the established models and a challenge to them. Already in the past the financial centre has demonstrated its ability to adapt to new circumstances. Some people predicted its decline when the automatic exchange of information was introduced, but it became even stronger. I am convinced that it will be the same for the digitisation of financial services.

With the presence of 143 banks and thousands of investment funds and professionals in the financial sector, the Grand Duchy represents a life-size laboratory and a market of a critical size for FinTech stakeholders. Our regulator, the CSSF, is both meticulous and pragmatic. It is perfectly aware of the constraints start-ups face, and it supports innovation. For example, it was the first regulator in Europe to define the status of virtual money, giving businesses the legal certainty they need to be able to develop their activities. With LHoFT, we have now set up a platform which will make a tangible contribution to further reinforcing the Grand Duchy’s attractiveness, particularly for start-ups. I am convinced that it will create a new dynamic and power of attraction. Nor should we forget all the Grand Duchy’s other advantages, including its openness, its dynamism, and its reliability. Our country has everything going for it to attract innovative businesses and their talent from all over the world.

There are plenty. The most recent is probably the collaboration between LuxTrust and SnapSwap, which have joined forces in ‘Gloneta’, an innovative mobile payment app.
LuxTrust, the supplier and leader in the field of digital identity, strong authentication and trust services, is totally Luxembourgish, while SnapSwap is a start-up with American roots that is established in the Grand Duchy. Indeed I had the pleasure of signing their licence to establish electronic money barely a year ago. Together, the two companies are developing an innovative service based on both the blockchain and digital identity. And in fact I think it is the blockchain that will be behind the next remarkable developments.

Since 2014, the Government has been investing record amounts of money in raising the level of the country’s infrastructures and modernising the country. Digitisation is an integral part of these efforts, which are essential. All over the world, the adoption of digital technologies is soaring. There will be between 20 and 50 billion devices connected to the Internet by 2021. The Grand Duchy must not be a passive spectator of these developments; it must play an active role in them, even to the point of being in the vanguard. ‘Digital first’ should be more than just a slogan – it should be a genuine reflex. The repositories of wealth in the past were the (financial) banks. The repositories of the country’s wealth in the future will also be banks - databanks. Happily, we have been able to develop both in the Grand Duchy!

As digital technology irrigates the world economy, data becomes increasingly important. It becomes essential to innovation, commerce, global value chains, health, education, public services, and even social interaction. Data can help us improve governance and the services we provide for the public. One of the challenges in the future will be to achieve the right balance between data protection and flexibility, to allow processing for legitimate purposes. It is the duty of politicians to ensure that the remaining digital gap is reduced, allowing everyone digital access, so that everyone can benefit from the advantages of a connected world.