THE LHOFT: DRIVING COLLABORATION Interview with Nasir Zubairi, ceo of the lhoft

The LHoFT – Luxembourg House of Financial Technology – is Luxembourg’s dedicated FinTech platform, where finance and technology interact to drive innovation and solutions to shape the future of financial services. Its CEO, Nasir Zubairi, named one of the “40 innovators shaping the Future of Financial Services” in 2014 by the Financial News/Wall Street Journal, lays out in LEO MAG his vision for the LHoFT and discusses Luxembourg’s position as a FinTech hub.

The LHoFT has now officially started. What will be your priority during the LHoFT’s first operational year?

There is a lot to do, and expectations are high, but we have already achieved some key goals. Firstly, to incorporate the LHoFT foundation, and to build the operational backbone and board of governors. Secondly, to bring together the right team that will drive our action plan and excel in executing the LHoFT’s strategy. Thirdly, to set up the LHoFT hub in Kirchberg where actors from the FinTech domestic and international ecosystem will meet to engage, learn, ideate and create. Finally, we have met with our partners and other stakeholders in the community to understand their needs and drivers. We now have a solid foundation from which to move forward and achieve our goals.

© Mike Zenari

There are a lot of similar agencies internationally. How does the LHoFT differ from other institutions like Level 39 in London or the Floor in Tel Aviv?

Our differentiators are quite clear. We are a joint public and private sector initiative. We have 11 (eventually 13) leading private sector institutions as partners and collaborators. The Luxembourg government is the driving force behind the LHoFT, and is a major contributor to our budget and governance – Pierre Gramegna, Minister of Finance sits on our board, alongside representatives from the Ministry of Economy, Ministry of State and other partners. The LHoFT is a not-for-profit foundation and not a real estate or service business driven by profit – our incentives are aligned with those of Luxembourg and its financial services sector. Our focus on driving solutions for the financial services community is key to our strategy and is a unique proposition.

The LHoFT is a not-for-profit foundation and not a real estate or service business driven by profit – our incentives are aligned with those of Luxembourg and its financial services sector.

What about your team? How will a typical day look like for you?

Our team reflects the international nature of Luxembourg’s incredibly diverse and multicultural community. We are proud to have a gender balance in an industrial cross (tech and finance) usually dominated by men. I have looked to bring together people that I believe have the right mix of strategic know-how, financial services experience and, most importantly, an ability to execute. They are highly motivated and driven to make Luxembourg an important FinTech centre. As for a typical day – there isn’t one at the moment. Very fast, very busy, focusing on getting some key tactical things done. We have been waiting for the final member of the management team to join us in order to sit down for a strategic planning session; it is critically important for the whole of our team to be involved in the strategy and planning process to ensure full commitment and the highest levels of motivation.

Our team reflects the international nature of Luxembourg’s incredibly diverse and multicultural community.

Luxembourg is committed to making FinTech the engine driving financial services business models. How will this objective be achieved?

Collaboration is essential for Luxembourg to meet its goals and it is the heart of the LHoFT’s strategy. The LHoFT’s focus is on three pillars: Ecosystem, Solutions and Knowledge. We will work to bring together and align the key stakeholders in the broad FinTech ecosystem, both domestic and international, to drive collaboration and facilitate innovation. We will work with our partners and others to identify pain points and then build, incentivise and lead consortiums (big and small) from across the ecosystem to provide the appropriate solutions. We will educate by understanding the needs of the ecosystem and delivering appropriately tailored knowledge through the right mediums and formats. We will raise international awareness of Luxembourg’s initiatives and achievements in financial technology to draw in new actors and opportunities. We will ally with the varied associations, initiatives and government departments to build a soft landing platform for FinTech firms setting up in Luxembourg.

© Mike Zenari

How will Brexit impact London’s FinTech hub? Will it speed up the arrival of start-ups in Luxembourg?

Brexit is a sad event for all in Europe. Luxembourg has always worked closely with London as a partner, and we hope this will not change in the future. However, a good business leader cannot risk the uncertainty of the known unknowns related to Brexit and is already looking at how to mitigate these risks, be they a large traditional financial institution or a startup. PPRO, a London based FinTech startup, announced that they will establish a European base in Luxembourg and they will certainly not be the last to consider Luxembourg as a channel for the European market now that London is unlikely to be the long-term solution. Likewise, startups from the US, Asia and Middle East, looking at European expansion for growth, are no longer considering London. One key factor in their decision-making will be language – firms from these locations are unlikely to speak French, German, Spanish or Dutch. They need English. Luxembourg’s trilingual capability in business and, very importantly, in dealing with the regulator including filing of license applications, is a huge advantage and draw. Couple this with Luxembourg’s friendly business environment, accessibility, talent pool, funding options such as The Luxembourg Future Fund, plethora of financial services firms and strong community engagement, and I am very certain we will see a growing number of startups moving to Luxembourg in the coming years.

Luxembourg’s trilingual capability in business and, very importantly, in dealing with the regulator including filing of license applications, is a huge advantage and draw.

Do you think traditional banks successfully innovate to deal with the rise of FinTech banking disruptors?

The future of financial services is not about disruption; it is about evolution and collaboration. Traditional banks have valuable assets and competencies. Notably, traditional institutions have customer trust and incredible economy of scales. Banks have developed specific skills, knowledge and experience that cannot be acquired overnight. Startups, on the other hand, are intrinsically creative and agile in their approach, more empathic of the customer and able to quickly adapt. Startups proceed iteratively, through experimentation and hypothesis testing, to deliver the best products and services.

The future of financial services is not about disruption; it is about evolution and collaboration.

In my view, the optimal business strategy for both banks and startups is to collaborate and leverage each other’s strengths - this is the win-win scenario, especially for the customer. The LHoFT has a key role in driving this collaboration. Our mission is to bring all the different stakeholders to the table, to foster the dialogue, to build the ecosystem and to identify market and industry problems and opportunities for which we can build cooperative teams from across the worlds of tech, education, startups and traditional finance to innovate solutions and drive the Luxembourg industry forward.

© Mike Zenari

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Mike Zenari

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