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.