All of them qualify as fintech hubs in their own right. Rewind a mere five years, however, and the Grand Duchy would not have made the list.<\/p>\n
Thanks to a perfect storm of resources, financial-sector support and a push from the government, progress has happened at a blistering pace. Today, the country\u2019s buzzing startup scene is firmly on the map.<\/p>\n
\u201cNow Luxembourg is trying to make up for lost time. We have all of the ingredients: the tools are here, the right state of mind, the will and the actors,\u201d said Nazim Faid, Lawyer, Kaufhold & R\u00e9veillaud, Avocats, whose fintech clients give him a window into the growing scene.<\/p>\n
The strong financial sector that set the stage for fintech success, ironically, also played a part in the country\u2019s late start.<\/p>\n
\u201cTraditional financial actors had the logical reaction to fight against this disruptive innovation. They were apprehensive and didn\u2019t fully trust fintech. The second reaction was to realize you can\u2019t fight, you have to adapt. They both need each other,\u201d he added.<\/p>\n
The financial technology revolution arrived at a time when banking services across the globe were steadily homogenizing, and standing out became a constant battle. Faid believes that fintech will prove to be one of the sector\u2019s most crucial differentiators: \u201cIf they don\u2019t stay on top of it, they\u2019ll fall behind. Today, all banks provide pretty much the same services. What most differentiates them is the quality of their customer services.\u201d<\/p>\n
Fintech is not something you can fight against. You either go with it or you get left behind.<\/p><\/blockquote>\n
By partnering with startups, banks achieve innovative solutions that ultimately lead to better service and happier customers. On the other hand, startups gain financing, representation and access to a huge client database, a goldmine in an already saturated market.<\/p>\n
Everyone wins: the financial institution, the fintech startup and the customer.<\/p>\n
Fintech is the natural result of a global technology revolution finally spilling over into an old-fashioned sector, but what does the term represent exactly? \u201cIt sounds so vague and obscure, but fintech is improving your daily life. It has an impact on both the front and back offices of banking services. It\u2019s the banking app on your phone, or the reason transfer orders are automated and executed so fast,\u201d Faid noted.<\/p>\n
Despite initial concerns with data security and risk management, the world of traditional finance now recognizes that innovation is synonymous with survival. Internal innovation branches are becoming commonplace, helping organizations secure their futures.<\/p>\n
Paris and Berlin\u2019s successful transformations into startup hotspots created blueprints that paved the way for Luxembourg to follow suit \u2014 smoothly pivoting from one industry to another was already a trademark of the country\u2019s long-term prosperity.<\/p>\n
Credit for achieving the necessary momentum goes to the government. The CSSF \u2014 Luxembourg\u2019s regulatory body \u2014 and the Ministry of the Economy boldly support the vision of a fintech future and have sent representatives around the world from China to California in order to promote this rising hub.<\/p>\n
\u201cFintech is not something you can fight against. You either go with it or you get left behind. Banks can\u2019t survive without it, so I believe Luxembourg\u2019s future depends on it,\u201d Faid explained.<\/p>\n
Specifically, success hinges on attracting talent \u2014 convincing entrepreneurs to choose Luxembourg over Paris, for example \u2014 and financing is the key. The country\u2019s tax and legal framework eases the journey for young companies as they launch and grow, but this demographic\u2019s number one priority remains access to financing, a fact that has not gone unnoticed.<\/p>\n
Take the \u20ac20 million Digital Tech Fund, which exists to invest in technology startups. Private accelerators and incubators, such as nyuko and lux future lab, offer entrepreneurs and young companies valuable networks, tools and resources. Pitching events and angel investor conferences peppered 2016\u2019s local calendar.<\/p>\n
\u201cFor my fintech clients, financing is always the biggest hurdle, although it\u2019s getting better and better, but there\u2019s still room for improvement. That will progress as existing actors trust the fintech industry more and are willing to finance those projects,\u201d Faid said.<\/p>\n
A lot is happening at all levels, especially compared to three or four years ago.<\/p><\/blockquote>\n
Through initiatives such as the Luxembourg House of Financial Technology, Luxinnovation and the Fintech Zone we see how both public and private entities are helping build a community of entrepreneurs to support one another and foster the right culture. As Silicon Valley and other hubs demonstrate, innovation is contagious and community is instrumental to success.<\/p>\n
According to Faid, Luxembourg\u2019s productivity on the fintech front is noteworthy: \u201cPeople don\u2019t talk about it enough, but if you look around you realize that a lot is happening at all levels, especially compared to three or four years ago.\u201d<\/p>\n
Another selling point is the CSSF itself, unique in its open solidarity with startups and willingness to help them succeed. It is no coincidence that Europe\u2019s first bitcoin license was issued here. The nation\u2019s small size versus its heavy arsenal of human resources ensures that the regulatory needs of even complex entities are quickly met. Licenses that take months in other countries, can take days here.<\/p>\n
Efforts are paying off. Between 2012 and 2015 the number of e-money and e-payment institutions in the country tripled.<\/p>\n
The recently introduced Simplified Sarl, a welcome mat for new businesses, allows one person with as little as one euro to create a company in one day, aka a 1-1-1 company. Further modernizations to Luxembourg company law improved corporate legal conditions by clarifying grey areas and boosting security, while maintaining flexibility.<\/p>\n
Luxembourg\u2019s start may have been late, but it definitely was not slow. Most importantly, the economies main influencers, from ministries to legislators to banks have joined forces to drive financial technology forward. As long as the client is important, innovation is too.<\/p>\n
\u201cIf it\u2019s good for customers, it\u2019s good for everyone, so assuming things keep going like this, Luxembourg fintech has a bright future,\u201d Faid concluded.<\/p>\n
For more information on the financial technology industry, setting up a company or general inquiries, please contact:<\/p>\n","protected":false},"excerpt":{"rendered":"
Interview with Lawyer Nazim Faid on the meteoric rise of the local startup scene & how it is defining tomorrow\u2019s financial industry What do Berlin, Hong Kong, San Francisco and Luxembourg have in common? All of them qualify as fintech hubs in their own right. Rewind a mere five years, however, and the Grand Duchy … <\/p>\n
Continue reading “Luxembourg\u2019s Fintech Future”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":18581,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[259],"tags":[266,246,247,267],"class_list":["post-18348","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insight-en","tag-fintech-en","tag-law-en","tag-luxembourg-en","tag-startup-services-en","entry"],"acf":[],"yoast_head":"\nLuxembourg\u2019s Fintech Future - Kaufhold et Reveillaud Avocats<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.kaufholdreveillaud.lu\/en\/luxembourgs-fintech-future\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Luxembourg\u2019s Fintech Future - Kaufhold et Reveillaud Avocats\" \/>\n<meta property=\"og:description\" content=\"Interview with Lawyer Nazim Faid on the meteoric rise of the local startup scene & how it is defining tomorrow\u2019s financial industry What do Berlin, Hong Kong, San Francisco and Luxembourg have in common? 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