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The LHoFT Foundation is the Luxembourg national platform and the central hub for Fintech companies. Can you provide an overview of your association and its main objectives? What inspired the creation of this association, and how has it evolved over the years?
NASIR: Our primary mission is to ensure the continued competitiveness of Luxembourg’s financial services market by leveraging digitalisation as a key enabler. The Foundation focuses on enhancing knowledge and skills, building bridges between various stakeholders, both internationally and within Luxembourg, and driving policy and national projects that can help reduce costs or create new revenue opportunities.
Main Objectives:
- Enhance Knowledge and Skills: We organise a variety of educational programmes, workshops, and events designed to foster a deeper understanding of financial technology among industry professionals.
- Build Bridges: By facilitating collaboration between financial institutions, Fintech startups, regulatory bodies, and academic institutions, we aim to create a cohesive ecosystem that supports innovation.
- Drive Policy and National Projects: Our involvement in policy advocacy and national projects is crucial for creating an environment conducive to Fintech growth. We work closely with government bodies to influence regulations that support the sector.
Inspiration and Evolution:
The inspiration behind the creation of the LHoFT Foundation stemmed from the need to position Luxembourg as a leading financial centre in the digital age. Recognising the transformative potential of Fintech, we sought to create an ecosystem that not only attracts innovative firms from around the world but also supports home-grown talent and solutions.
Since its inception, the LHoFT Foundation has evolved significantly. We have built a rich and diverse Fintech ecosystem that continues to attract more firms from abroad. Our initiatives have expanded in scope and scale, reflecting the dynamic nature of the industry. Today, the LHoFT Foundation is not only a hub for innovation but also a thought leader in the global Fintech community. We actively participate in international conferences, sit on advisory boards, and engage in multilateral discussions, ensuring Luxembourg’s voice is heard on the global stage.
How would you describe the current state of the Fintech ecosystem in Luxembourg? What are the major challenges that Fintech companies face in Luxembourg, and how is your association addressing them?
NASIR: The Fintech ecosystem in Luxembourg is strong, vibrant, and continues to evolve. Luxembourg has embraced innovation and digital transformation, creating a supportive environment for Fintech companies. The ecosystem has developed a great synergy between traditional financial institutions, emerging startups, regulatory bodies, and academic institutions. This collaborative spirit has fostered an atmosphere where innovation can thrive, and new financial technologies can be developed and implemented effectively. Leveraging Luxembourg’s strengths, notably access to decision-makers and expertise in international business, has naturally drawn a significant cohort of B2B Fintech businesses to Luxembourg, particularly in Regtech, Fundtech, and Tokenisation. Luxembourg is also the leading centre in the EU for payment firms, hosting giants like Paypal, Amazon Payments, and Rakuten, along with newer champions like Satispay.
Fintech companies, and European startups more broadly, do face challenges. Access to funding is a bane for all startups, and Fintech funding has globally declined over the past few years. At LHoFT, we bridge this gap by connecting Fintech companies with our diverse and trusted network of investors. We enable startups to showcase their potential and attract investment from venture capitalists and angel investors.
Talent acquisition and retention post-COVID is becoming an issue across Western Europe. The competitive nature of the Fintech industry means that attracting skilled professionals can be challenging. We collaborate with educational institutions and universities across multiple countries to promote Fintech-related courses and training programs, as well as the career opportunities in Fintech, ensuring a steady pipeline of qualified professionals. Additionally, our initiatives, including hackathons and workshops, help in identifying and nurturing local talent. We also host a large recruitment forum each year, Fintech Recruits (in November this year), attracting over a thousand eager job seekers from across Europe.
“The inspiration behind the creation of the LHoFT Foundation stemmed from the need to position Luxembourg as a leading financial centre in the digital age. Recognising the transformative potential of Fintech, we sought to create an ecosystem that not only attracts innovative firms from around the world but also supports home-grown talent and solutions.”
What strategies does your association employ to attract foreign Fintech companies to Luxembourg? Can you share some success stories of foreign Fintech companies that have established a presence in Luxembourg with your assistance?
ALEX: Our main objective is not to attract foreign companies to Luxembourg per se. Our goal is to identify the most relevant Fintech solutions, wherever they are based in the world, and connect them with the Luxembourg Finance Industry. If those Fintechs decide to open an office in Luxembourg to be closer to their clients, for instance, we assist them by offering incubation and acceleration. The LHoFT serves as a facilitator for Fintech, ensuring they meet and connect with the right partners, clients, investors, public institutions, universities, and talent pools.
In addition to proximity to the finance industry, Fintechs might choose Luxembourg for three reasons. First, its location at the heart of Western Europe provides quick access to markets like France, Germany, Belgium, and the Netherlands. Beyond geography, Luxembourg offers financial expertise, business acumen, and a multilingual population that speaks most European languages. Second, there’s the close proximity to regulators and decision-makers. Being a small country, it’s easy to interact with the regulator, the political elite, and industry leaders. Third, the ease of conducting business in English is a significant advantage, with license applications and contracts typically redacted in English.
For these reasons, we have state-of-the-art Fintechs from all over the world choosing Luxembourg as their main European hub, including Paypal, Alipay, Satispay, Fundcraft, HQLAx, Bitflyer, Bitstamp, and many others. From Spain, we’ve had the pleasure of hosting Fintechs like Wixdom, B4Finance, and Hokus Platform, among others.
“Our goal is to identify the most relevant fintech solutions, wherever they are based in the World, and connect them with the Luxembourg Finance Industry. If those fintechs decide to open an office in Luxembourg, in order to be closer to their clients for instance, then we assist them by offering incubation and acceleration.”
Can you tell us more about the upcoming event in October organized in collaboration with the Official Spanish Chamber of Commerce in Belgium and Luxembourg? How do you envision this event strengthening the connections between the Luxembourg and Spanish Fintech ecosystems?
ALEX: The goal of this event is to learn about each other’s ecosystems, find synergies and way of collaboration between fintechs and financial institutions. Luxembourg is one of the main financial centers in Europe and it has become an epicenter for fintechs. On the other hand, Spain hasn’t only great technology companies, it also has very innovative banks that are investing heavily in fintechs. We have a lot to learn from each other.
“Luxembourg has the leading framework for tokenization in Europe, leading to the first tokenized bond issues from the EIB and World Bank being issued in the Grand-Duchy.”
Finally, what trends do you see shaping the future of Fintech in Luxembourg and globally?
NASIR: The future of Fintech, both in Luxembourg and globally, is being driven by several key trends that promise to reshape the financial landscape:
- Digital Transformation continues to accelerate, with financial institutions adopting new technologies to enhance customer experiences and operational efficiencies.
- Blockchain and Distributed Ledger Technologies are gaining ground. In Luxembourg, there are significant advancements in asset tokenization. Luxembourg has the leading framework for tokenization in Europe, and the first tokenized bond issues from the EIB and World Bank were issued here. We anticipate considerable growth in this sector, including fund tokenization.
- Artificial Intelligence (AI) and Machine Learning (ML) are poised to be game-changers. However, financial institutions are still generally slow to embrace these technologies. Those that fail to adopt AI risk falling behind, as it promises cost savings, productivity boosts, and new business opportunities, such as improved fraud detection and personalized financial advice.
- Sustainability and Green Finance are becoming central to the Fintech agenda. There’s a growing emphasis on solutions that support environmentally responsible investing, and Luxembourg is well-positioned to lead in this space with its commitment to sustainability.
- Cybersecurity remains a top priority. As the sector becomes more digital and technologies like AI and quantum computing take hold, we must ensure that security measures evolve at pace.
Naisir Zubairi
CEO
LHoFT
“Spent nearly half my career in front office capital markets, living and working in London, New York, Tokyo and Singapore. I was the Director of Hight Frequency Trading at RBS London, quitting just before the bank fell apart, to go back to study at London Business School. It was after this and a brief surjone to Bali, Indonesia, that the entrepreneurial bug got me and started setting up my own companies in the realm of Fintech, London then in Berlin. I came to Lux to build a bank, having launched Solaris Bank in Berlin, but was drawn to set-up and run the LHoFT by the Government.”
Alex Panican
Deputy CEO
LHoFT
“Prior to my role as Deputy CEO at the LHoFT, I had the opportunity to wear various hats: co-founder of an AI startup in retail, strategy consultant for some of largest groups in Canada, a marketing director for a US publisher and even as a banker for a short period in Luxembourg.
Beside my professional activities, I am also a professor in Strategy and Digital Marketing, teaching professionals about competitive advantages and how to thrive by using the latest technological tools.”