Seeking stability and technical expertise
Faced with these diverse concerns, it is striking how the countries which were already attractive due to their professional know-how (banking, finance, insurance...) decided to become fully equipped, value adding ecosystems by hosting systems, applications and platforms. Luxembourg has undeniably taken this route, understanding long ago the importance of major investment. The result of this strategy is that this small country has become a leading player on the European stage.
In addition to the geographic location of the country at the heart of Europe, the Grand Duchy is at the crossroads of several highspeed digital highways. This extensive network infrastructure offers very low latency for connections between different countries, and this is a further essential advantage in this sector. These characteristics, in combination with highly efficient technological infrastructures, were the prerequisites for turning Luxembourg into the ideal hub for European FinTechs. Alongside this, we must add the high level of collaboration between players in this sector. Working together helps to make large-scale projects easier to realise.
A powerful financial centre
Luxembourg offers additional strategic advantages for FinTechs thanks to its globally significant cross-border financial sector. The country is the world’s second biggest centre for investment funds, is a major wealth management player, is a specialist in crossborder insurance, and hosts many other niche sectors. Entrepreneurs therefore have access to a comprehensive local ecosystem of experts and infrastructure. This is a unique position for FinTech to enjoy, operating at the intersection of an experienced technology with the added know-how of a range of financial professionals. Financial businesses are regulated either by the CSSF (Commission de Surveillance du Secteur Financier) or the CAA (Insurance Commissariat) which both have reputations for rigour allied with a willingness to support business growth and innovation. Luxembourg thrives partly thanks to a reputation for a high level of regulatory compliance, part of which involves meeting rigorous international standards related to client data confidentiality.
Thanks to this strict, business-friendly framework, any new idea has an excellent chance of success. CEOs regularly mention the ecosystem as being a key positive reason for deciding to move to Luxembourg. The result is a true land of opportunity that is well placed to attract numerous start-ups and European FinTech players over the long-term. The current wave of innovation will contribute to establishing the country as one of the most competitive and attractive places to do business for digital start-ups.