“Our regulator was the first to consider virtual currencies as ‘money’”: Nicolas Mackel, Luxembourg for Finance
Luxembourg’s prominent financial services sector is adapting to seize new opportunities like fintech, while preserving its unique skill set and personalized service, says Nicolas Mackel, CEO of Luxembourg for Finance.
How does Luxembourg’s financial services strength distinguish it in Europe?
Although Luxembourg is a small country with no domestic market, it hosts assets under management of €3.97 billion. Our massive weight owes to a pan-European investment fund industry, from which we can also export investment funds to 70 global jurisdictions. It is a well-regulated product, and Luxembourg has a AAA rating. We specialize in the fund industry, wealth management, insurance, and capital markets. We also host 141 international banks, some of them active in the fund industry or corporate finance. We host about 65 private banks, and major private insurance companies selling life insurance as a wealth management tool. Our stock exchange is a global leader, listing 36,000 securities.
Why do many US firms see Luxembourg as an ideal hub for EMEA business?
Luxembourg is a platform from where US companies can tap into other European markets. Our multinational character, political, economic and labor stability are advantages, and we’re open to new phenomena. Our regulator was the first to consider virtual currencies as ‘money.’ When it came here, PayPal was only a start-up disrupting business; still, it got a banking license. So we’re open to ideas.
How are you enhancing the country’s attractiveness?
Luxembourg is perceived as a small country, and a bit dull. But while we do have only about 590,000 inhabitants, our talent pool extends to a population of 4 million around us, with many universities in that range. Many people come on a two-year term but never leave, because they love life here. You can work in Luxembourg City, the world’s safest capital, while living near the forest, and commuting 30 minutes between both. We are on par with Frankfurt or Dublin. We have an excellent philharmonic, great restaurants, and are a short trip from many capitals.
How does the country attract new talent and grow local skills for the sector?
New infrastructure is improving mobility and housing. And in just 15 years, Luxembourg University has climbed the international rankings, comprising one talent source. But we have multiple talents, including international schools leading to the international or French baccalaureate. The Government has developed a strong English curriculum, leading to the IB in English, for free. This is important for expats. Public schools teach in English, with international curriculum.
What’s in store for fintech, given more blockchain usage in fund transfers?
Several European cities hope to be the fintech start-up of the world. This is not our objective. As a world-class financial center with many global players, we want to support this industry and help them remain leaders in their fields through this century. Our strategic fintech objective is to create an environment that enables us to remain leaders in financial services once they go digital. The blockchain has the potential to disrupt the way things are done. In the fund industry, for example, many processes are still done by fax. Blockchain will achieve the same things more efficiently. The Luxembourg House of Financial Technology (LHoFT) is our first start-up support system. Not only a co-working space, it is a platform for the whole fintech community to find solutions for the financial industry’s transition.
How is Luxembourg promoting fintech start-up creation and development?
The Government’s digital strategy includes fintech, and its Luxembourg Future Fund previously created the Luxembourg Technopole, the first start-up support system. Run by the Ministry of Economy, this project is very conducive to start-up creation. Private incubators exist too, like BGL BNP’s Luxembourg Future Lab, and Newco, a private non-profit incubator. In January we launched a new house of start-ups where we will put LHoFT. This will be massive for start-ups.