“We are developing LHoFT 2.0’s strategy to anticipate the next five years in relation to evolving challenges, opportunities and innovation such as crypto-currencies, tokenization, DeFi and blockchain technology”, says Nasir Zubairi, CEO of Luxembourg House of Financial Technology (LHoFT). Interview.
This year the LHoFT turns 5. What's your assessment?
The initiative has achieved a great deal, but there is still much more to be done – we are running a marathon, not a sprint. Five years marks a great milestone to look at strategy revisions for the next five years and LHoFT 2.0. We will mark our five years anniversary later this year with a celebration and launch the next phase of our strategy to drive digitalization for the Luxembourg financial services center.
“European Banking is the worst performing banking sector in the world; costs need to be addressed through automation”
What are the trends you identified in the FinTech world for 2022?
The major focus in Fintech is on crypto-currencies, tokenization, DeFi, and the underlying technology, blockchain. More mainstream, there is also a trend in "buy now, pay later" solutions. From the Luxembourg and broad EU perspective, the LHoFT concentrates on B2B and specifically on RegTech; solutions that reduce costs for incumbent institutions. European Banking is the worst performing banking sector in the world; In 2020, the average across performance across Western Europe was Return on Equity (RoE) 2.75%, Return on Assets (RoA) 0.16%, Return on Capital (RoC) 3.1% .Costs need to be addressed through automation in order to ensure the survival of many institutions and their continued competitiveness.
Could you share some Luxembourgish FinTech startups success stories ?
Certainly. Next Gate Tech, focusing on data harmonization within Asset Management, is growing incredibly fast and has attracted some impressively senior-level finance executives to their team. HQLAx continues to build and gain traction with its blockchain-based collateral mobility solution for the securities lending market. Tokeny and Stokr, both active in the tokenization arena, impress with the increasing number and scale of token offerings they are facilitating. Riverbank, a regulated credit institution providing debt solutions to businesses, has built a team of over 60 in Luxembourg, is well-funded, and is scaling quickly.