Interview by Kate Goldfinch
How do you evaluate threats of hard or soft Brexit on its influence on European and British fintech?
Unfortunately, we see little overall positive upside from any form of Brexit as it creates disruption and uncertainty in the market. When the opportunity for Fintech is for the EU to become more and more
harmonious, particularly in regulation, to ease access to and business with firms and consumers across the bloc, Brexit takes us in the opposite direction. With the focus on how the future relationship
between the UK and the EU will shape up and the uncertainty around cross-border business, we have created hurdles, be it hopefully small ones, for the European Economic Zone and for firms, Fintech
firms, within it, to grow at speed and compete with the tech behemoths of the US and China. I hope that after 29th March the EU can start to move forward faster in bringing unity through policy and governance, to enable Fintech to deliver on its promise within the zone. This will be significantly less likely in the short-term should a hard Brexit occur with all the upheaval it will bring. Clearly, no scenario is thus really a positive for British or broader, European Fintech.
How could LHoFT use a hard Brexit deal to its benefit?
There is no “use” of Brexit to be made. It is a sad and disappointing event that has repercussions that
need to be managed. Luxembourg has a long and trusted relationship with the City of London and it’s
financial services industry and we hope this will continue, no matter what the outcome. Obviously, this
applies to all sectors, including Fintech. Luxembourg, as the largest continental european financial
centre, has always been a partner for firms in the UK needing an EU base, and we stand ready to
support those fintech firms that need help. The Grand-Duchy is a strategic EU location with easy
access to key locations such as Paris, London, Zürich, Amsterdam, Frankfurt and Brussels. Given the
capabilities of the centre, there are clear benefits for B2B Fintech firms with solutions targeting fund
management, insurance and private banking. There is also tremendous opportunity here for firms
specialized in Data Science, AI and Regtech. At the LHoFT, we have helped more than 170 startups
wanting to set-up and access Luxembourg’s financial centre and the broader EU market.
Luxembourgs’ rich language capability, with 3.9 languages per person on average, and complete
fluency in English, be it in business, in regulation and in contract law, makes it easy for anglophile
firms to feel at home in the centre.
Do you expect more startups from the UK to switch to Luxembourg?
Nobody is switching locations. Firms are simply setting up subsidiaries in Luxembourg and some
elsewhere, to ensure they can service an EU client base. At the LHoFT, we are committed to help
make their set up as easy as possible. We work closely with various local and international industry
stakeholders, associations and government departments in order to assist the best Fintech
businesses do business and grow in Luxembourg, providing a soft-landing platform for access to the
EU market. We work with each startup individually to cater for their needs. We help them with all sorts
of challenges be it contact with the regulator, providing offices facilities, legal advice, hiring. Etc. We
ensure they are connected to the right people to build their business in the EU.