The financial centre represents a significant potential client base for FinTech companies setting up in Luxembourg. There are nearly 150 banks, 332 insurance and reinsurance companies, financial infrastructure companies such as the stock exchange and central securities depositories, as well as a world leading funds industry. Digital payment services and virtual currency firms are also active.
The majority of FinTech companies are established firms of foreign origin that have set up in Luxembourg.
They have come to benefit from the close proximity to clients and from the available talent pools (both in finance and technology) they need to develop their businesses.
At present, there are around 150 FinTech companies in Luxembourg, with roughly half of them providing IT infrastructure or IT services. The other half are software- or technology-based business service providers.
Outsourcing is actively supported by the Government, with specific legislation applying to the relationship between service providers and financial institutions. This ensures that service providers are regulated to the same extent as financial institutions themselves, particularly regarding operational risks and confidentiality breaches. This enables financial institutions to concentrate on their core business as they entrust auxiliary, yet business-critical, activities to specialised service providers.
The “Professional of the Financial Sector (PFS)” status is granted to service providers that deliver operational services to financial institutions. To receive this from the regulator, they must ensure data protection and the high level of confidentiality required by the financial sector, plus they must guarantee the physical and digital separation of all data originating from customers from the financial sector.
All major IT companies located in Luxembourg carry this label, including international groups such as Atos Origin, CSC, Dimension Data, Fujitsu, Hewlett-Packard, IBM, Tata Consulting, Verizon, to name just a few.
As Luxembourg’s expertise in finance has grown, an extraordinary pool of data handling resources and skills has developed. This ensures the high quality of services and professional confidentiality required in this sector, and guarantees secure and confidential client information processing.