By the end of this decade, banks, fintechs and emerging technologies will have irrevocably changed Luxembourg’s financial industry. Raoul Mulheims, CEO of Finologee, shares his take on what this future might look like.
You serve more than 100 banks and institutions by providing them with a wide range of digital services. Which ones do you expect to be most in-demand in the coming decade?
When we first decided to create Finologee, it was out of a desire to change and improve the financial industry. As a regulated company, we were faced with the same constraints as other licensed regulated institutions such as banks, fund industries, insurance companies, etc. These fell into two broad categories. First, there was a clear need for solutions easing the pain of regulated players to become and remain compliant, so anything we now call regtech. The second challenge was related to payments, more specifically the connectivity between regulated entities, institutional players and corporates. So these are the two areas where I believe there is and remains a lot of potential for the future. They are not the only ones, but for us, they are the most promising ones.
What should Luxembourg focus on to continue staying competitive in the future?
I think there is one keyword here: digitisation of processes. The Luxembourg financial industry is a very peculiar one when thinking about its fintech potential. Due to its size and fund expertise, its focus is less on building consumer-facing solutions than in other countries. While many Luxembourg-based fintechs and banks are doing quite well on that front, the main focus should really be on digitising existing processes and improving the back-end of things. If we manage to do that for all the players in the ecosystem, then we will certainly retain our competitive edge over other financial players.
“[…] the main focus should really be on digitising existing processes and improving the back-end of things.”
Raoul Mulheims, Co-founder and CEO of Finologee
A Deloitte report on the future of banking claims that banks will have to integrate emerging technologies such as AI and blockchain to stay relevant in the future. What’s your opinion on this?
I don’t think that these technologies are an end in themselves. Of course, you have to stay ahead of technology in order to remain efficient but only if the technology itself actually improves your product. Looking at blockchain for example, right now, as a processing technology it is highly inefficient when it comes to speed and volumes.
So when talking about the idea that banks need to provide payment tools in crypto I always wonder what for? Because people who know a little bit about this topic know that crypto for daily payments really doesn’t make much sense. This is not to say that there aren’t any other applications for it, but generally, I am a bit more conservative.
What do you think the future of banking will look like?
In my opinion, the future will revolve around three pillars, the first one being payments. From the consumer’s perspective at least, I believe that payments will become completely embedded. It will be like in the Amazon shops in London which you can just walk out of because you’re paying a subscription.
The second pillar is financing, which I believe remains pretty traditional for consumers. Of course, there will be some digital procedures which will help, for instance, to evaluate the value of your house and help determine which loans you can get. However, overall this will remain a pretty complex procedure that cannot be fully automated.
The last pillar is investing and savings. While savings have disappeared to some extent, investing has become a lot easier and more accessible. However, it still revolves around knowledge and experience and as long as this stays the same, I don’t see digitalisation having a negative impact on it. What remains to be seen is if better investment products and more accessibility will lower the average yields.
What do you hope to have achieved with Finologee by 2030?
In my wildest, we would have been able to establish some of our products as the market standard in Luxembourg. If we will have been able to set that standard and have provided our clients with the most efficient and highest performing products, then I’ll be happy as an entrepreneur and CEO.
This article was first published in the Silicon Luxembourg magazine. Read the full digital version of the magazine on our website, here. You can also choose to receive a hard copy at the office or at home. Subscribe now.
