Ananda Kautz, Head of Innovation, Payments & Digital Banking at the Association of Banks and Bankers, Luxembourg (ABBL) discusses how digitalization can enhance the competitiveness and sustainability of banking in Luxembourg and how ABBL is helping members address new challenges. 

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Can you describe the ABBL's work on digitalization and payments in a few words?  

 

Representing the Luxembourg banking sector, one of the ABBL’s priorities has been digitalization and payments. We have established a Digital Strategy Committee, composed of 40 financial institutions, to provide a platform for discussions and to foster digitalization initiatives among members. We see digitalization as an opportunity to enhance competitiveness and sustainability while also ensuring that risks associated with digitalization are effectively managed. Measures Luxembourg banks are taking to accelerate digitization include setting up an electronic signatures framework and other measures to improve security like biometric authentication. Banks are responding to customers' needs by deploying new communication to onboard new customers remotely, providing mobile payments services, and instant payment solutions. 

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" When starting a digitalization project, it’s key to think from the start about data security, data interoperability and data analytics."

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What are the challenges and opportunities you see in the field of digitalization and payments?  

 

Banks need to balance the benefits of digitalization, such as increased efficiency and improved customer experience, with the challenges and risks associated with implementing new technologies. With the growing frequency, reach, and sophistication of cyber-attacks, increased digitalization comes with the need for enhanced security to preserve trust and consumer confidence. In support of digital transformation, investing in the acquisition and retention of talent is essential, particularly the skills of data scientists, software developers, and cybersecurity experts. Integration with third-party platforms brings new opportunities and challenges: Banks have the opportunity to mutualize some activities to achieve economies of scale, improve time to market, reduce costs, and make efficiency gains. 

 

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How is the ABBL adapting to these challenges? 

 

ABBL facilitates digital knowledge sharing among industry players by running programs among its members, FinTechs, and key national stakeholders. We aim to promote collaboration and innovation to contribute to making Luxembourg’s financial services sector more diverse, prosperous, and resilient. We have a dedicated team of advisors supporting members in their digitalization, innovation, and payments initiatives. ABBL is also engaged with regulators to ensure a supportive regulatory environment for digital implementation and addressing emerging challenges. We support the development of standards and guidelines in payments and the use of digital technologies including projects aimed at promoting digital literacy and skills development among its members and their customers. This includes training programs and workshops on topics such as cybersecurity, data protection, and digital customer experience.