“We believe that you create value in the financial industry by building a long term relationship with your clients,” says Hreidar Mar Sigurdsson, CEO of Kaupthing Group, a private banking entity present in Luxembourg since 1998. Bearing this in mind, the company’s new financial product, Kaupthing Edge, seeks to create new relationships in a market the company hadn’t previously targeted: the general public. An internet-only service, Kaupthing Edge is divided into two different products: a savings account and a fixed term deposit account of six or twelve months, paying interest of 4.25% Annual Equivalent Rate (AER), 4.5% AER or 4.7%  AER respectively, guaranteed until January 1, 2009. To avail of these rates, clients must keep a minimum balance of 1,000 euros in their current account, or deposit a minimum sum of 5,000 euros.

Secure International Company, Secure Local Bank

Gudmundsson and Sigurdsson both stress the fact that Kaupthing Edge is an opportunity for the company to offer a truly local product to clients in any given market. Thus, interest rates and minimum requirements are tailored to each country in which Edge is present, and clients are required to hold a current account in their country. This is linked to the Edge savings account and, as a security feature, transactions into and out of the latter may only come from or go to one domestic current account. As a further safety precaution, Kaupthing Edge clients require not only a username and password, like most Internet services, but also to enter an additional code to access their account, which will be sent to them by text message each time they go to log in. Recognising the special situation in Luxembourg regarding cross-border workers, those who have an account in the Grand Duchy but an address in Germany, France or Belgium will also be eligible for the products. Moreover, call centre support for the on-line service will be based in Luxembourg and conducted through four languages, English, French, German and Luxembourgish. The website (www.kaupthing-edge.lu) is offered in the first three. Kaupthing are hopeful that the products will allow them to establish relationships with a new generation of clients and raise wider awareness of their brand.

Several Successful Launches

Edge has, according to Sigurdsson, been in the pipeline for two years, and in October last year successfully entered the market in Finland, Sweden and Norway. In January, the product was launched in Belgium and the United Kingdom while March saw its debut in Germany. This month, in addition to Luxembourg, it is starting up in Denmark and the Isle of Man. Thus far, the product has 100,000 customers and one billion euros in deposits across nine countries.

Kaupthing also used the opportunity, the tenth anniversary of their launch here in Luxembourg, to publicise a charity CD they have developed in aid of the Fondation du Grand-Duc Henri et de la Grande-Duchesse Maria Teresa. The CD, entitled “One Day” and performed by Thorunn Egilsdottir, is available from April 10 and costs 4.80 euros.