PLACE FINANCIÈRE & MARCHÉS — Marchés financiers

Francesca Prym (UBS Fund Management Luxembourg)

“The Luxembourg financial industry has gained a leadership position in Europe”

Francesca Prym, CEO and Member of Board of Directors of UBS Fund Management. (Photo: DR)

Francesca Prym, CEO and Member of Board of Directors of UBS Fund Management. (Photo: DR)

As part of the 10×6 Luxembourg – Financial centre 2030 organised by the Paperjam + Delano Club on Tuesday 25 January, Francesca Prym, CEO and Member of Board of Directors of UBS Fund Management (Luxembourg), shares her perspective on the future of our financial centre.

The financial centre is one of the central strengths of the Grand Duchy. How is it doing today?

Francesca Prym. — “Luxembourg continues to attract financial institutions and investors from around the world thanks to its political, economic and social stability, accessibility, a skilled and multilingual international workforce, and an appropriate and reactive legal and regulatory environment. This stability is not only based on economic growth above the eurozone average, or the diversity of products on offer here, but also on the financial centre’s international nature, which remains one of its areas of excellence. With an investment fund distribution market covering more than 70 countries worldwide, Luxembourg plays a crucial role by attracting international investors to Europe. The Grand Duchy is also very proud of its highly diversified international financial ecosystem that has enabled the development of a high level of expertise in several fields, including sustainable  finance  and financial technology. It is also one of the few countries in the world with an AAA rating from every major ratings agency.

To guarantee the competitiveness and sustainability of the financial industry in Luxembourg, what do you think should be the main actions to be taken in 2022?

“The Luxembourg financial industry has gained, over the years, a leadership position in Europe thanks to its ‘investor-friendly ecosystem’, where the broad range of investment vehicles on offer is the result of an innovative combination of different legal forms, fund regimes and regulatory frameworks. Given the evolving environment, we believe that the fund industry will need to look at the future with an ABC approach: by being agile in navigating through the demand of the market with responsive and exhaustive proactivity; by delivering bespoke solutions to the next generation of investors, using technology to increase operational efficiency and developing new ideas; and by guaranteeing clarity when providing guidance to asset managers on how to efficiently implement the new regulations.

The development of blockchain, cryptocurrencies, NFTs… Threats or opportunities for the financial centre?

“Technology and, more specifically, blockchain and distributed ledger technology will enable the fundamental redesign of the fund value chain and have a disruptive impact on stakeholders such as distributors, asset servicers, asset managers. In very simple terms, blockchain allows the different value chain participants to rely on one common single source of truth which removes the need for database duplications, bespoke interfaces, and access and manual authorisation check requirements. What does that mean in terms of value add? It reduces the need for redundant record keeping, reconciliations and costly data interface setups. This present an opportunity for asset servicers to reduce operating costs while increasing scalability. Fund order transaction cycles can be shortened – in theory to instant settlement – and transparency across the chain enhanced, which would upgrade the investor experience.”