Banking
Located in the heart of Europe, and home to 127 banking institutions from all over the world, the Luxembourg financial centre is renowned for both its agility and stability, and has built up a unique ecosystem for the Banking industry, bringing together various service providers including investment services, FinTechs, family offices, wealth planning, real estate management and philanthropy; as well as third-party management companies, international listing and post-trade services – all with the infrastructure and regulatory expertise needed for success. In the wake of Brexit, many international institutions have relocated their activities to Luxembourg, resulting in a sharp increase in total assets.
With 28 Partners leading more than 340 Banking sector professionals, PwC Luxembourg has unparalleled experience in assisting banks in their daily activities. Whatever your requirements, our dedicated Audit, Tax and Consulting teams have the necessary experience to guide you through the intricacies of local and European regulations and to help you achieve your goals as their number one priority.
If in 2019, the narrative was that banks must transform or die, now we see that many have begun to adapt to the new ecosystem and deliver superior client experiences. But there is still a long way to go. In order to go further, banks must bring constant innovation to the forefront. With the speed at which the financial services environment is evolving, global and local banking groups are taking a variety of approaches to transform and remain competitive, a strategy that has been accelerated by COVID-19 and its impact.
Customer-centric future
Globally, the Banking industry increasingly faces severe disruption from technically nimble new entrants. In September 2019, Luxembourg for Finance, supported by PwC, released a report on how “Amazonisation is the future of European financial services”. The conclusion was that the Banking sector is in a crucial period, and that it must adapt or die.
“Amazonisation” demands institutions to be more cost effective, agile and competent. It is innovative and client-centric and depends on making effective use of Artificial Intelligence, data analytics and smart technologies to meet current and predicted market needs.
In the Banking industry, consumer satisfaction is the key differentiator. High consumer satisfaction results in crucial competitive advantages such as higher recommendation rates, increased cross-selling possibilities, and an overall strong brand identity.
Trusted advisors with innovative methods
PwC works hard to be counted as the trusted advisor. We accompany our clients through their transformation projects and upskill their workforce to ensure that solutions are adopted and used on a day-to-day basis.
Since 2019, the PwC Digital team has been reviewing major bank current clients’ employee and customer management related issues. They assessed both customer and employee journeys, and the underlying functional and technical architectures. Taking into account the bank's goals, and drawing on PwC's Business, (customer and employee) Experience and Technology (BXT) framework, to transform the bank for the years to come.
Digital survival
To help the Banking sector through the unfolding pandemic and its impact, PwC organised a COVID-19 Business Briefing for Banking, During this session we addressed issues related to their key challenges that included regulation changes in general and those related to the environment in particular, and risk assessment, etc. PwC provided guidance on how clients could approach these impacts, and has continued with a virtual conference on a bimonthly and then monthly basis. We made our experience and knowledge available in the initial period when it was more critical on an almost 24/7 basis.
Warming to ESG and sustainable finance
PwC Luxembourg has developed a comprehensive ESG service offering for banks that can include services for Compliance, Strategy, Products/Services, ESG data/Impact measurement, Risk Reporting/Marketing Upskilling and Assurance.
A number of events on the PwC calendar for 2019-2020 covered topics related to ESG, culminating in our fully dedicated remote access event more recently on September 30, 2020—PwC Financial Services Forum - Financial Services from a different angle.
Regulatory change — a big topic for banks
One of the main regulatory changes on every bank’s agenda is the EU Council’s tax transparency Directive (2018/822) on Administrative Cooperation with the sixth amendment (DAC 6). Over 2020, PwC's Tax experts helped clients understand DAC 6 specifically related to its rules, obligations, requirements, sanctions and deadlines, and in the broader tax policy context. The range of our services included guidance on, impact assessments, governance frameworks, data management and reporting, amongst others.
The changes introduced by Basel III and CRD (Capital Requirement Directive) 4, its European Union implementation, as well as Basel IV will have fundamental implications for banks and shape their business models for the future. In addition, the Anti Money Laundering amended Law and Regulation will apply more pressure on the Luxembourgish market with a set of new requirements. PwC Luxembourg has developed a full range of services to assist banks in these areas.
The way forward
In addition to its “Amazonisation” report, PwC launched a series of Thought Leadership initiatives, to better understand and inform our clients and the markets.
Our annual Banking Trends and Figures 2020 Survey included an Innovation in Banking analysis which highlighted six key focus areas where banks are using innovation to stay ahead; attempt to develop the perfect mobile app, with applications assisting customers in a wide range of areas, from budgeting to financial mentoring, large-scale use of biometric data: fingerprints, eye scans, facial recognition and finger vein scans have been combined with high technology to offer identity verification, "Conversational Banking", through the use of virtual assistants, chatbots and machine-learning algorithms allowing real-time response to client request, strategic partnerships: an increasing number of banks are realising that partnerships with tech companies, startups and fintech boutiques prompt the creation of more efficient solutions, SME solutions, since a large number of innovations are tailored towards the small and medium enterprise sector, and Sustainable Finance.
About Annual Review
Follow us
