The world is changing fast and exchanges must adapt accordingly. “Big data, driverless cars, climate change, crypto-currencies, smart grids, shifting geopolitical powers are becoming our day-to-day reality. There is place for nimble and focused players, such as LuxSE, provided we clearly identify and anticipate the key determining factors for the ten years to come”, says Frank Wagener, President of the Board of LuxSE.
Founded in 1928, LuxSE is evolving in line with Luxembourg’s economic agenda: with a strong focus on sustainability, green finance, China and Fintech.
“The Luxembourg Stock Exchange is a key player of our financial centre and its ecosystem. Its development over the last 90 years mirrors that of the Luxembourg’s economy, punching above its weight, with a strong emphasis on international markets, constant innovation and, more recently, Fintech and sustainable finance”, remarks Pierre Gramegna, Minister of Finance of Luxembourg.
“We operate in an extremely complex environment influenced by diverse factors and technologies, which sometimes even work against each other. With our innovative, first-mover attitude, we have a huge impact on capital markets despite the small size of our local market. But we should not rest on our laurels”, comments Robert Scharfe, CEO of LuxSE.
With this in mind, we asked ourselves some hard-to-answer questions:
- What will the future of capital markets look like ten years from now?
- Will it be Siri, Alexa or other form of artificial intelligence giving the opening speech at our 100th anniversary?
- Will finance become 100% sustainable?
- Where will China’s ambitious Belt and Road Initiative take us in the coming decade?
To answer these pertinent questions, we asked four experts to share what, in their opinion, the most disruptive factors will be. According to Dr Keyu Jin from the London School of Economics: “The financial history of yesterday was written by the U.S. and the great recession. The financial history of today and tomorrow will be written by the emergence of China.” She believes that Europe is not prepared for what the future will bring.
Nasir Zubairi, CEO of The LHoFT, believes that: “History is littered with automation and innovation. At no time has this led to mass unemployment. We, humans are incredible in our pliability and this strength will help us adapt and succeed in the era of AI”.
The perspective of Siobhan Cleary, Head of Research & Public Policy, World Federation of Exchanges believes that transitioning to a more sustainable society is our most pressing challenge. “The finance sector has a crucial role to play in enabling this transition”.
Raja Palaniappan, CEO, Origin, believes that: “While it’s obviously exciting to witness the rapid developments in the technology and fintech sectors, it’s important to remember that capital markets have always been, and will always be a human business.”
For financial institutions, and for exchanges in particular, to stay competitive, we need to take stock of all these trends and embrace them to ensure the best service delivery and to keep costs in check. “Our slogan is ‘always in motion’, we will keep on moving. That’s what makes our job challenging and fascinating at the same time,” concludes Robert Scharfe.
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