ABBL Institutional
Luxembourg banking sector calls for stronger European competitiveness
Published on 13 July 2026
Yves Stein and Jerry Grbic discuss the resilience of Luxembourg’s banking sector, artificial intelligence, competitiveness and the need to strengthen Europe’s Savings and Investments Union.
Summary
Summary
Despite a more challenging geopolitical and economic environment, Luxembourg’s banking sector continues to demonstrate resilience, attract new institutions and support the financing of the real economy. However, maintaining Europe’s competitiveness, fostering innovation and enabling banks to finance future investment will require an evolving regulatory framework and a renewed focus on productivity.
These were among the key messages shared by Yves Stein, Chairman of the ABBL, and Jerry Grbic, CEO of the ABBL, in an interview published by the Luxemburger Wort.
A resilient sector in a more demanding environment
Although geopolitical uncertainty, inflationary pressures and rising operating costs continue to shape the international landscape, Luxembourg’s banking sector remains on a solid footing.
The sector recorded another strong year in 2025, while continuing to attract new banking institutions to Luxembourg. Employment has remained remarkably stable despite ongoing consolidation, reflecting banks’ continued investment in productivity and operational efficiency.
At the same time, the nature of banking jobs continues to evolve. Functions related to risk management, compliance, cybersecurity and technology have become increasingly important as institutions adapt to a more complex operating environment.
Private banking, custody and payments continue to drive growth
Several business lines continue to underpin Luxembourg’s financial centre.
According to Yves Stein, private banking, depositary banking and payment services remain among the strongest contributors to growth. Depositary banking continues to benefit from the expansion of Luxembourg’s investment fund industry and real assets, while payment activities are being supported by the arrival of new payment and electronic money institutions.
Jerry Grbic also highlighted the strength of Luxembourg’s broader financial ecosystem, combining specialised expertise, legal certainty, international talent and an experienced regulator.
Competitiveness must remain Europe’s priority
While Luxembourg banks remain profitable, both speakers stressed that competitiveness has become the defining challenge for the sector.
Banks continue to invest heavily in technology, cybersecurity, regulatory compliance and risk management. These investments are essential but also increase operating costs.
Rather than competing on costs alone, Luxembourg must continue moving towards higher value-added activities, building on its expertise, international outlook and specialised competencies.
Recent government initiatives aimed at strengthening talent attraction and enhancing Luxembourg’s competitiveness were highlighted as positive developments supporting this objective.
If we talk about competitiveness, the real challenge is international.
Jerry Grbic
CEO, ABBL
Artificial intelligence offers opportunities alongside new risks
Artificial intelligence was presented as one of the sector’s most significant opportunities.
Already today, banks are using AI to support fraud detection, document analysis, compliance processes and cybersecurity operations. The objective is not to replace employees but to improve efficiency and enable staff to focus on higher value-added activities.
At the same time, AI must be deployed within a robust governance and risk management framework, recognising the new cybersecurity and operational risks associated with these technologies.
Both Yves Stein and Jerry Grbic stressed that continuous investment in training and skills development will remain essential as banking professions continue to evolve.
We must continue developing higher value-added activities where human expertise makes the difference.
Yves Stein
Chairman of the ABBL
Financing Europe’s future
Looking beyond Luxembourg, Jerry Grbic underlined that Europe’s competitiveness is closely linked to the competitiveness of its banking sector.
According to the independent Oliver Wyman study commissioned by the European Banking Federation, the European Union faces an estimated €1.4 trillion annual investment gap to finance the green transition, defence, infrastructure, digitalisation and innovation.
Banks currently provide around 65% of financing to the real economy, making them central to Europe’s future growth. However, unlocking the required level of investment will depend on completing the Savings and Investments Union (SIU) while ensuring that regulation allows banks to continue financing businesses and strategic European priorities effectively.
65
%
of real economy financing provided by banks.
Key figures
- €1.4 trillion annual EU investment gap
- 65% of real economy financing provided by banks
- Private banking, depositary banking and payments remain Luxembourg’s key growth engines
Source
This article is based on an interview with Yves Stein, Chairman of the ABBL, and Jerry Grbic, CEO of the ABBL, published by the Luxemburger Wort.
