EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Select your location
Local sites
“Luxembourg’s asset servicing industry recognizes digitalization as key to staying competitive. Faced with high competition and cost pressures, companies are consolidating and reconsidering their operational models with digitalization in mind,” says Brice Lecoustey, EY Luxembourg Partner and Asset Servicing Leader. The industry’s digital maturity has notably progressed, advancing from “Basic” to “Advanced” in two years, as per EY’s latest industry benchmark; the research offers several critical insights into the industry trends.
Confidence in customer centricity is high
Asset servicers show strong belief in their client-centric approach, with 78% confident in the positive customer perception of their services and 61% claiming an intermediate level of client experience, using digital tools to enhance client interactions.
Prioritized digital investment for futureproofing business models
In an effort to futureproof their operations, over half of asset servicers have secured full funding for digital projects, with 57% dedicating up to 5% of revenue towards initiatives.
Outlook towards AI is positive and investment is imminent
The sector is geared up for AI integration, with 91% expressing confidence in adapting to the technology. Data platforms, AI, and workflow automation are emerging technologies most expected to shape organizations over the coming years. The main areas where emerging technologies (especially AI) are being deployed are operational support, customer service, knowledge management and compliance.
Most firms align their digital strategy at the group level
Over half (52%) of firms align their digital strategies with group-level objectives, prioritizing digital projects which have strategic alignment. Regular strategic partnerships with fintechs are leveraged by 70% to strengthen digital approaches..
Two-thirds of firms have digitalized half or more of their operations
Despite two-thirds of firms digitalizing over half of their operations, standardization issues in data and systems are recognized as barriers by 73% of servicers when developing new products, offsetting efficiency gains. The challenges are exacerbated by customers’ limited use of digital platforms, leading to a greater dependency on human assistance.
A compelling vision for the future
Looking to the future, Ajay Bali, EY Luxembourg Partner and Digital Emerging Technologies Leader, comments, “We can expect the asset servicing industry to invest further in a “digital first” strategy, through the power of data modernization, enabling digitalization of processes through workflows and AI and further moving towards a product-centric organization supported by world class customer experience.”
According to Bali, this will likely lead to a shift in pricing models towards value-based options and elevate the roles of Chief Digital and Innovation Officers due to their strategic importance. Customer interactions will center around online client platforms for onboarding and updates, with support from GenAI to increase efficiency and achieve over 70% hyper-automation. Behind the scenes, operational platforms will track tasks and measure performance, consistently visible to customers. Simultaneously, innovation in technology will be driven by dedicated digital hubs focusing on integrating emerging tech and maintaining a proactive, future-facing IT approach, while continuous education will keep staff abreast of new technologies to ensure added value across the business.”
Summary
Luxembourg’s asset servicing sector is embracing digitalization, with two-thirds of firms having half or more of their operations digitalized. According to EY Luxembourg’s study, most firms are fully funded for digital projects, and 57% allocate up to 5% of revenue to these initiatives.