The creation of the support PSF status in Luxembourg marks its 20th anniversary, signifying a major milestone in the realm of financial services and support. This achievement has played a crucial role in reinforcing Luxembourg’s position as a leading financial services hub. It has had a far-reaching impact on the economy, businesses, and skilled multi-lingual workforce, while also facilitating adaptation and growth within the financial industry.
The support PSF status has been instrumental in establishing Luxembourg as a premier destination for financial services. It encompasses a wide range of specialist services that enhance operational efficiency, provide expertise, ensure regulatory compliance, and contribute to Luxembourg’s regional reputation. Luxembourg is the only regulating country that has a dedicated operating license’ for the ICT companies providing ICT services to the local financial sector. This is unique to Luxembourg.
Therefore, one of the key contributions of the support PSF sector is improving operational efficiency for financial institutions in Luxembourg. By outsourcing administrative and operational tasks to specialist service providers, financial firms can concentrate on their core businesses, such as investment management and client servicing. These service providers offer supportservices such as providing ICT experts, infrastructure hosting, security operations centers, and cloud intermediaries. This expertise attracts international financial institutions to Luxembourg, as they benefit from the knowledge and experience of these service providers. The availability of support professionals enhances the overall capabilities and competitiveness of Luxembourg’s financial sector.
Additionally, Luxembourg has a robust regulatory framework for financial services, and these regulatory requirements have recently been increased with the voluntary choice of the regulator (CSSF) to adopt and apply the current EBA guidelines on outsourcing arrangements -theoretically directed at credit institutions – to the whole industry and all supervised entities to promote a national level playing field. Support PSF providers play a crucial role in helping financial institutions navigate and comply with these regulations. They ensure institutions meet compliance obligations, conduct due diligence, undertake risk assessments, and adhere to reporting requirements. By assisting businesses in fulfilling their regulatory responsibilities, support PSF contributes to maintaining Luxembourg’s reputation as a well-regulated and compliant financial center.
Moreover, support PSF offers scalability and flexibility to financial institutions. As businesses grow or adapt to changing market conditions, they can easily access additional support services or adjust service levels based on their evolving needs. This flexibility allows financial institutions to efficiently manage their resources and respond to market demands without disruptions. The ability to readily access specialist support services is a key advantage for financial firms in Luxembourg.
The presence of a robust professional finance support sector has enhanced Luxembourg’s international reputation as a preferred destination for financial services. The expertise and quality of service provided by support professionals continue to attract a wide range of international financial institutions, including banks, asset managers, insurance companies, and investment firms. The influx of these players has further stimulated the growth of Luxembourg’s financial services sector, contributing to its reputation as a global financial hub.
More importantly, the growth of the support PSF sector has resulted in significant job creation. It employs a large number of highly talented professionals, such as accountants, compliance officers, administrators, and support staff from both within Luxembourg and nearby cross-border towns. Furthermore, the associated economic activity, such as office space, technology infrastructure, and business services, further contributes to the overall economic development of the country. Hence, the support PSF serves as a vital engine for job creation and economic growth in Luxembourg for corporate organisations like Grant Thornton and alike.
As Luxembourg continues to thrive as a global financial center, the support PSF sector will remain a key driver of its success, solidifying its reputation as a premier destination for financial services.