ING News

Luxembourg, 28/10/2020

Adoption of new financial tools: scepticism prevails in Luxembourg

Why change what is not broken? This may be the general consensus in Luxembourg when it comes to new financial tools. The latest ING International Survey asked people in 13 European countries, including 500 people in Luxembourg, about their openness to adopting new financial tools.

In particular, the survey looked at Open Banking – the sharing of financial data between financial service providers with the user’s permission – and at attitudes towards the security of various authentication systems used to log into financial apps and websites.

One key finding is that Luxembourg respondents are in no rush to use Open Banking, i.e. to allow financial services providers to share their financial information. This attitude is shared with Belgium, and to a lesser extent with France. It contrasts with the higher level of acceptance observed throughout the continent, especially in Germany and Austria.

In some parts of the world, new regulation makes it possible for financial providers to access your financial information held by other companies, if you give them your permission.

As the answers suggest, part of this reluctance may be due to a perceived lack of benefits: Luxembourg residents just don’t understand (yet) how Open Banking could be useful to them. This may also relate to the fact that the new Luxembourg law implementing the EU’s revised payment services directive from 2015 (or PSD2) was only enacted about two years ago[i], which could help explain why the adoption of Open Banking services has not taken off yet: most Luxembourg residents may simply not be familiar with the concept, having had relatively little opportunity so far to experiment with it. Respondents in some other countries are far more enthusiastic as they see how such services can allow them to, for instance, quickly track their financial situation and move assets around.

In the answers of Luxembourg’s residents to the second set of questions, a similar scepticism is on display. This time though, it may be a sign that the country has already found satisfactory authentication solutions.

How secure do you think … is?

Those who responded “very secure”

The fact that very few Luxembourg residents find login alternatives like, facial recognition, fingerprints, and especially voice recognition very secure may again have to do with low adoption. There may be a social tipping point beyond which one or more of these biometric authentication techniques will become universally recognized and more widespread. Another factor at play is the fact that three-factor authentication is already a fact of life in Luxembourg, with most banks using services like Luxtrust to ensure secure client login.

As many argue that the Covid-19 pandemic accelerates digitalisation trends, it remains to be seen whether open banking solutions and alternative authentication methods will become more widespread in Luxembourg.

[i] Law of July 2018

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