AGEFI Luxembourg - juillet août 2025

Juillet / Août 2025 45 AGEFI Luxembourg Informatique financière By Cédric LALIN, Senior Business Consultant andGeoffroyPETIT&HerwigTEMMERMAN (portrait), Partners at BearingPoint 1. The Imperative: why finance canno longer afford towait I n today’s financial ecosystem, the rules of the game are being rewritten—by regula- tion, client expectations, and especially by data-dri- ven innovation. Artificial in- telligence (AI) is no longer optional; it is the strategic lever separatingmarket lea- ders from the rest. And yet, a significant share of financial ins- titutions remain hesitant. A 2023 Gartner report revealed that 36% of firms still lack a coherent AI strategy. Regulatory uncer- tainty, complexity, andoperational inertia often top the list of reasons. But the risks of inaction are now greater than those of controlled experimentation. The numbers tell a compelling story. McKinsey es- timates thatAI could inject up to $1 trillionannually into global banking—a 22–30%boost inprofitabil- ity.AI is powering everything fromreal-time fraud detection and personalized customer engagement to intelligent automation in compliance and back- office operations. While many view AI as a per- formance enhancer, it is increasingly be- coming a question of long-term viability. As Harvard Business Review empha- sizes, “AI is rapidly emerging as the new foundation for competitive advantage. The organizations that learn to integrate it deeplywill lead their industries.” Financial firms that delay adoption risk falling be- hind in a market where speed, intelli- gence, and scale define success. 2. Beyond automation: the rise of the augmented organization A truly modern AI strategy goes beyond automating repetitive tasks — it sets the foundation for becoming an augmented organization . As de- fined by BearingPoint, an augmented organiza- tion blends human capabilities with AI-driven intelligence to improvedecision-making, adaptabil- ity, and value creation. This is not just a technological evolution; it’s a deep shift in how companies operate, compete, and grow. It’s about creating synergies betweenhuman judgment andmachine capabilities—not replacing people, but empowering them. To achieve this, financial institutions must begin with ambition, not infrastructure. That means defining a north star: what do we aim to become, and how will AI help us get there? As MIT Sloan points out, firmswithAI ambition tied to their busi- ness strategy are significantlymore likely to realize ROI. The strategy must address both opportunity and risk: which functions are ripe for AI transfor- mation, how will data be governed, and how will trust and transparency be maintained? Moreover, this ambition must translate into an execution framework—identifying the right use cases, build- ing foundational capabilities (such as a strong data platform), and reskilling talent to thrive in a hybrid AI-human operating model. Ultimately, becoming augmented is about re- silience. BearingPoint’s recent study found that 95% of business leaders consider becoming an aug- mented organization a strategic objective — and nearly 80% view it as a survival strategy . In an en- vironment of constant disruption, the ability to adapt quickly, learn continuously, and scale inno- vation is what separates leaders from laggards. 3. Governance, Trust and Execution: turning strategy into advantage With scale comes scrutiny. As financial firms in- crease their reliance on AI, they must invest in the governance structures needed tomanage it respon- sibly. The forthcoming EUAIAct, for instance, will require high-risk AI systems to be auditable, ex- plainable, and alignedwith ethical standards. Yet according to Augmented Business , 47% of fi- nancial services players are still exploring the best ap- proach to AI governance , highlighting a widespread uncertainty that could hamper progress. A comprehensiveAI strategy must include a gov- ernance body spanning legal, IT, compliance, HR, and business leadership. This team’s mission is to vet initiatives, monitor model risk, and ensure alignment with business and regulatory priorities. KPIs and “AI control towers” can help track progress in real-time, while structured feedback loops ensure continuous improvement. But gover- nance isn’t just about compliance— it’s also about building trust. Internally, employees must under- stand howAI supports (not replaces) their roles. Externally, clients must believe thatAI-driven de- cisions are fair, transparent, and secure. The cul- tural shift is just as important as the technical one. The augmented organization is powered asmuch by mindset as by machine learning. AI maturity isn’t solely about having the right capabilities — it’s fundamentally about building trust. That trust grows through strong leadership, deliberate in- vestment, and, above all, a clear sense of purpose. Financial institutions that begin this journey now —focusing on strategy before tools—will be best positioned to shape the next wave of industry transformation. Sources -McKinseyGlobalInstitute, “TheFutureofAIinFinancialServices,” 2023 -HarvardBusinessReview,“CompetingintheAgeofAI,”2020 - MIT Sloan Management Review, “The Cultural Factors That DriveAIAdoption,” 2023 - Gartner, “State ofAI in Financial Services,” 2023 - European Commission, Proposal for a Regulation Laying Down Harmonised Rules onArtificial Intelligence (AIAct), 2021 -BearingPoint, “BecominganAugmentedOrganizationIsaStrategic Objective and a Survival Strategy,” Press Release, 2024 Do you have anAI strategy? F irms face a critical imperative: adapt or lag. The force of digi- tal transformation is resha- ping markets, consumer expectations and regula- tion. Investing in the tran- sition is a necessity for resilience and relevance. Luxembourg-based firms can benefit from an invest- ment tax credit to support their transition, but uptake has not been as strong as it could – and should – be. Digital technologies offer com- panies opportunities to stream- line operations, improve cus- tomer experiences and unlock new business models. FromAI- driven analytics, to cloud-based infrastructure, embracing digi- tal innovation enhances effi- ciency, agility and competitive- ness. Companies that fail to invest in these tools risk becom- ing obsolete in an increasingly data- and technology-driven economy. What are the top five considerations for firmswhen embarking onor scalingup digital transformation? Success in digital transforma- tion requires more than simply upgrading systems or adopting the latest tools. It demands a comprehensive shift in how businesses operate, deliver value and engage people. Here are five critical considerations organizations must address to achievemeaningful and sustain- able change, drawing insight from EY’s framework on digital transformation. 1. Embrace nonlinear value cre- ationandorganizational change Big transformations are about fundamentally reshaping how value is created. Companies must cultivate a culture that embraces fluid, nonlinear out- comes. This means engaging with the workforce to build resilience and adaptability, and getting comfortable with itera- tive (not once-off) improve- ments. 2. Close skills gaps with capac- ity building A technological shift can only be as successful as the people behind it. It is important to iden- tify and address skills shortages – especially in areas like AI, cloud, data analytics and cyber- security. Establi-shing clear training programs, re-cruiting new expertise and fostering internal mobility is imperative. 3. Build agile business and technology architecture Legacy business systems and fragmented IT landscapes can seriously hamper progress and that is why firms should adopt modular, interoperable systems that align with strategic objec- tives. An agile architecture speeds up deployments and accelerates innovation. 4. Leverage data as a strategic asset and embed cybersecurity Data should be treated as a core business asset. Developing robust data governance, culti- vating data ownership and establishing pipelines for analyt- ics andAI are paramount. 5. Implement clear gover- nance and decision-making frameworks Transformations easily stall without clear accountability. It is essential to define governance structures with explicit roles, responsibilities and trade-off protocols, and ensure decisions remain aligned to value objec- tives and adapt to changing cir- cumstances. While the above forms the foun- dation of a successful transfor- mation, organizations must be realistic about the financial com- mitment involved. The cost of digital transformation – both direct and indirect – can be steep, encompassing technology investment, talent acquisition, operational disruptions and long-termchangemanagement. Underestimating these expenses can derail progress, and the fear of cost itself can be daunting enough to delay or dilute trans- formation efforts. However, avoiding the transformation journey altogether can prove far more costly in the long run as competitors leapaheadand lega- cy systems become liabilities. Did you know that there is a tax credit for digital investment in Luxembourg? To offer firms some relief, Luxembourg offers a one-of-a- kind credit for digital invest- ment. The investment tax credit (ITC) regime – upgraded in 2023 – is designed to encourage investment in digital transfor- mation (as well as the ecological and energy transition – not cov- ered in this article). However, in 2024, only 72 projects havemade use of the relief, of which 56 con- cern digital transformation. The ITC offers an 18% tax credit for investments (capex) and operating expenses (opex) relat- ed to digital transformation, the process or innovation which involves implementing or using digital technologies. It is calcu- lated on the acquisition or pro- duction cost of the relevant investments made during the financial year, and if the tax level is too low, unused tax relief can be deducted from taxes payable for the next 10 years. What investments qualify? Inpractice, the following are typ- ically covered: investments in depreciable tangible assets (other than buildings), investments in software or patents (other than those acquired from related par- ties), expenses incurred for the use of, or the right touse, patents or software (except if granted by a related party), fees for consul- tancy, diagnosis and technical support services that are provid- ed by external service providers and are unrelated to the compa- ny’s ordinary operating expens- es, aswell as employee costs and employee training costs in rela- tion to staff directly involved in the company’s digital transfor- mation. Investments andoperat- ing expenses incurred to ensure the company’s compliance with regulation or legislation are explicitly excluded. How can businesses claim the credit? Business must submit, together with its income tax return, a cer- tificate issued by theMinistry of the Economy attesting that the investments were actually made, the operating expenses were actually incurred during the given operating year, and the corresponding amount. The granting of this certificate is only possible on the condition that firms first obtain an “attestation of eligibility” from theMinistry. Firms can apply for this attesta- tion via MyGuichet.lu. While the ministerial decision granting or refusing the attesta- tion is intended to be issued as soon as possible, it can legally take up to three months follow- ing a completed application, sometimes more depending on circumstances. It is important to note that only investments and expenses that follow the date of submission of the application of the attestation can be covered by the certificate. We encourage all to make use of this benefit As covered in the recent EY Luxembourg Attractiveness Survey (2025), global enterprises increasingly demand efficiency, transparency, and digital-first experiences, inaddition to a focus on sustainability. Looking purely at the financial industry, Luxem- bourg’s future competitiveness willdependalargepartonitsabil- ity to operationalize innovation across the entire fund industry. Luxembourg must therefore invest deeply in scalable, end-to- end digital initiatives and infra- structure. There is amajor oppor- tunityhere for the asset servicing industry which should not be overlooked. As the number one fund industry in Europe, Luxembourghas the potential to become a top digital hub for asset servicers. A strong digital ecosystem – with attractive incentives – is critical for asset servicers. Ifmore servicers estab- lish operations in Luxembourg, they will offer reliable services that draw fund managers seek- ing quality support. This strengthened ecosystem will boost foreign investment, solidi- fying Luxembourg’s status as a leading investmentmanagement destination. A stronger effort is needed to help more companies benefit from the ITC. The same Luxembourg Attractiveness Report suggests that the Luxembourg government should raise awareness and sim- plify the tax credit application process. Clearer guidelines and streamlined attestation require- ments could help businesses use these incentives more effective- ly. At the business level, timing is a critical factor – firms must consider when to apply for the ITC as the attestation of eligibil- ity is required prior to the investments being made or expenses being incurred. In conclusion, large-scale digital transformation goes beyond adopting new tools. While the costs can be significant and sometimes deter action, the greater risk lies in standing still. The ITC is therefore awelcomed initiative, but to date the uptake is not at the expected level. Enterprises are encouraged to make themost of this benefit and to consider application well ahead of the planned invest- ment/expense as the approval timing canbe longer than expect- ed. Organizations that invest wisely and stay focusedon long- termvaluewill be farmore likely to realize meaningful ROI. Jean-Bernard DUSSERT, Transfer Pricing Partner, ESGTax Leader Nicolas VOLFART, SeniorManager,BusinessTaxServices(BTS) Brice LECOUSTEY, Partner, Asset Servicing Leader Ajay BALI, Partner, Technology Consulting Leader EY Luxembourg Are you doing enough to scale your digital transformation?