{"id":17045,"date":"2025-06-16T10:49:02","date_gmt":"2025-06-16T08:49:02","guid":{"rendered":"https:\/\/www.uni.lu\/snt-en\/?post_type=news&p=17045"},"modified":"2025-12-11T15:28:01","modified_gmt":"2025-12-11T14:28:01","slug":"fintech-beyond-the-buzzword","status":"publish","type":"news","link":"https:\/\/www.uni.lu\/snt-en\/news\/fintech-beyond-the-buzzword\/","title":{"rendered":"FinTech – beyond the buzzword and into the future"},"content":{"rendered":"\n
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AI, compliance, crypto and the digital euro \u2013 researchers unpacked the technologies transforming finance in Luxembourg and beyond.<\/strong>
Whether it\u2019s tapping your phone to pay for a coffee or checking your investments via app, most of us engage with FinTech daily \u2013 often without even realising it. But behind the convenience lies a web of rapid innovation, legal complexity, and urgent questions about privacy, trust and digital identity.

At UniverCity Talks: FinTech \u2013 Beyond the Buzzword<\/a><\/strong>, three researchers from the University of Luxembourg explored what these changes mean \u2013 for finance, for policy, and for society. Held at Tero House 17 on 10 June 2025, the panel was part of the University’s public talk series that invites the wider community into conversation with academic experts.<\/p>\n\n\n\n

\nWhy is everyone talking about a digital euro?<\/h2>\n\n\n\n

Much of the discussion centred on the shift from physical to digital money. From cryptocurrencies like Bitcoin to institutional innovations such as central bank digital currencies (CBDCs), the way we use and define money is changing.

\u201cMoney is based on trust,\u201d said Assoc. Prof Stanislaw Tosza<\/a>, an expert in compliance and law enforcement. \u201cDigital money must earn that trust in new ways.\u201d

At the centre of the discussion was the proposed digital euro<\/strong> – a public digital alternative to cash currently under development by the European Central Bank. It raises important questions about privacy, accessibility, and public demand.

\u201cIt\u2019s not about replacing cash,\u201d explained Assist. Prof Martina Fraschini<\/a>, a researcher in digital finance.<\/p>\n\n\n

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\n \u201f<\/span>\n It\u2019s about giving people the option to use a digital payment tool backed by the central bank. But do we actually need it?\u201d\n<\/blockquote>\n
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Martina Fraschini<\/p><\/div>\n <\/figure>\n <\/div>\n<\/section>\n\n

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Fraschini pointed to existing systems such as SEPA and TIPS – which already enable near-instant transfers \u2013 as possible alternatives. \u201cRather than inventing something new, we might just need to improve what we already have,\u201d she suggested.

The panel also explored broader contrasts in FinTech design. According to Prof Gilbert Fridgen<\/a>, PayPal-FNR PEARL Chair in Digital Financial Services and principal investigator of FutureFinTech, the key lies in how we trust systems.

\u201cBitcoin is built on trust in code,\u201d he said. \u201cBut human institutions have handled trust reasonably well. The real question is: are we solving the right problems \u2013 or just chasing technical solutions?\u201d

Together, the speakers highlighted two major paths in FinTech today: decentralised systems like cryptocurrencies, and institutional innovations such as CBDCs.<\/p>\n\n\n\n

\nAI in finance: from forecasts to compliance<\/h2>\n\n\n\n

AI was another major theme. Fraschini described her FNR-funded research using large language models (LLMs) to analyse financial texts, such as earnings calls and news articles, to improve inflation forecasts.

\u201cWe\u2019re not trying to replace central bank models,\u201d she said, \u201cbut to enhance them with information they couldn\u2019t process before. With LLMs, we can identify signals in global news that may help central banks react faster.\u201d

Yet not all AI models deliver the expected results. Fraschini noted that \u201creasoning models\u201d, designed to mimic human logic, performed no better than standard models in financial prediction \u2013 a surprising result that even OpenAI hadn\u2019t anticipated.<\/p>\n\n\n\n

\nThe regulatory frontier<\/h2>\n\n\n\n

Assoc. Prof Stanislaw Tosza warned against viewing regulation as the enemy of innovation. \u201cWe don\u2019t regulate to stop technology,\u201d he said. \u201cWe regulate to protect people.\u201d
He explained how compliance obligations \u2013 from anti-money laundering to upcoming EU sanctions enforcement \u2013 are rapidly expanding. AI now plays a key role in this ecosystem.<\/p>\n\n\n

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\n \u201f<\/span>\n AI can detect suspicious transactions better than a human analyst,\u201d Tosza said, \u201cbut it also introduces black-box decisions. You may be flagged, and no one can tell you why.\u201d\n<\/blockquote>\n
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Stanislaw Tosza<\/p><\/div>\n <\/figure>\n <\/div>\n<\/section>\n\n

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He cited the EU AI Act \u2013 set to take effect in August 2026 \u2013 as both a challenge and an opportunity for FinTech firms in Luxembourg. Firms using high-risk AI tools will need to act quickly to ensure compliance.

Tosza emphasised that regulation shouldn\u2019t be seen as a brake on innovation, but as its foundation. \u201cWe can\u2019t have innovation without responsibility,\u201d he said, arguing that smart, adaptive regulation and thoughtful design must go hand in hand to build trust and ensure long-term success.<\/p>\n\n\n\n

\nSkills, jobs and the human factor<\/h2>\n\n\n\n

Will FinTech replace jobs? Not necessarily. Fraschini was clear: \u201cWe\u2019ll need to adapt but not vanish. AI boosts productivity \u2013 we can let it write the email, so we can focus on what matters.\u201d

Fridgen agreed, urging attendees to build a solid grounding in technology, no matter their background. \u201cWhether you\u2019re in law or finance, learn the basics. Understand what tools can and can\u2019t do.\u201d

As for future disruptions?<\/p>\n\n\n

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\n \u201f<\/span>\n Some areas will transform faster than others,\u201d said Fridgen. \u201cRetail banking has already changed. The fund industry may be next.\u201d\n<\/blockquote>\n
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Gilbert Fridgen<\/p><\/div>\n <\/figure>\n <\/div>\n<\/section>\n\n

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\nWhat\u2019s next for FinTech \u2013 and Luxembourg?<\/h2>\n\n\n\n

Throughout the evening, one message came through clearly: Luxembourg has the tools to lead in responsible FinTech innovation \u2013 but staying ahead will require adaptability, investment, and collaboration.

Prof Gilbert Fridgen summed it up: \u201cInnovation isn\u2019t about chasing buzzwords. It\u2019s about thinking differently. We can\u2019t afford our industry being disrupted from the outside, we have to make sure to stay up-to-date ourselves.\u201d
The panel identified four areas of real opportunity:
\u2022 AI-enhanced forecasting to support central banks and policymakers
\u2022 Digital identity infrastructure, with the EU digital wallet expected in 2026
\u2022 Process automation to streamline financial operations
\u2022 Sustainable blockchain systems, moving beyond energy-intensive mining

These developments are already shaping Luxembourg\u2019s financial ecosystem \u2013 and they reflect the interdisciplinary approach at the heart of FutureFinTech<\/a>.

Led by SnT and the Faculty of Law, Economics and Finance, FutureFinTech is the University of Luxembourg\u2019s research initiative dedicated to understanding and guiding the transformation of financial systems. Its projects bring together researchers in law, technology, and economics to explore the real-world impacts of innovation.
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FinTech isn\u2019t just about money – it\u2019s about how we live, how we build trust, and how we prepare for a digital future.<\/strong><\/p>\n\n\n\n

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