“When I think about this association, I think about Darwinian theory,” said Vincenzo Giunta, president of the (LFMA). The association, of which Giunta has been president since 2018, aims to play an active role in the grand duchy’s banking industry. “It’s not the strongest animal that survives, but the one that adapts to its environment.”
The banking sector has gone through difficult times in the past few years, explained Giunta. The arrival of the euro in the early 2000s concentrated several currencies into a single currency, leading to less trades--and therefore less traders. “So, the community started to shrink.” On top of that, technological innovations and platforms also began to replace human traders. In response, the association decided to shift from just the forex and money markets sectors, and to include all financial market participants, thus becoming the Luxembourg Financial Markets Association.
“Generational gap”
“A big game changer for our industry has been Lehman Brothers,” continued Giunta, which filed for bankruptcy in September 2008. This was a major disruption for the sector and, as banks were not employing, contributed to a “huge generational gap for several years.” And now, that gap has only widened.
“By 2025, 27% of the workforce will consist of generation Z,” said Giunta. But many members of this generation see the financial industry as uninteresting, unappealing or simply don’t trust the sector, he argued. It’s a generation that has come of age in an unstable, uncertain world, marked by events such as the 9/11 attacks, Lehman Brothers and the 2008 financial crisis, the covid-19 pandemic and now, Russia’s full-scale invasion of Ukraine.
“If we don’t manage to attract them, they will go to work somewhere else. And this can pose a problem of business continuity and financial risk for banks,” said Giunta. Today, when the younger generation go to interviews, “they are the ones that are [asking] the questions to the banks, to the employers. It’s a complete change.”
Sharing expertise, keeping up with regulation
So how can the financial sector attract talent and adapt to current circumstances?
The LFMA, which was established in 1957, has 400 members from over 70 financial institutions in the grand duchy. “The role of our association is to play an active role, to be the voice of the industry, putting in contact all the financial market participants, the banks, together with the financial authority, the regulator, the banking association,” said Giunta.
With a constantly evolving environment, “we have to understand how to adapt,” he added. It’s important to keep pace with events in the industry, exchange views and share expertise. The association, for example, hosts twice a year; one of these dinners will take place the evening of 11 September. Industry players discuss problems, opportunities and share their experiences.
The new generation are the ones that are changing the rules
In addition, to keep up with new rules related to the financial sector, the association organises courses by instructors from the Frankfurt School of Finance in Luxembourg and online, allowing both young professionals and senior members to keep up with the “tsunami of regulation.”
Looking forward, having a long-term vision
The financial markets association interacts with a wide range of ages, from trainees who have just graduated from university to honorary presidents who are older than 80 years old. “When we interact with all of them, we get an understanding of how we should move on, how we need to see the evolution of the market,” said Giunta. “The old [generation] can bring us the rules and they can give us the values, but the new generation are the ones that are changing the rules. Completely.”
Forward Financial Thinking, the forum organised by the LFMA on 12 September, will cover topics such as FX market evolution, platform economies, the effects of geopolitical tensions and the generational shift taking place in the banking sector.
“For me, it’s very important to understand also the younger generation,” added Giunta. “Thanks to them, we have changed the way of communicating.” The LFMA uses LinkedIn, considered to be more of a “professional” social media network, but also . Five or six years ago, it was difficult to see the financial sector on Instagram, but since then, it has become much more accepted. “Even the pope is there,” he pointed out.
“It made sense,” said Giunta. “To communicate with this new generation, we need to use their tools.”
We have to look in the long term.
Besides social media, the LFMA also uses a platform called , which draws its name from two technical terms commonly used in the world of forex. “We use this platform to talk about different topics,” he explained. Interviews with Luxembourg’s regulator, the financial sector supervisory commission (CSSF), for instance, are featured on this platform and are meant to help guide banks in setting up their regulation.
“Our role is to make our sector appealing,” said Giunta, and these are the tools that will bring the sector forward.
The name of the upcoming forum--Forward Financial Thinking--therefore encapsulates the goals of the association. “We have to look in the long term,” he concluded. There needs to be an emphasis on “how to attract the generation Z into our working force” and a “focus on the sector as something good for society.”