In the current context of low interest rates, financial
institutions' margins are under quite a bit of pressure. As a
result, outsourcing is on the rise. Usually considered one of the
most effective ways to achieve cost efficiency while enhancing
agility, outsourcing allows financial institutions to rapidly
introduce digitalization in their business models and to use
fintech more seamlessly. This upward trend is particularly strong
in Luxembourg, many of whose financial players are subsidiaries of
foreign groups and thus long accustomed to outsourcing.
Aiming for a more harmonized governance framework for
outsourcing, the European Banking Authority (EBA) has recently
published the final version of its revised guidelines on
outsourcing arrangements. These guidelines are applicable to credit
institutions and investment firms subject to the Capital
Requirements Directive, as well as to payment and electronic money
institutions; it ensures a level playing field for these
