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Research into Innovative FinTech Applications

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Published on Tuesday, 07 March 2017

The Alphonse Weicker Foundation, powered by BGL BNP Paribas, and the University of Luxembourg’s Interdisciplinary Centre for Security, Reliability and Trust (SnT) have launched a major long-term research and development programme in the field of FinTech (financial technology).

FinTech describes innovation in financial services arising from the use of new digital technologies such as block chain, data analytics, and machine learning. It is an area of significant importance to Luxembourg as a global financial centre, and this agreement will contribute to efforts to establish the Grand Duchy at the heart of this rapidly developing industry. The agreement is part of SnT’s Partnership Program, where SnT scientists are researching new concepts to tackle the key challenges facing industry and the public sector in information and communication technology (ICT).

With the rapid growth of the FinTech industry, financial service providers are facing complex challenges in terms of security and regulation; by definition, FinTech involves the handling of large amounts of sensitive personal and corporate data, making the ability to both ensure and demonstrate that systems are reliable and secure of critical importance. Within this context, the partnership will see the SnT working with BGL BNP Paribas in the fields of security risk management, client segmentation, and software testing, to develop new financial instruments.

Joint Research Programme between SnT and Fondation Alphonse Weicker

Kik Schneider, Chairman of the Alphonse Weicker Foundation commented: “This is indeed a great and promising partnership! The Alphonse Weicker Foundation will rely upon SnT’s FinTech research expertise to cope with the needs of the Bank in the fields of security, customer behavior and data management.” The SnT Director, Professor Björn Ottersten remarks: “Working with BGL BNP Paribas, one of the top financial actors in Luxembourg, on this strategic research programme marks a milestone for SnT. The financial sector is undergoing a digital transformation and through targeted R&D activities, we aim to increase the competitiveness of our partners.”

In the field of security risk management, the SnT’s Software Verification and Validation Lab (SVV), led by Professor Lionel Briand, will explore the mining of security patterns from repositories of past IT projects. Security best practices give rise to over 900 potential security patterns to be considered for every project – a time consuming task. The ultimate goal of this research is therefore to build an automated recommendation system for future projects, using machine learning and the processing of natural language (non-computer language) content of past projects to capture corporate security management experience.

Meanwhile, the SnT’s Security Reasoning and Validation Research Group (SerVal), headed by Professor Yves Le Traon, will work with BGL BNP Paribas on two R&D projects. In the field of software testing, the group will explore the use of advanced data analytics, allowing the system to learn from past and current projects in anticipating the location of defects. The group’s second project will involve the use of machine learning to allow detailed client segmentation based on investor behavior rather than other more usual criteria. The system will offer dynamic investment proposals, performing what-if analytics in real time.

The collaboration with the SnT in these research areas will allow BGL BNP Paribas to develop innovative and highly performant solutions that meet their customers' requirements and expectations. For the SnT, the fundamental insights generated in this collaboration will be published in top-tier, peer reviewed publications.

With the signing of this agreement, SnT’s partnership programme has expanded to 31 partners with 7 collaborative projects in FinTech.

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The project is supported by a grant from the Alphonse Weicker Foundation, and will be monitored by a steering committee consisting of members from the Foundation, BGL BNP Paribas and the SnT.

Photo: Rainer Klump, Kik Schneider & Björn Ottersten, © University of Luxembourg