Interview with Simon Tribelhorn, CEO of the Liechtenstein Bankers Association

In an insightful conversation with Simon Tribelhorn, CEO of the Liechtenstein Bankers Association (LBA), we explore the challenges and opportunities facing the banking sector today. Tribelhorn, who has been with the LBA for nearly 20 years and CEO since 2010, provides valuable insights into regulatory issues, strategic trends, and the importance of sustainability and digitalization. He elaborates on the role of the LBA’s working groups, the complexity of current sustainability regulations, and the innovative use of blockchain and AI. This interview showcases how the LBA is securing the future of the financial industry.

Abdullah Melik Yildiz: Simon, thank you for taking the time for this interview. Can you tell us about your professional background and your role at the Liechtenstein Bankers Association (LBA)?

Simon Tribelhorn: Thank you, Abdullah. I have been with the Liechtenstein Bankers Association for almost 20 years. I studied law and started my career at the association as a lawyer. In 2010, I took over as CEO. My responsibilities include not only regulatory issues but also strategic topics such as trends, innovation, and sustainability, as well as how we can position ourselves as a modern relevant banking association.

Abdullah Melik Yildiz: What is the core mission of the LBA, and how do you support your members?

Simon Tribelhorn: Our core mission is to represent the interests of our members. We work closely with them and have many working groups and committees on topics such as compliance, payments, taxes, sustainability, blockchain or digitalization in general covering AI and other technological important aspects. In order to stay relevant and have a voice, we maintain a continuous dialogue with our stakeholders, both within Liechtenstein, in the German speaking neighboring countries since they are the main target markets of our members and of course at the European level. Hence, we are often  in Brussels to contribute to the European legislation process .

Abdullah Melik Yildiz: Can you give us an insight into the working groups and their focal points?

Simon Tribelhorn: Certainly. We currently have eight standing committees and 20 working groups that cover a wide range of topics. These include cyber security, regulatory issues like DORA and MiCA, artificial intelligence, and sustainable finance. These groups help us develop strategies to meet regulatory obligations, leverage market opportunities, and provide our members with concrete support and templates.

Abdullah Melik Yildiz: How do you see the role of regulation in the banking sector, particularly in sustainability?

Simon Tribelhorn: Regulation plays a crucial role to provide legal certainty, but is becoming increasingly complex. We are currently observing this especially in the areas of sustainability regulation, DORA, and the implementation of Basel 3 in Europe. The depth and breadth of sustainability regulation is quite challenging, particularly data collection and processing. Many of our banks are committed to achieving net-zero targets, not only in their operational activities but also in their portfolios. This is very ambitious, but should be our main objective and not be hindered by too complex regulation. 

Abdullah Melik Yildiz: How are your members responding to the challenges of net-zero targets?

Simon Tribelhorn: We believe that a long-term focus on sustainability is in the best interest of the customers. Long-term sustainable investments carry less risk and do not compromise returns. A meta-analysis by the Bank of England of over 2000 studies shows that sustainable investments are less risky in the long run. However, it is still challenging to find and offer sustainable investment products under Article 9 of the EU Taxonomy. There is a chicken-and-egg discussion between supply and demand that we need to resolve to expand the market for sustainable value investments.

Abdullah Melik Yildiz: Can you tell us more about Articles 6, 8, and 9 of the EU Taxonomy Regulation and their impact?

Simon Tribelhorn: Sure. Article 6 of the EU Disclosure Regulation concerns transparency in considering sustainability risks in the investment process. Article 8 deals with transparency in promoting environmental and/or social characteristics, while Article 9 covers funds with a specific sustainability-related investment objective. The challenge is that Article 9 products, also known as "dark green" funds, are hard to find, and the supply is still limited. Many institutions are reluctant to offer Article 9 products due to fears of greenwashing and related regulatory risks.

Abdullah Melik Yildiz: How do you view the market for voluntary CO2 certificates (VCCs) and the role of Article 6 certificates?

Simon Tribelhorn: The VCC market has faced significant criticism in recent years. With Article 6 certificates, a new generation is emerging that prevents double-counting of certificates. This will strengthen the certification market. There is great interest in offsetting unavoidable CO2 emissions. The key step is to reduce CO2 emissions, but for unavoidable emissions, certificates are a necessary solution to achieve net-zero targets.

Abdullah Melik Yildiz: What role do blockchain and AI play in your sustainability strategy?

Simon Tribelhorn: Blockchain and AI are essential tools. We are working on projects that use blockchain to measure CO2 impact in real-time and generate certificates. This technology, combined with IoT devices, can significantly improve transparency and efficiency in CO2 compensation. Additionally, tokenized financial products can offer cost-efficient solutions that will gain importance in the coming years.

Abdullah Melik Yildiz: How do you address the challenge of education and awareness regarding these complex topics?

Simon Tribelhorn: Education and awareness are crucial. It is challenging to communicate complex topics such as sustainability regulation and technology. Customers expect a good customer experience, and it is our task to link this with meaningful sustainable investments. This provides a significant opportunity to position ourselves in the market and develop new business models.

Abdullah Melik Yildiz: Finally, what are the biggest challenges and opportunities for the banking sector in Liechtenstein over the next five years?

Simon Tribelhorn: The biggest challenge will be navigating the complex regulatory landscape while leveraging the opportunities presented by digitalization and sustainability. We see a great opportunity to lead in sustainable finance and innovative digital solutions. Our role as financial intermediaries will be to manage this transformation and efficiently link investors with private clients.

Abdullah Melik Yildiz: Thank you, Simon, for your insights. It was a pleasure speaking with you.

Simon Tribelhorn: Thank you, Abdullah. It was a pleasure for me as well.