Private banking is a financial service that is generally aimed at clients with a bigger portfolio than regular customers, such as high-net-worth-individuals (HNWIs). This latter group of customers seems to be the main focus of the Luxembourg banking industry, as clients with assets worth over five million euros represented approximately 80 percent of private banking in the Grand Duchy. Luxembourg has many specialized private bank branches from outside the country. An example of this is HSBC Private Bank, a division of the UK bank that was established in Luxembourg in 1977 and almost exclusively focuses on wealth management for HNWIs. The assets under management of the private banking sector of Luxembourg increased steadily in the last decade, having reached almost 600 billion euros in 2021.
When it comes to developments in retail banking, Luxembourg boasts high usage rates of online banking services and digital payments. In 2021, 82 percent of 25-to-34-year-olds in Luxembourg, for example, had used the Internet at least once for banking services. This was significantly higher than the overall online banking penetration in the Grand Duchy, which reached 72 percent in 2021. Debit or credit card transactions accounted for more than two-thirds of total payments in volume in the Grand Duchy of Luxembourg in 2021. Additionally, Luxembourg banks receive many (international) household deposits. Non-Luxembourgish household deposits in banks in the Grand Duchy were worth over 45 billion euros in 2021, underlining the international character of Luxembourg retail banking.