The Future of The FinTech Hub

Guillaume Boissy – 19 Feb, 2019 – European Perspective

currency, laptop, tech

‘FinTech’ suggests images of AI, Blockchain and App Development. But, as I learned at this year’s Paris Fintech Forum, the industry is as much about human need as disruptive technology.

Today, customers and businesses alike expect to be able to manage their finances digitally. Last year, KPMG found that; ‘In H1’18, global investment in fintech companies hit $57.9B’*

Across the 2-day conference, 145 exhibitors, 2700 attendees from 75 countries including 280 CEOs, discussed one of the world’s most rapidly growing sectors and its impact on society and industry; from government institutions to privately-run platforms.

Because of its fast-moving and adaptable nature, the sector has spurned a raft of creative businesses from start-ups to SMES and multinationals enabling people and companies, from central business districts to the most remote geographical areas, to manage their finances online.

This means the competition for locations globally to become the next big FinTech Hub, is fierce. For places looking to FinTech as their next inward investment focus, there are some key considerations to think about.

  1. Demand. There is not only high demand for FinTech products and services, but a more educated demand, so it’s vital that expertise is on hand to support FinTech businesses setting up in your location. Some of the current FinTech Hubs include London, New York and Singapore where there is already robust financial services industries which act as knowledge bases for FinTech Companies.
  2. Access to talent. A strong talent pool is highly important for FinTech businesses when looking at a location to set up their business. Being close to higher education facilities and centres of excellence helps the proposition for a place to grow as a FinTech Hub. Burgeoning FinTech Hubs need to be able to attract both Finance and Tech Talent. Business support programmes also help; locations such as Hong Kong have also set up specific FinTech Career Accelerator Schemes.
  3. Access to Capital. FinTechs will be looking for places that enable them to receive funding to scale-up their business and be part of initiatives and ecosystems that enable them to be part of a wider business community. Access to capital investment either from Government ran programmes or privately (such as VC, private equities or angel investors) is key to any location looking to FinTech inward investment.
  4. Government Policies. Both Financial Services and Tech are some of the most complex and highly regulated industries in the world. Therefore, public policy and the role of regulation in your area has huge influence in attracting FinTech businesses. Policy which offers protections and assistance, is a huge selling point for any place. For example, the FCA in the UK and the MAS in Singapore are cited as pioneers as they are currently at an advanced stage in deploying measures to support FinTechs such as dedicated support and the introduction of sandboxes. Saudi Arabia has also just announced the start of the design for a regulatory FinTech sandbox.

It has never been a more exciting, but more competitive, time to build a FinTech Hub, reflected in the below global Index.

Source: Deloitte’s ‘A tale of 44 cities Connecting Global FinTech: Interim Hub Review 2017’

If you would like more information on how we can support your FinTech business or your location as a FinTech Hub, get in touch

*KPMG ‘The Pulse of Fintech’ 2018 Report