The European financial sector is witnessing a tectonic shift resulting in the relocation of continent’s fintech hub. Until now, London has been the financial hub of the entire continent. The United Kingdom boasted of housing some of the best fintech companies developing cutting edge products. However, Brexit has poured water over the country’s big plans.
With Britain’s eventual exit from the European Union, the focus of fintech market has shifted from London to Berlin. The change is evident in the German Finance Ministry’s recent report. According to the report, even tough Brexit has made German look much favorable in the eyes of financial companies, it is not completely responsible for the country’s emergence as a fintech powerhouse.
The data presented in the report shows that the country has about 433 fintech companies within its borders, out of which 346 are active. These companies operate in a range of fintech sectors including financing, asset management, crowdfunding, crowdlending, blockchain technology and more. Previous year’s figures indicate that these platforms have handled over 270 million euros worth of funds in one year.
The blockchain technology is favored in the financial and banking industry for its potential to enable automation of various operations. The importance of automation is visible in the finance ministry’s report as well. Compared to standard financial platforms, automated robo-advice platforms seem to have fared well. The total funds managed by these stands at over 360 million euro, which is over 90 million euros higher than the other sectors put together.
The same report also forecasts, the German fintech segment to reach 58 billion in the next three years. By 2025, the fintech industry in Germany is expected to reach 97 billion euros and then 148 billion by 2035. The accelerated pace of fintech growth is attributed to growing cooperation between the mainstream banking and financial sector and new-age fintech firms.
With increased cooperation between traditional financial institutions and blockchain based fintech institutions, the German banks are more likely to implement distributed ledger technology into their operations much before their foreign counterparts.
Ref: Crowdfund Insider | Image: Shutterstock