Where Are The Fintech Hubs?

From London to South Africa


Of all the industries ripe for technological disruption, financial services is one of the most complex. Wholesale technological change is difficult and takes time to see widespread adoption outside of the most tech-savvy groups in society. Even so, fintech startups are booming and smaller, more agile companies are outpacing traditional banks in meeting the changing demands of the population. Be it sourcing investment, making transactions, or saving funds, fintech is already shaping up to be a huge industry. So, where are the global hubs driving fintech forwards?

Europe: London

Though its status as the world leading center of fintech had been called into question in the wake of the UK’s decision to leave the European Union, London has retained it’s supremacy. According to the Fintech50 - a global list decided by leaders in tech, finance, and fintech - 31 of the 50 most promising fintech startups call London home. On top of these, the Fintech50 hall of fame is made up of majority London startups, and of the 10 identified as ‘ones to watch’, six are based in the UK capital.

Of the $1,164 million in European fintech investments secured in the first quarter of 2017, research from Fintech Global shows that 36% went to London - some $421 million, well over double that of second-placed Berlin ($140 million). Whether London’s fintech scene can stay quite so far ahead of the intense European competition remains to be seen but, for now at least, it is proving resilient to the uncertainty of Brexit.

Asia: China

China’s relationship with innovation has always been complicated and inconsistent, often a fast follower rather than a disruptive force. It’s some way ahead on eCommerce and mobile payments, though, meaning its emerging fintech sector is bucking that trend. According to McKinsey and Co, by the end of 2015, China’s internet finance sector was valued at $1.8 trillion. Alibaba is something of a dominant force, but there are a number of fintech unicorns bursting onto the scene and capturing market share.

Several factors have contributed to China’s fertile environment for fintech. The first is its booming eCommerce, with some 30% of China’s 1.3 billion people now using e-payment systems. Secondly, the rapid expansion in smartphone usage means new fintech can be rolled out on an incredible scale with ease. Couple these with open support from the People’s Bank of China and the world’s most populated country is set to be a key player as fintech proliferates.

America: New York

According to research from Reuters, New York is second only to the UK in terms of fintech market size. Having been at the forefront of addressing the growth of cryptocurrency startups, New York has earned its place among the most exciting cities in the world for fintech innovation. In fact, in terms of investment, New York actually outstrips London, with only California seeing more money being piled into emerging tech.

As a leading global financial hub, New York is home to some of the largest and most established financial services institutions, many of which are actively and generously investing into a plethora of fintech startups. Proximity to Wall Street is more symbolic than it is an actual driver of growth, but New York’s fintech scene will be hoping to emulate its more traditional financial neighbours going forward.

Africa: South Africa

Though digital innovation is most often associated with the likes of Silicon Valley and some European cities, Africa as a continent is establishing itself as a contender. According to a report from Disrupt Africa, more than 300 fintech startups are currently active across the continent - after a boom over the last two years in particular - disrupting the existing incumbents and attracting the attention of investors.

The startups are spread across the continent, with the southern, western, and east African regions active (north lags behind somewhat). South Africa, though, is by far and away the number one hub in the region, being home to 31.2% of all African fintech startups. With so many of Africa’s citizens unable to access basic financial services, the work being done by innovative fintech startups could have a significant impact on a continent seeing rapid smartphone adoption. 


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