World’s leading financial centres, such as New York, London, Frankfurt or Singapore, do not always coincide with the centres of the fintech world. We created the Global Fintech Map – a report presenting where the most cutting-edge technology companies inventing financial solutions are established. Several examples of the ‘fintech cities and areas’ might come as a surprise to you. Do you know them all?
From this report you will learn:
- • Some top fintech centres are not so obvious.
- • To call yourself an expert of the global fintech scene, you have better start scanning not only the recognized fintech centers such as San Francisco, Shanghai, and London.
- • Take into account cities such as Boulder and Austin (in the US), Hangzhou (China), Bangalore (India), Lagos (Nigeria), Bristol, and Bath (the UK).
Global Fintech Map by Enterie
Why we prepared the Global FinTech Map?
At Enterie – the network of communication agencies that specialize in describing tech and fintech to the general audience – we believe in the importance of this sector. The reason is way more crucial than the convenience of the Western world:
- • About 1.7 billion adults worldwide remain unbanked
- • 2.5 billion adults (which is just over half of the world’s adult population) do not use formal financial services to save or borrow money.
- • Nearly 2.2 billion of these unserved adults live in Africa, Asia, Latin America, and the Middle East.
At the same time, it is estimated that more than 5 billion people use mobile phones (Pew Research and Data Reportal) from which more than half are smartphones. Soon the devices in their pocket might replace a traditional bank, a stock exchange provider, or a money lending office. The unbanked will no longer remain unbanked – just thanks to their mobile device and… fintech.
What is the ‘fintech capital’?
Disputes over the title of fintech “capital” continue:
We’ve researched more than a dozen reports on the fintech market. We’ve reviewed a number of “top 10”, “top 50”, and “top 100” fintech lists prepared by Forbes or the Financial Times. We’ve checked local “fintech maps” – reports such as “Polish Fintech Map” or “Swiss Fintech Startup Map”.
This allowed us to create the report that shows the distribution of fintech and certain trends – sometimes caused by completely prosaic reasons like too expensive lease costs or difficulty in reaching specialists.
In other situations, it is about intricate legal issues, geopolitics, or social conditions – such as the percentage of people with smartphones who do not have access to traditional banking (as mentioned in the introduction) or the number of micro-enterprises.
But first the things that should go first:
What is fintech?
Fintech (sometimes referred to as FinTech) is an abbreviation of ‘financial technology’. Those are all technologies that allow us to pay with different currencies at no extra cost via phone or face scan, to make payments within seconds, and to invest in stocks or in bitcoin. In short, they are changing traditional financial methods for those using cutting-edge technologies (apps, automated advice, touchless payments).
(Source: Rory Van Loo, Making Innovation More Competitive: The Case of Fintech, 65 UCLA Law Review 232 (2018), https://scholarship.law.bu.edu/faculty_scholarship/50/)
The US Chamber of Commerce mentioned the most popular areas fintech work in. Those are:
- • Mobile wallets and payment apps,
- • Crowdfunding platforms,
- • Cryptocurrency and blockchain technologies,
- • Robo-advisors,
- • Stock trading apps,
- • Insurtech companies.
How much is fintech worth?
The fintech market will be worth nearly $310 billion by 2022, say the authors of the “FinTech Global Market Report 2020.” According to the KBV Research report, the global Digital Lending market alone will be worth $11.6 billion by 2025.
In terms of continents, the fintech capital is North and South America, where nearly 5,800 fintech companies existed as of March 2019. The EMEA area (Europe, Africa, Middle East) had 3,500 such companies and the APAC (Asia Pacific) had 2.8 thousand.
So, let’s start our journey through straightforward and less obvious fintech centers. We did our best to get the finest and most updated information. If any important regions are missing or you find another issue, please let the author know at firstname.lastname@example.org or tag us via Twitter.
FinTech Map in North America
The areas that are associated as those leading the way in the finance and technology industry are, of course, New York and San Francisco Bay Area. This is an accurate guess, but those are not the only places where “the fintech is made”. The USA is home to 22 of the top 100 fintech companies according to the Crunchbase platform.
Atlanta, Charlotte, Austin, or Boulder are places vying for fintech supremacy, too. They offer numerous incentives to attract fintech companies right there.
Atlanta Technology Village is the fourth largest technology center in the US. Also, the FinTech Atlanta initiative aims to cement Atlanta as the accredited global capital of financial technology. – “Atlanta will become the recognized global home of fintech by 2020, just as New York and London are the recognized headquarters of finance” – said Scott Meyerhoff, Immediate Past Chair of the organization a few years ago. And it is doing well indeed.
While most of us probably do not perceive Atlanta as such an impactful player in fintech, despite the COVID pandemic fintech companies in Georgia generated more than $72 billion last year.
Atlanta | ©AdobeStock
Charlotte, North Carolina
The Queen City Fintech Accelerator Program has been established in Charlotte. It offers trainings, meetings with the region’s top companies, and startup discounts. The city boasts of a low cost of living, attracting in this way new entrepreneurs.
The capital of Texas is proud of being home to more than 130 fintechs, but there are even more tech companies in Austin – about 6,000. They account for 13.6 percent of local employment (that’s double the average for the entire United States).
Austin | ©Carlos Alfonso, Unsplash
Boulder and Denver, Colorado
An even higher percentage of jobs in the financial industry (15 percent) is reported by the Colorado cities of Boulder and Denver, more and more often referred to as the “Wall Street of the West.”
The lure for fintech companies includes the lowest income taxes in the US (4.63 percent for corporate income tax rate). Colorado authorities say that thanks to the state’s strong small- and medium-sized business sector (more than 600,000 SMEs representing 99.5 percent of all companies), fintech companies are finding a niche in providing these companies with innovative insurance, payment, lending, or accounting solutions.
Boulder | ©AdobeStock
The tweet below – posted just after our Report’s publication – also shows the importance of the region:
Calgary, Alberta (Canada)
– “Frequently ranked as one of the top places in the world to live, Calgary is aggressively transitioning to a leader in advanced technologies” – reports for our blog Gregg Aamoth, CEO of Popcodes. His company was one of the finalists at the Canadian FinTech and AI Awards (FinTech Startup of the Year).
– “Focus and funding are shifting from its legacy in Oil and Gas to better support start-ups in IoT, big data, life sciences and agriculture. Recent success stories include Shareworks, Attabotics, and the latest unicorn, Benevity” – says Gregg Aamoth.
Fintech companies such as PayTrie (cryptocurrencies’ exchange platform), $53.2M-founded Symend and ZayZoon (real-time payments) are also based in Calgary, Alberta.
New York vs. San Francisco. Which is more fintech-friendly?
When it comes to fintech funding rounds, however, the San Francisco Bay Area is the undisputedly fintech centre of the United States. Local companies have raised over $13 billion in funding last year. The city won (increasing its position 11 places ahead) in the latest ranking of “The Global Fintech Index 2020”.
San Francisco | ©Hardik Pandya, Unsplash
– “While New York City may not boast as many fintech unicorns as San Francisco, the city has one undisputed advantage that keeps it from leaving the top spots in all possible rankings. It is the financial capital of the world. And of course, fintech institutions have to cooperate with market regulators, financial institutions and banks” – says Szymon Fiecek, member of a board at the Comperia, a fintech listed on the Warsaw Stock Exchange.
In New York, where most of the stakeholders are located at the southern tip of Manhattan – around Wall Street, and the World Trade Center – the spot became attractive for fintech startups, too.
This is also a communication hub:
– “I chose NYC because it is easy and quick to access from Helsinki. Also, in NYC there are plenty of startup/tech events happening all the time and in my case I needed to be close to media agencies which are located in the city ” – Erno Tauriainen, CEO of Reventures Group, told Enterie.com. He is a serial entrepreneur from Finland and former CEO of SPENT.
Isn’t NYC too expensive for fintech startups?
Yes, New York for many fintech companies – not just startups – has simply become too expensive. At the same time, the measure of a fintech’s success is often whether it has managed to establish itself in the US.
That’s why they are moving out to the aforementioned American cities or simply to different neighborhoods, in the case of NYC – further and further away from Manhattan.
This is what the British fintech Curve did. It is planning to hire 185 employees at its American headquarters. Encouraged by lower prices and local support (among others, tax amounting to $8.3 million), they decided to move to Brooklyn.
FinTech Map in South America
In Central and South America, the fintech scene of Sao Paulo (Brazil), Buenos Aires (Argentina) and Mexico City, the capital of Mexico, is worth following.
São Paulo, Brasil
No wonder the world’s 4th most populous city is home to nearly 60 percent of Brasilian startups and over 2,000 tech ventures – its local regulations (i.a. regulatory sandbox) and low taxes make it a perfect startup and fintech ecosystem.
Their most significant beneficiary is Nubank, the biggest Latin American digital bank.
Mexico City, Mexico
The next most populated city in the world, the capital of Mexico, has been racing against São Paulo not only considering the number of its inhabitants, but also in the ranking of the top world’s fintech centres.
As one can read in a precise summing-up of the last year fintech trend’s report prepared by The Startupbootcamp FinTech, “Mexico has a huge potential for entrepreneurs and FinTech startups due to different factors, such as unbanked population or the heavy-set use of technology. The increasing regulatory certainty in the FinTech industry also attracts foreign startups to expand their operations to Mexico.”
FinTech Map in Asia and Australia
Three respected research institutions (Cambridge University, Zhejiang University, and Sinai Labs) conducted a study to determine which cities are indeed fintech centres. The authors of the report came to completely different conclusions than those of the Crunchbase report. They found that four out of seven such cities are located in China – these are Beijing (first position), Shanghai, Hangzhou, and Shenzhen (positions 5 to7 respectively). The report determined three groups of cities, too:
- • the centres (Global Fintech Hubs) mentioned above, of which 7 were identified;
- • Regional Fintech Hubs, with another 30 cities included;
- • fast-growing markets (Emerging Fintech Hubs).
The number of fintechs and companies exceeding $1 billion valuation, regulations, and ecosystem were taken into account.
Not surprisingly, Asia rules the world of finance and technology. Beijing alone is home to 58 leading fintechs (such as JD Finance, Du Xiaoman Financial, and Qudian) that have collectively received over $21 billion in funding. Annually, 186,000 patents are filed by companies there.
Other leading fintech hubs might be not widely known, but they are important centers.
Shenzhen, for instance, has a great location as it is bordering with Hong Kong. While the city is mostly known for its first in China fully electrified public bus fleet, it is an important place for financial technology, too.
There is an important stock exchange located there, as well as Huawei and Tencent, an international technology and investment holding which is indirectly behind such computer games as League of Legends. Such corporations can draw on the local fintechs’ ideas and solutions.
Local science and financial institutions have even established Global FinTech Lab.
Shenzhen | ©Robert Bye, Unsplash
The city of Hangzhou, with a population of about 10 million, is no longer satisfied with being the home of Alibaba and PingPong (the payment platform that works with Amazon, Ebay or Shopify and is responsible for global transfers of $100 million a day).
It announced plans to build the first strictly fintech zone. By 2025, on 4.4 thousand square kilometers, 200 such companies are to have their headquarters there, including 10 with a valuation of over $1 billion.
Hangzhou | ©AdobeStock
Similar superpower plans – announced in January 2020 – make Shanghai. In this city in eastern China, the financial industry already generates 17 percent of the local GDP.
Shanghai | ©Bide Cui, Unsplash
TOP 10 to watch closely
The development of cities such as those below is also worth observing:
- • Hong Kong,
- • Guangzhou (China),
- • Manila (Philippines),
- • Mumbai,
- • Bangalore (India),
- • Bangkok (Thailand),
- • Kuala Lumpur (Malaysia),
- • Jakarta (Indonesia),
- • Sydney,
- • Melbourne (Australia);
Fintech in Africa
Due to numerous constraints, Africa is still waiting for its turn – but not idly. According to the “Global Fintech Hub Report” only two out of 30 fintech hub cities are located in Africa, and according to the “Global Fintech Rankings 2020” – six out of 100 cities.
However, the continent is worth watching closely. Some countries are even predestined to hand over the baton at some point. According to the World Bank data, the three largest African economies – Nigeria, Angola, and South Africa – play an important role in building the economy of Africa as a whole. And that’s where fintechs are also increasingly thriving.
Nigeria is one of the youngest societies and has a total population of 202 million. It also has a huge number of micro, small and medium enterprises – 37 million SMEs that accounts for 90 percent of all companies and creates 80 percent of jobs.
On top of that, 40 percent of the population does not have access to traditional banking services.
Such a business environment always supports the emergence of fintechs. However, there is no shortage of challenges: nearly one in three Nigerians does not have an ID; 55.6 million people have access to the internet. The natural capital of the local finance and technology scene is the country’s capital, Lagos.
Lagos | ©AdobeStock
Lagos is surpassed in developing a fintech ecosystem by only two cities: Kenya’s Nairobi and Cape Town in South Africa.
In Kenya, 90-95 percent of the population has access to a cell phone, so it’s no surprise that startups such as BitPesa (cryptocurrency), Alternative Circle, and UbaPesa (online lending) have sprung up in the capital – they all rely on the use of smartphones.
Nairobi | ©AdobeStock
Cape Town, South Africa
South Africa is introducing many laws to make things easier for fintechs. So far, strong representatives of the sector in Cape Town include JUMO, Yoco, Zoona, Fundamo.
Regulatory sandboxes, working groups and special funds launched by the Reserve Bank of South Africa are expected to support the emergence, so you need to follow what is on there.
Night Cape Town. Panoramic view | ©AdobeStock
FinTech Map in Europe
London in the European pole position. In a nutshell, this is how the presence of (major) fintechs in Europe can be described.
European Fintech Map
Bath and Bristol, the UK
But this is only a half-truth because local market cities like Bath and Bristol are trying to catch up with London. They are dominated by slightly younger companies, on average 3 years old (in other words, fintech startups).
There are 107 fintechs in the West of England, employing 3.4 thousand people.
– “The West of England is a vibrant and dynamic hub for innovation in professional services. FinTech brings together our region’s talents to revolutionise the way that the sector operates”, – says Tim Bowles, Mayor of the West of England (with hubs like Bath and Bristol).
Bath | ©Michael D. Beckwith, Unsplash
London, the UK
What London wins with are the largest and best-funded fintech companies.
The latest list of the top European fintechs (prepared by Sifted, the Financial Times and Dealroom.co on the basis of investment valuations) shows that 68 out of 153 those companies are based in London. In comparison: 22 are based in Paris, 20 in Berlin, and 9 in Stockholm. London is indeed a key fintech player in Europe.
On the other hand, we have to take into account who prepares a given report. In the identical ranking prepared by the American Forbes, only one fintech from outside the US is qualified for the top 50: London-based TransferWise, lately rebranded for Wise.
By the way, this rebranding is proving how communication, visual integrity, and public relations are important in the fintech sector.
London City | ©Nigel Tadyanehondo, Unsplash
Influence of Brexit on fintech in the UK
It will be interesting to see how Brexit affects the UK market as a whole. For now, well-known fintech N26 has pulled out of the country.
Recently, also brands such as Revolut, Curve, and Yapily are deliberating over relocation or creating new headquarters outside of the UK. Interestingly, they are all interested in finding a new home in Lithuania.
– “Outside of the UK, Lithuania has the second largest fintech hub in Europe. The local regulator plays a positive role in the fintech ecosystem, allowing Yapily to become a part of it” – says Stefano Vaccino, the CEO of Yapily.
In Vilnius, there are only about 500,000 residents, but the city boasts of 2,400 specialists working in the fintech sector, over 14,000 finance and insurance specialists, and over 21,000 IT specialists. With its low living costs and pro-fintech government approach, smaller cities such as Vilnius (and others, mentioned below) might play a more significant role between 2021-2025.
The top 15 European fintechs were founded in Berlin – including perhaps the best known, the aforementioned N26. It is a de facto bank in a smartphone whose value is estimated at nearly 3.2 billion euros.
Recently, the discussions regarding the fintech industry and Berlin were mostly focusing on the spectacular failure of Wirecard. However, the sector is still booming in the capital of Germany, and the potential growth of the entire industry means the growth of the Berlin fintech scene, too.
Berlin | ©Darko Pribeg, Unsplash
Stockholm has established itself as one of Europe’s leading scenes for fintech. A new report from Invest Stockholm, the official investment promotion agency of the city, shows that Stockholm is Europe’s third-biggest fintech hub, after London and Berlin.
The report has identified 400 fintech companies in Sweden. Out of them, 80 percent are located in the Stockholm region. According to Invest Stockholm, the Swedish capital is “widely recognized as one of the most innovative regions in the world” and is also “a global tech and startup hub, with the most unicorns per capita in the world after Silicon Valley”.
And while this might be a little exaggerated statement, examples of very successful fintech companies founded in Sweden include such recognized brands as Klarna, iZettle and Lendify.
While Stockholm “takes it all” in Sweden, in Scandinavia you might also observe Copenhagen (Denmark), Oslo (Norway) and Öresund region (which includes both Denmark and Sweden) as important and growing fintech centres.
Over 200 Polish fintechs are listed in the Map of fintech in Poland, which is believed to give the most comprehensive picture of the fintech industry.
“In the new reality – defined by the effects of the pandemic and the deepest geopolitical changes to be recorded over the last 30 years – Poland has more to offer in the FinTech sector than could have been expected just a few months ago” – we can read in How to do FinTech in Poland?
“A strong and innovative banking sector, an excellently educated team of experts (Poland is 38.5M country with several universities centers), a resilient FinTech ecosystem, strong presence of FAAMA companies (Facebook, Apple, Amazon, Microsoft, Alphabet), a well-developed sector of shared services centres developed by global financial institutions as well as more and more innovation-friendly financial supervision supported by the EU membership – all that constitutes a unique combination that determines the strength of Poland as an important FinTech hub” – the Report claims.
The same ‘centralization pattern’ works here in the same way as in the US: according to the map, 56.3 percent of companies in this sector have their headquarters in Warsaw.
– “Since 2011, we have been listed on the Warsaw Stock Exchange, which for purely practical reasons is another one to develop the company in Warsaw. Having our headquarters in the same city as our business partners and stakeholders, we save a lot of time. The same pragmatic mechanisms work here and in the United States or Western Europe” – says Szymon Fiecek, member of a board at the Comperia, adding that Comperia cooperates with 36 financial institutions, including 17 banks.
Brno and Prague, Czech Republic
As a fintech center, Prague offers a developing market of risk capital, positive business environment, high-level tech universities, a large number of ICT specialists, and high penetration of the internet and smartphones. Therefore, the number of fintech companies compared to the size of the city is high – however, the capital of the Czech Republic is still a relatively small city.
There are also several fintech companies located in Brno. Interestingly, some of them are only branch offices of the main headquarters in Prague. Brno is the city where conferences about technologies usually take place (e.g. FinTech Roadmap conference). There are high-quality technological universities there, too.
More and more Russian entrepreneurs are starting their fintech businesses. However, they usually prefer to open the banking accounts in Zurich, Amsterdam, and Singapore.
So, very often we would speak about Berlin-based or Amsterdam-based fintechs, which are in fact developed in such cities as Dubna, Novosibirsk or Ulyanovsk in Russia. (So not necessarily Moscow, which is just too expensive to operate).
European TOP 20 cities for fintechs
The next cities to be reckoned with are – no surprises:
- • Amsterdam,
- • Zurich,
- • Dublin,
- • Tel Aviv.
This cities are considered to be regional fintech hubs:
- • Barcelona,
- • Geneva
- • Brussels,
- • Milan,
- • Vilnius,
- • St. Petersburg,
- • Moscow,
- • Warsaw.
Fintechs usually develop best in large urban centers, which are also bases for traditional banking.
There are exceptions, however. Such cities are undoubtedly Frankfurt am Main or Madrid. They do not have a very strong fintech background. In these cases, it seems more important to choose slightly cheaper locations with strong startup ecosystems and proximity to academic centers, which guarantee an inflow of fresh blood into fintech.
Author of the Global FinTech Map:
Michal Rakowski (contact him on email@example.com) – Chief Network Officer at Enterie. As a Communication Specialist he has launched brands for local and international markets. He has also supported several FinTech companies, such as WorldRemit, Spoko.app, Lidya or Autopay. He teaches students about PR and startups at the AGH University of Science and Technology in Krakow, Poland.
- Bob Spoerl – President at Bear Icebox Communications (USA)
- Inna Anisimova – CEO of PR Partner (Russia)
- Linnea Karlsson – PR Consultant at Four PR (Sweden)
- Veronika Zahradníková – Business Development Manager at PRAM Consulting (Czech Republic)