Frankfurt Marathon

Frankfurt Marathon – Runners Celebrate after 42.195 KM

On Sunday, October 30, 2016, runners from 104 countries tested their endurance in the 35th Frankfurt Marathon. Behind the Germans, the French and British, with 589 and 360 runners respectively, made up the largest participant groups. In addition, runners from Belarus, India, Madagascar and even one from Greenland were drawn to the marathon in the Mainmetropolis. Thirty percent of the 15,850 participants, the second most in the race’s history, came from abroad for the sporting event and combined their experience with shopping, museum visits and even an early Glühwein. For the prominent field of professional runners, the Frankfurt Marathon is particularly popular. Due to its generally flat course, with a total elevation change of only 27.8 meters, the Frankfurt Marathon is considered the third fastest course in the world. Thanks to the many professional athletes from around the world, the Frankfurt Marathon is the only German city besides Berlin that has been awarded a Gold Label from the International Association of Athletics Federations.

According to the Frankfurt police department and event organizer estimates, around 500,000 spectators came to watch the race and enjoy the nearly 100 parties featuring bands and DJs along the course. The marathon came to an end after 42.195 kilometers in Frankfurt’s Festhalle, where runners crossed the finish line and continued on to a red carpet leading to the finisher’s party. Participants celebrated their accomplishment in a disco atmosphere with music, lighting effects and the enthusiasm of the spectators. The last runner crossed the finish line at 4:25 PM, marking the close of 2016’s Frankfurt Marathon. At the Festhalle, around 7,000 people watched broadcasts from the race, the awards ceremonies and, of course, further enjoyed the huge party to honor the finishers of the 35th Frankfurt Marathon.

FinTechGermany Award

CFS Survey: the issue of cyber security must be on every financial industry agenda

The issue of cyber security is of central importance. Germany’s financial industry is in firm agreement on this point, attributing it a significance of high (20%) to very high (75%). This is shown by a current survey of financial institutions and service providers in the Financial Centre Germany conducted by the Center for Financial Studies. However, the industry is also largely in agreement (78%) that the issue is not being sufficiently addressed at the moment.

Most of the financial industry only expecting some measure of support from FinTechs

Only 8% of the survey participants expect significant support from FinTechs in the area of cyber security. Half of them (51%) believe their company will receive at least some measure of support. On the other hand, 29% are anticipating little support from FinTechs, and 7% none at all “The issue of cyber security is a key topic for the future, and in fact it is tailor made for young technology companies. I therefore expect we will soon see more start-ups in this area,” Professor Volker Brühl, Managing Director of the Center for Financial Studies, interprets the results.

Cyber security can become a competitive factor in the future – Establishing European data centres is seen as important to crucial

The large majority of the financial institutions (86%) is in agreement that the issue of data security can become a competitive factor for financial service providers. Only 12% do not believe this is a relevant point. Since a large amount of data from European users is stored by social networks in the US, the necessity of providing data centres for critical data in Europe is under discussion. The majority of the financial industry (59%) believes it is important to establish such data centres, while 26% regard this as crucial. On the other hand, 12% see little relevance in where data centres are located.

“The study demonstrates how important a world-class data infrastructure is for today’s financial sector. The Financial Centre Frankfurt sets the bar pretty high with dozens of data centres and the DE-CIX internet exchange. More than half of the German data centres are located in Frankfurt and the surrounding region. Our status as the Data Capital of Germany is irrefutable and makes us an even more attractive location for FinTechs,” comments Hubertus Väth, Managing Director of Frankfurt Main Finance e.V.

Bitcoins not expected to gain in importance as a payment method in light of data security concerns

Bitcoins are supposed to be particularly suited to preventing hacker attacks in payment transactions. However, the majority of the financial industry (73%) does not expect bitcoins to gain in importance as a payment method in light of such concerns.

CFS Index

CFS Index rates future international importance of the Financial Centre Frankfurt very positively

Significant job cuts at financial institutions – Significant job growth at service providers

The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, rises by 0.3 points to 110.6 points in the third quarter of 2016. Though the value remains almost unchanged, it comes as a result of sharply contrasting developments of employee numbers at the financial institutions and the service providers. While the measure of employee numbers at the financial institutions is at a historic low since the Index surveys began in 2007, the service providers are stepping up hiring. Aside from this, the financial industry as a whole is recording growth in revenues and earnings. The financial institutions in particular, after considerable declines in earnings in the first half of the year, now report a clear increase that surpasses expectations. The growth in investment volume declines slightly, but remains at a solid level.

“The figures reflect structural changes in the banking industry’s mode of production, particularly with regard to rising capital intensity and falling employee numbers. Conversely, employee numbers at the external service providers are on the rise, partly due to the trend toward digitalization,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

Financial industry rates the future international importance of the Financial Centre Germany very positively

Following the Brexit vote, the rating of the future international importance of the Financial Centre Germany had reached a historic high of 136.8 points in the second quarter. This value remains at an above-average level of 128.3 points in the third quarter, despite falling by 8.5 points. Dr. Lutz Raettig, President of Frankfurt Main Finance e.V. emphasized, “The results of the study show that there is still great trust in Frankfurt’s capabilities as a leading Financial Centre. Our function as a bridge between London and the EU and our constructive handling of Brexit will strengthen Frankfurt as the most important Financial Centre in the Eurozone.”

Job cuts hit financial institutions more strongly than expected, and further cutbacks in personnel are anticipated

The extent of job cuts at the surveyed financial institutions turned out to be even larger than expected in the last quarter. Previously the number of employees had remained stable at a neutral level. Now the employee numbers sub-index for the financial institutions falls by -13.7 points to a historic low – since the start of the survey in 2007 – of 86.0 points, and the financial institutions are expecting the situation to degrade further still in the current quarter. By contrast, employee numbers at the service providers are developing even more positively than expected. The corresponding sub-index improves significantly on the previous quarter, rising 11.8 points to 116.9 points. The service providers are even more optimistic regarding the fourth quarter.

Revenue growth for the financial institutions

The growth in revenues/business volume among the surveyed financial institutions turns out to be slightly higher in the third quarter of 2016 than was expected in the previous quarter. The corresponding sub-index rises by 2.5 points to 109.6 points. As expected, the service providers also maintain their high level of revenues, slipping just -1.0 points to 119.7 points, and they are anticipating increased revenue growth in the current quarter.

Financial institutions stop decline in earnings – Financial industry takes a positive view of the current quarter

In terms of earnings, both groups report growth in the third quarter. The financial institutions in particular, after considerable declines in earnings in the first half of the year, now report a clear increase that surpasses expectations. The corresponding sub-index for the financial institutions rises by 7.0 points to 103.9 points; the service providers’ sub-index climbs 2.2 points to 115.3 points. Both groups have a positive outlook for the current quarter.

The growth in investment volume in product and process innovations declines slightly, but remains at a solid level. For the financial institutions, this sub-index falls by -2.2 points to 110.1 points, contrary to expectations. The service providers’ sub-index remains stable, slipping just -0.4 points to 112.2 points. As a result, the two groups are still at an almost equal level, with neither anticipating any major change in the current quarter.

Frankfurt FinTech

Frankfurt FinTech Report #3

The Frankfurt chapter of Startup Grind hosted their eighth event in the Financial Centre on Thursday, October 13, 2016. Startup Grind is a global community in which local chapters organise monthly events featuring successful local founders, educators and investors who share lessons learned on the road to building great companies. October’s event featured a fireside chat with Ivonne Arold, COO and Head of Funding at Peermatch, a Frankfurt FinTech company and Frankfurt Main Finance member. For 20 years, Ivonne Arold held management roles in the capital markets divisions of international investment banks. Despite her success working for traditional banks, she decided to transition to the Frankfurt FinTech scene and joined Peermatch in 2015. During the fireside chat, moderated by Startup Grind Frankfurt’s Director, Dr. Osman Sacarcelik, she described the differences between the start-up culture and life in a big bank. Arold explained that she did not miss the formality and glamour of the big bank and enjoys the balance found in the start-up environment.

Peermatch is a mortgage lending app allowing investors to directly invest in loans and receive risk-adjusted yields. There is always an underlying property value and borrowers enjoy low capital market rates. The platform was originally intended for institutional investors and commercial borrowers; however, Peermatch intends to roll out products for private borrowers and investors in October 2016. They hope to capture the digital affine segment on the retail lending side who prefer doing business online or have become dissatisfied with brick and mortar institutions. Arold explained that they think Peermatch will be able to attract these customers with the ease of the platform and competitive rates.

The company aims to handle as many processes on the app as possible. Peermatch’s proprietary Cryptographic Chat Search Engine which ensures the secrecy and privacy of all communications made over the app. Although creditworthiness is evaluated traditionally, customers’ first interactions are with a robot before being quickly transferred to the appropriate Peermatch representative.

On the commercial side, Arold explained that these customers would normally need a couple of partners to complete their financing; for example, a bank for a loan and other partners for mezzanine capital. The Peermatch system is designed to be a one-stop-shop for the borrowers and Peermatch will organize the different investors. According to Arold, the borrower just needs to complete the requisite credit paperwork and they will organize the rest. Investors so far include German insurance companies and pension funds looking for safe investments with positive interest rates. Family offices and UK investment funds have financed riskier parts of loans. Arold clarified that Peermatch differs from Asset Backed Securities in that investors are buying risk in individual loans, not bundled, tranched or packaged products.

The Future of Frankfurt FinTech

Peermatch recently became the first FinTech Member of Frankfurt Main Finance. This new membership is an important step in Frankfurt Main Finance’s efforts to advance and support FinTech in the region, currently home to nearly 60 FinTech companies. Arold was quick to emphasize the importance of developing a rich FinTech ecosystem in the Financial Centre. “We welcome every FinTech that settles here in Frankfurt. […] It is important to have other FinTechs around, to exchange and to work cooperatively together. Every FinTech has its one business area, so maybe in a couple years’ time it will be time to collaborate and find which pieces fit together.” Furthermore, according to Arold, Frankfurt’s Financial Centre and infrastructure “predestines it to become the leading FinTech hub in Germany or possibly Europe.”

Frankfurt FinTech Report #2

Catch up on recent goings on in the Frankfurt FinTech Scene with the FinTech Report!

FinTech Bachelor Kicks Off at Frankfurt School and FinTech Group AG

The first group of students in Europe’s first dual Bachelor degree “Digital Innovation and FinTech” have begun their studies. The study program was brought to life by Frankfurt School of Finance & Management and the FinTech Group AG. Currently, students are in an orientation module at FinTech Group AG. During this period, they work with a mentor who guides them through work in various departments and projects in order to gain different perspectives on the diverse FinTech landscape and applications.

New Membership for FinTechs

Frankfurt Main Finance has introduced a new membership level, FinTech Member. As part of their ongoing effort to promote the FinTech scene in the Financial Centre Frankfurt, FMF hopes that this new membership will help to bring promising start-ups from all across Germany closer together with the established finance community. The first FinTech Member is Peermatch Management GmbH. Read more about the new membership level here.

Between the Towers

On October 4, 2016, main incubator’s monthly event, Between the Towers, took place at the Goethe University. This month’s speakers and pitches focused on blockchain technology. The evening’s keynote, Dealing with Disruptive Technologies: A Blockchain Case Study, was delivered by Philipp Harrschar and Daniel Scheu of Zühlke Engineering. This was followed by a panel discussion moderated by Sven Koschinowski of KPMG, sponsors of the event, with Frank Brigge of Commerzbank, Burkhard Blechschmidt of Cognizant, Johann Horch of niiio, Dr. Matthias Terlau of Osborne Clarke and Philipp Harrscharr. Before networking and discussing the night’s presentations over cold beers, the audience enjoyed pitches from Quantoz, Berries, Diversifaktor and Blockchain Helix. Between the Towers is held on the first Tuesday of every month and is one of the most popular, well-attended FinTech events in Frankfurt.

Frankfurt Main Finance introduces new Fintech Membership

On October 5, 2016, the general assembly of Frankfurt Main Finance passed a resolution to introduce a new membership for FinTech companies. This creates a third membership level in addition to the existing levels of Regular Member and Sustaining Member. FinTech Members can be FinTech companies from all over Germany which fulfil certain criteria. Potential FinTech Members should have no more than 50 employees and the company should be younger than five years old. FinTech Members can participate in General Assembly meetings but are not entitled to vote. They will receive regular updates on the association’s activities and work. Dues for the FinTech Membership are 500 Euros annually for the first three years.

Frankfurt Main Finance’s first FinTech Member is Peermatch Management GmbH, a subsidiary of the Amsterdam FinTech, Peermatch B.V., located in Frankfurt am Main. The basic idea behind Peermatch is to transform mortgage lending so that every market participant enjoys a maximum degree of mobility and always stays in control. The Peermatch ecosystem is put together to conduct mortgage lending under the different legal regimes in the European market.