Financial Centre Focus: “Brexit – Let’s go Frankfurt”

Financial Centre Frankfurt the preferred destination for Brexit-induced job relocation

In a comparison of European financial centres, Frankfurt clearly ranks in second place behind London. With numerous qualities in its favour, the German banking centre is an attractive location for domestic and international players in the financial sector and has the potential of becoming the preferred destination for Brexit-related job relocations. The following assets that Frankfurt possesses are of particular benefit: The stability and strength of the German economy, the headquarters of the ECB in its dual function, a transportation hub with a good level of infrastructure, relatively low office rents as well as a high quality of life. This is the conclusion that Helaba’s economists arrived at in their Financial Centre Study “Brexit – Let’s go Frankfurt”. But it has serious competition in the shape of Paris, Dublin, Luxemburg or even Amsterdam.

Dr. Gertrud Traud, Helaba’s Chief Economist and Head of Research, stresses: “If Frankfurt really is to become the principal winner of Brexit, it will require a concerted effort on regional, national and European levels as well as a more self-confident approach.”

Forecast for banking sector employment 2018: Stable at around 62,000 jobs

In addition, a further improvement in the conditions offered by the city is essential to ensure its success. In view of Frankfurt’s excellent position in the framework of European financial centres, demonstrated by various studies, Helaba’s economists believe that it has good chances of picking up at least half the jobs in the financial sector that will be shifted from London to Frankfurt in a restructuring process lasting many years. Thus, Frankfurt now faces the task of putting the necessary prerequisites in place, e.g. in the housing market. Based on very cautious assumptions, a total of at least 8,000 employees would come to Frankfurt over a multi-year period. Since companies cannot wait for the outcome of negotiations, more than 2,000 jobs are expected to be relocated by as early as the end of 2018 already.

“This Brexit-induced effect on the labour market will act as a counterbalance to consolidation in local banks”, says the author of the study, Ulrike Bischoff. Both effects should, more or less, cancel each other out within the forecasting window. By the end of 2018, the study anticipates a total of just over 62,000 bank employees in the German financial centre.

The complete Helaba study is available for download here.

Digital Hub Initiative

German Government Appoints Financial Centre Frankfurt Digital Hub for FinTech

At the German National IT Summit on November 17, 2016, Germany’s Federal Minister for Economic Affairs and Energy Sigmar Gabriel and Bitkom President Thorsten Dirks introduced Germany’s first five Digital Hubs. The Financial Centre Frankfurt has been appointed as the Digital Hub for Financial Services and FinTech. Hessian Economics Minister and Frankfurt Main Finance Executive Committee member Tarek Al-Wazir praised the initiative at the opening of Frankfurt’s new FinTech Hub, Tech Quartier. Explaining the importance of FinTech for the region, he stated, “the continent’s leading Financial Centre must also take the lead in the highly innovative FinTech sector.” The opening of Tech Quartier marks the culmination of nearly a year’s work from the Hessen Ministry for Economics and the FinTech Dialogue Forum, which was initiated by Frankfurt Main Finance.

The Digital Hubs Initiative, dubbed de:hub and set forth by the Federal Ministry for Economic Affairs and Energy, aims to promote Germany’s strengths as a leading industrial nation and position it as an attractive destination for entrepreneurs, investors, and highly specialised workers from around the world. Bitkom President Thorsten Dirks explained about the hubs, “In the future, executives from established companies will be able to learn from start-ups in these hubs instead of needing to fly to California.” Other Digital Hubs are Dortmund and Hamburg for logistics, Munich for mobility and Berlin with a focus on the Internet of Things.

Even in the digital age, cooperation between start-ups and established businesses and academics functions better in close proximity and promotes innovation. Using Silicon Valley as a touchstone, the Federal Ministry for Economic Affairs and Energy seeks to create digital hubs in Germany where people from all over the world can meet to develop innovative ideas and products. Crucial for a Digital Hub is its existing infrastructure, namely global relevance in the appropriate sector branch, leading academic and research institutions, and a network of supporters ranging from mentors to VC investors.

The Frankfurt FinTech ecosystem has continued to grow over the past years. In 2016, the number of FinTech companies in the Frankfurt region has grown by 45% to 81. Frankfurt is now a close second to Berlin which is home to 87 FinTech companies. Investment in German FinTech is also on the rise. In 2015, German FinTechs drew 524 million euros in funding. Despite a global decrease in FinTech funding, Germany still saw an increase in the second quarter attracting $186 million in funding, placing Germany ahead of the UK. While the Frankfurt FinTech ecosystem is still very much becoming established, a broad base of institutional support and incubators have surfaced in the past years. In addition to the newly opened Tech Quartier, Frankfurt is also home to several other incubators and accelerators, including Deutsche Börse’s FinTech Hub, Goethe University’s Unibator, Accelerator Frankfurt, Main Incubator, FinTech Headquarter and Deutsche Bank’s Digital Factory. Frankfurt Main Finance continues to actively support and promote the Frankfurt FinTech ecosystem and applauds the Federal Ministry for Economic Affairs and Energy for naming Frankfurt the Digital Hub for FinTech as part of the Digital Hubs initiative. Finally, Frankfurt Main Finance’s newly created FinTech membership should help to further promote local FinTechs and help connect them with established players in the Financial Centre.

Crumbs or Pie? How much will Frankfurt’s property market benefit from Brexit?

A recent study from Deutsche Bank Research has just been released which outlines the potential effects of Brexit on Frankfurt’s property market. The study examines the Financial Centre Frankfurt’s office and residential markets, current and future pricing trends, as well as trends in demand and availability. Furthermore, the analysis from Deutsche Bank compares several European financial centres, showing that Frankfurt is in several ways an obvious and affordable choice for financial services relocated from the United Kingdom.

Executive Summary

“In view of the high level of political uncertainty surrounding the United Kingdom’s decision to leave the European Union, it will be some years until the size of the Brexit pie, i.e. the relocation of companies and employees, can be determined fully. Regardless of the final outcome of the negotiations between the UK and the EU, the city of Frankfurt is likely to benefit.

Frankfurt is already continental Europe’s main financial hub, and compared to other European cities, it can boast a range of additional advantages such as low rents and residential property prices, good infrastructure and a highly dynamic economy. However, considering the strengths of its European and also non-European competitors, Frankfurt will end up with only a piece of the Brexit pie.

Frankfurt’s property market would gain considerable momentum even if only a relatively small number of British companies and employees moved here. Growth in employment in the wake of Brexit should stimulate demand for office space, thus contributing to a reduction in vacancies and rising rents in the office market close to the city centre. Following the referendum on Brexit, we have raised our average rent increase expectations in the top segment to over 2% per year by 2020 (double what had previously been anticipated for the 2018-2020 period).

Bottlenecks have existed in the housing market for some years. A large demand overhang – the shortage of housing runs to several tens of thousands of homes – and a lack of undeveloped land are the main reasons why prices have risen by around 25% since 2009. An additional Brexit effect could drive prices up significantly. The rule of thumb in this context is the price per square metre increases by EUR 25 for every 1,000 missing homes. Assuming additional demand for 5,000 homes, residential property prices will increase by EUR 125 or around 4% compared to current levels.”

The complete study from Deutsche Bank Research can be downloaded here.

Holland Fintech and Frankfurt Main Finance e.V. continue successful FinTech Matchmaking

Following their successful start in Amsterdam, Holland Fintech and Frankfurt Main Finance, continued their joint FinTech matchmaking on November 25, 2016. For financial services technology companies, access to foreign markets is of considerable importance. Frankfurt acts as a gateway for German FinTechs into the global financial world. This is also shown by the results of a recent EY study on the German FinTech industry, which shows how quickly Germany is catching up internationally and Frankfurt nationally.

With regards to Frankfurt and the entire Frankfurt Rhein-Main region, there is now a very positive climate for FinTech. With the launch of the Accelerator Frankfurt, the opening of the TechQuartier, the designation of Frankfurt as one of five German digital hubs and the awarding of the FinTechGermany Awards, the Financial Centre Frankfurt has impressively demonstrated its innovative power. The proximity to banks and regulators proves to be a locational strength for Frankfurt. Amsterdam is one of the most agile locations where innovations are adopted early. The event was proudly sponsored by ING DiBa and supported by Hessen Trade & Invest GmbH.

“Innovations arise when the best and most creative come together and learn from each other. That is why we are happy to support the event and look forward to the exchange,” says Željko Kaurin, Board Member at ING-DiBa.
Dr. Lutz Raettig, President of Frankfurt Main Finance, elaborated further, “Many German FinTech companies have successfully established their business models in Germany and are ready to take steps to expand internationally. Through our partnerships with leading financial centres around the world, we are able to support these efforts and work to position the Financial Centre Frankfurt as an attractive destination for foreign FinTech companies. Fintech Matchmaking events like these are a great platform for these young start-ups.”

About Holland FinTech

Holland FinTech brings together people and organisations, who believe that creating a level playing field in the financial ecosystem will drive innovation. And that connecting mature players to innovative start-ups across borders, will accelerate financial innovation to its full potential. Leaning on the strengths and strategic position of the Netherlands towards continental Europe, Holland FinTech will is building a technology based market place in global financial innovation.

 

About Frankfurt Main Finance e.V.

Frankfurt Main Finance is the Financial Centre initiative for Frankfurt am Main, the leading financial centre in Germany and the euro zone. The initiative has more than 40 members including the State of Hesse, the cities of Frankfurt and Eschborn, and dozens of prominent actors in the finance sector. Frankfurt Rhine-Main region offers young FinTechs attractive working and living conditions. The proximity to the established banks is also advantageous for these young start-ups.

Golden Garage

Top FinTech Companies honored with Golden Garage

Promoting the Frankfurt FinTech ecosystem would not be complete without recognizing some of the top FinTech start-ups for their accomplishments. On November 17, 2016, Frankfurt Main Finance, Business Angels FrankfurtRheinMain and WM Gruppe held the annual FinTechGermany Awards ceremony to present FinTech companies with a Golden Garage. Companies competed in four categories: Early/Seed Stage, Late Stage, Growth Stage and New entrant into Germany. The jury’s three most important judgement criteria were financial viability, scalability and exit-potential.

Guests filled the ground floor of the Pollux building which would host the inauguration of the Frankfurt FinTech Hub, Tech Quartier, later that evening. Certainly a symbolic location for the conferral of these awards, as the opening of Tech Quartier marks the culmination of months of work by Frankfurt Main Finance and other actors in the Financial Centre to promote Frankfurt’s FinTech ecosystem. Before the room would be consumed by the pomp and circumstance of state ministers and foreign delegates, it was transformed into a Golden Garage. This new concept should harken back to famous founders, like Jobs, Gates and Page, who worked tirelessly in their garages developing technologies that would later change the world. Rounding out the effect were golden tools across the tables and stage, where the awards – called Golden Garages- rested upon a pulpit of golden tires. Only the founders with the most promising and innovative business models would take home a Golden Garage, a symbol that should act as a signal to investors of the value and potential of these start-ups.

The top sponsor of this year’s FinTechGermany Awards was Deutsche Börse. Executive Board Member, Hauke Stars, explained, “We want to contribute to Frankfurt becoming the leading location for FinTech in Germany. To this end, it is critical that all involved work together to build up a community that is attractive to FinTechs and allows all actors to profit from one another.” Frankfurt has indeed developed a significant FinTech ecosystem and is now home to more than 50 FinTechs and several FinTech hubs, incubators and accelerators as well as a mass of regular events. Stars continued on the importance of these efforts and the Golden Garage, “The FinTechGermany Award helps to spotlight these efforts.” Other sponsors of the awards included EY, Baker McKenzie and the IHK Frankfurt.

The event began with opening words from Frankfurt Main Finance’s President, Dr. Lutz Raettig, who explained the importance of digitalization for the financial sector and economy. Commenting on the Financial Centre Frankfurt as a destination for FinTech Start-ups, Dr. Raetting stated that, “Simply put, we have a start-up ecosystem in Frankfurt and a great infrastructure which is practically second to none. Furthermore, we have what many cities do not, which is especially important for the FinTech sector, and that is the ability to test and experiment with new applications, because the end-users are in Frankfurt.”

Dr. Jens Zinke, Managing Director of Börsen-Zeitung, took the stage as master of ceremonies to introduce presenters as well as the Golden Garage winners. In his opening remarks, he discussed the growing importance of FinTech. According to Zinke, the first mention of FinTech in the Börsen-Zeitung was in 2014. He continued to state that FinTech is now a reality of everyday life and that, “in the past twelve months, there have been over 300 articles published about FinTech in the Börsen-Zeitung, or more than one per day.” This increasing relevance of FinTech underscores the importance of the FinTechGermany Awards and the support of the Financial Centre for the FinTech ecosystem.

The Golden Garage winnners for each category are:

Being honored with a Golden Garage is surely a milestone for these young companies, as is the opening of the Tech Quartier for the Frankfurt FinTech ecosystem. In his remarks, Andreas Lukic, Chairman of Business Angels FrankfurtRheinMain, discussed the importance of his work with Business Angels in supporting these young companies. “There is a large financing gap from several million to a few hundred thousand. We wanted to close this gap through our work with the dialogue forum. This prize is one of our best marketing instruments for this.” The FinTechGermany Awards play a critical role in attracting investors’ attention and helping to increase the flow of funding to the region and Germany. Without the necessary funding and support, start-ups would stagnate, not be able to scale, and the brilliant ideas of these innovative entrepreneurs could never be realized.

FinTechGermany Awards – And the Golden Garage goes to….

Business Angels FrankfurtRheinMain, WM-Gruppe and Frankfurt Main Finance honor top FinTech, InsurTech and RegTech start-ups.

Yesterday evening, this year’s FinTechGermany Awards were presented, along with a new concept and in an extraordinary event space. With this leading award, the Financial Centre Frankfurt not only recognized the most promising FinTech, InsurTech and RegTech companies, but cast a spotlight on them. In addition to the high ranking jury members and the creative FinTechs, this year’s award ceremony was made extraordinary by the astounding location and its décor. Everything stood as a symbol of the Golden Garage.

The idea of transforming the event space into a Golden Garage and giving the award a new form, succeeded in symbolizing FinTechs’ ideas. The awards sent a clear signal that the Financial Centre Frankfurt supports and values these companies and their creative power.

The Golden Garages were presented by Dr. Jens Zinke (Managing Director, Börsen-Zeitung), Andreas Lukic (Chairman, Business Angels FrankfurtRheinMain and Jury Chairman) and Dr. Lutz Raettig (President Frankfurt Main Finance). The FinTechGermany Awards ceremony took place in conjunction with the grand opening of the Tech Quartier, Frankfurt’s newest FinTech Centre on November 17, 2016. The jury, consisting of high caliber personalities and experts from finance, capital markets, regulation and FinTech, chose the winners from four categories: Early Stage, Late Stage, Growth Stage and Foreign New Entrant to Germany. Winners’ business models should show the most promise for future success and to add long term value to the marketplace. With a top sponsor like Deutsche Boerse Group, alongside other prominent companies and institutions like EY, Baker & McKenzie and the IHK Frankfurt, the awards were able to win over a broad base of support.

The founder’s prize also provides the start-ups with more access and visibility to investors, whether it be involvement at their founding, IPO or sale, or simply providing feedback on their intrinsic value.

The Golden Garage winners are:

 Seed/Early Stage: Scalable Capital

Scalable Capital’s proprietary technology uses forward-looking projections, based on recent market developments, to measure the level of risk in the ETF products the client is invested in, and then reallocates their portfolio according to their risk limit.

“We are very excited about this recognition. It shows that we are not only in tune with the smart private investors, but also that industry experts are convinced of the potential and value of our technology and our business model.” – Erik Podzuweit, Co-founder and Co-Managing Director of Scalable Capital

Late Stage: CRX Markets

CRX Markets is an independent marketplace for Asset-Based Financing solutions and connects Buyers, Suppliers, Banks and Institutional Investors.

 “We see our winning the FinTechGermany Award as a confirmation of our hard work over the past years and as a thank you to our corporate and banking customers for their trust in CRX. In the coming years, we would like to position CRX as a holistic liquidity platform for financing short-dated assets for our customers. In cooperation with banks, asset managers and family offices, we would like to make deep liquidity in all product classes available for companies, in order to depict transparent and competition oriented corporate financing.” – Moritz von der Linden, CEO of CRX Markets

Growth Stage: WebID Solutions

Heading the WebID Solutions Group, WebID Solutions GmbH is Europe’s leading provider of legally compliant online contract signature and identification products and a worldwide pioneer in the AML compliant face2face online identification segment.

“We feel this recognition strengthens us in our work and WebID’s international growth strategy. From our office in Frankfurt, we will continue driving our expansion together with our numerous WebID partners in 2017.” – Frank S. Jorga, Managing Director and Co-CEO of WebID Solutions GmbH

Foreign new entrant to Germany: Quantoz N.V.

Quantoz is a Dutch technology company that services open, decentralised concepts with pragmatic solutions. For this purpose, they create and implement blockchain-based applications.

“For Quantoz, Germany has been the most attractive market since the beginning and Frankfurt our preferred location. Using our software, banks are able to better able to support their corporate clients with financial handling of processes in conjunction with the continuing digitialisation of industry.” – Henri de Jong, Head of Business Development at Quantoz N.V.

The prize is a perfectly complements the FinTech landscape in the Financial Centre Frankfurt. Alongside the Dialogue Forum FinTech, being a founding member of the Global FinTech Hubs Federation and numerous other activities, the FinTechGermany Awards gave Frankfurt Main Finance another perfect opportunity to showcase the outstanding and innovative FinTechs in the Financial Centre Frankfurt.

 

Brexit Frankfurt Finance Summit

Decision time is here – Frankfurt Main Finance at the FT Banking Summit 2016

At today’s FT Banking Summit, Hubertus Väth, Managing Director of Frankfurt Main Finance, explained, “For London’s banks, the time for decisions has come. We believe that London should maintain its position as Europe’s leading financial centre; however, some operations will still need to relocate into the Eurozone. In this regard, Frankfurt is in the pole position. Most banks are not able to wait and see how the Brexit negotiations turn out because they need to start lengthy talks with regulators before they can move their operations. The risks associated with waiting are much too high. It is decision time and moves are being made.”

FrankfurtRheinMain GmbH and Frankfurt Economic Development GmbH joined Frankfurt Main Finance at the FT Banking Summit to promote the Financial Centre Frankfurt as the top destination for those who must leave London. The three organizations have worked in close cooperation for months, developing a constructive and solution-oriented approach to positioning Frankfurt as a bridge between London and the Eurozone.

The Financial Centre Frankfurt is particularly well positioned to attract banks and other financial services that must leave London for the Eurozone. Already one of Europe’s most important financial centres, Frankfurt is a regulatory hub, home to the ECB, EIOPA, ESRB and already a part of EBA. Boasting the world’s largest data exchange point, DE-CIX, and more than 1 million square meters of available office space at costs around thirty percent lower than Paris, Frankfurt’s infrastructure uniquely equips it to absorb a displacement from London like no other financial centre. Current estimates expect around ten thousand jobs to relocate to Frankfurt over the next five years.

FinTechGermany Awards honor top FinTech, InsurTech and RegTech Start-ups

On November 17, 2016, Business Angels FrankfurtRheinMain, Frankfurt Main Finance, and for the first time WM Gruppe (Börsen-Zeitung) will present the FinTechGermany Awards. The renowned prize for entrepreneurs will honor the most promising FinTech, InsurTech, and RegTech companies from the following categories:

  • Seed-/Early Stage
  • Late Stage
  • Growth Stage
  • Foreign new entrant to Germany

The first three categories are not exclusively limited to German FinTech companies.

The FinTechGermany Awards ceremony will take place in conjunction with the grand opening of the Tech Quartier, Frankfurt’s newest FinTech Centre on November 17, 2016 at 17:30. The main sponsor of the award is Deutsche Börse. Additional sponsors include EY, Baker & McKenzie and the IHK Frankfurt am Main.

The jury, comprised of the Financial Centre’s top actors and FinTech supporters, will award the prizes to the FinTech, InsurTech and RegTech companies whose business models show the most promise for the future success and to add long term value to the marketplace. The three most important criteria are financial viability, scalability, and exit-potential. The yearly presentation of the FinTechGermany Awards aims to promote the Financial Centre’s FinTech ecosystem and especially the flow of funding into the region. The founder’s prize also provides the start-ups with more access and visibility to investors, whether it be involvement at their founding, IPO or sale, or simply providing feedback on their intrinsic value.

Hauke Stars, Member of the Executive Board at Deutsche Börse , responsible for Cash Market, Pre-IPO & Growth Financing, explained, “We want to contribute to Frankfurt becoming the leading location for FinTech in Germany. To this end, it is critical that all involved work together to build up a community that is attractive to FinTechs and allows all actors to profit from one another. The FinTechGermany Award helps to spotlight these efforts.”

With regards to the Frankfurt FinTech hub, jury member and President of Frankfurt Main Finance, Dr. Lutz Raettig welcomes the awards, stating, “The prize perfectly complements the FinTech landscape in the Financial Centre Frankfurt. The new FinTech Centre will also benefit Frankfurt’s appeal to German and international investors. Regulators and practitioners will also see this as an advantage. Frankfurt is a global Financial Centre which presents entrepreneurs with the optimal conditions for developing their FinTech company.”

The head of the jury and Executive Chairman of the Business Angels FrankfurtRheinMain, Andreas Lukic, believes that holding the award ceremony in conjunction with the opening of the Frankfurt FinTech Centre sends a clear message. He explained, “This is the ideal environment for our activities. Through the awards, we can facilitate the somewhat difficult access to institutional capital and grants, as well as mobilizing private capital for these FinTech companies.”

The jury consists of:

    • Andreas Lukic, Executive Chairman, BA-FRM e.V., Investor/Entrepreneur, Frankfurt, Jury-Chairman & Award Coordinator
    • Franz Cong Bui, Chief Online Editor, Börsen-Zeitung, Frankfurt, Sector Expert
    • Dr. Marc Gille-Sepehri, SVP Product Management, FIS-Fidelity National Information Services Inc., Entrepreneur, New York City/Frankfurt, Finance and IT Expert
    • Eric Leupold, Head of Department Pre-IPO & Capital Markets, Deutsche Börse AG, Eschborn
    • Dr. Manuel Lorenz, Partner, Baker & McKenzie, Frankfurt, RegTech and Regulation Expert
    • Michael Mellinghoff, TechFluence, London & FinTech Forum Frankfurt, Fintech-Community-Insider
    • Simon Nörtersheuser, Co-CEO, Policen Direkt GmbH, Frankfurt, InsurTech Expert
    • Dr. Lutz Raettig, President Frankfurt Main Finance, Frankfurt, Capital Markets Expert
    • Christopher Schmitz, Partner EMEIA Financial Services, EY-Ernst & Young GmbH, Eschborn
    • Alfred Schorno, Global Head of Sales/Managing Director, 360T Group, Business Angel, Frankfurt, FinTech Expert

InsurTech continues to gain influence in Germany

German InsurTech start-ups continue to grow and attract more funding. A newly released study from EY shows InsurTech as a new rising star in the FinTech community. InsurTechs are financial technology start-ups that attempt to change the insurance industry and how customers access insurance products through digitalization. While other segments of the FinTech scene have been growing for several years now, InsurTech is still in its infancy.

According to the study, only four unicorns focus on the insurance industry and InsurTech only attracted $4.63 billion in funding globally between 2008 and 2015. In Germany, InsurTechs raised €53.52 million between 2012 and Q1 2016, most of this occurring in 2015. EY cites the surge in funding in 2015 as an indicator that the InsurTech segment will become more impactful in the coming years. Noteworthy representatives of German InsurTech are Friendsurance, Finanzchef24, Clark, Knip and Schutzklick who have all achieved series B funding as early as 2015. In addition, their funding accounts for €47.45 million or 88% of all disclosed funding to German InsurTechs. Drivers accelerating the expansion of InsurTech are connectivity and data, the consequences of the financial crisis with the resulting pressures on interest rates, and customer dissatisfaction with interest rates.

Commenting on the study, Dr. Lutz Raettig, President of Frankfurt Main Finance e.V., stated, “The growth in FinTech and InsurTech investment in Germany is a reassuring development. These entrepreneurs reimagine the financial industry and create technologies that will add value and efficiency not only for end consumers but also for established actors. Financial institutions are smart to recognize the importance of these start-ups. Frankfurt Main Finance is heavily invested in the development of Frankfurt’s FinTech ecosystem and has promoted the creation of FinTech hubs in the region. Sponsoring competitions like the FinTechGermany Awards should help to draw attention to these young and successful companies.”

The study further explains that InsurTechs in Germany and abroad have not been able to develop stand-alone business models, partially due to regulatory factors. However, the InsurTech market is still in its relative infancy leaving any ceiling still undefined. Many business models existing abroad have yet to be replicated in Germany. EY identified three areas they expect new business to grow from: Big Data and analytics, data driven products, and back office-supporting functionalities.

To this end, Christoph Schmitz, Partner at EY and one of the study’s authors, explained, “The insurance industry will be permanently transformed by digitalization and the changes for these companies will only accelerate in the future. Therefore, it is critical that they concentrate on digital business models and further develop their own in-house capacities. In-house Innovation Labs and Accelerator Programs will provide a platform for innovative and flexible testing of new business models.”

Concrete challenges for incumbents are already present and are expected to grow in the future. The study outlines the need of insurers to intensify their digitalization efforts and develop corresponding capabilities in-house. Most of all, the study urges insurers to make sure they do not lose their customer relationships. The study concludes, “Although the ‘monopoly’ of underwriting and risk ownership will stay with insurers for the time being, an ongoing inability to develop customer-centric products and services will sooner or later deprive insurers of their most value-adding services.”

The study is available for download on the EY Website.

New edition of Banking Business in Germany

The financial crisis, extensive regulatory requirements and the impending Brexit confront the international and national banking sector with daunting challenges. Yet, uncertain as the environment may be, the German market still offers opportunities to international banks and investors keen on setting up a branch or subsidiary in Germany.

The updated 5th edition of the guide to the Banking Business in Germany is a mine of information for international decision-makers and industry observers as well as bankers from abroad, already located in Germany and their headquarters in their country of origin. In the current edition of the guide, which is written in English and runs to more than 400 pages, financial services experts from PwC and the Association of Foreign Banks in Germany elucidate the manifold amendments and specifics of the German regulatory framework. They also furnish an overview of ongoing developments in the German banking system as well as deposit guarantees, labour law and taxation.

Equally beneficial for English-speaking banking representatives is a glossary, explaining common abbreviations in German banking usage, such as “GroMiKV”, short for “Großkredit- und Millionenkreditverordnung” or “Large Exposure Regulation”. No less helpful is a comprehensive index for easy guidance through the new publication.

At the book presentation on 14 October, Dr Andreas Dombret, member of the Executive Board of the Deutsche Bundesbank, addressed a large gathering of members of the Foreign Banks Association on the impact of Brexit on banking and banking supervision. His remarks highlight the relevance of these and other issues for international business leaders, who regard Germany as an important financial location now and especially in the future.

The 5th edition of Banking Business in Germany can be purchased here.