Unique Concerts at the German Jazz Festival in Frankfurt

The German Jazz Festival in Frankfurt is known for its musical and cultural diversity. No other German festival can present so many unique, cross-cultural performances. True to the festival’s profile, first organized in 1953, the program brings together renowned German and international jazz musicians, for joint performances in one of a kind stage events and outstanding festival projects.

The event’s promoters also enable the young generation of jazz musicians to take a set place within the festival program. In this way, young musicians from Hessen are offered a platform. In the past, major jazz musicians began their careers at the German Jazz Festival in Frankfurt. In addition, the festival is characterized by a mixture of different styles, ranging from classical influences like gospel to modern elements like underground hip-hop and avant-garde jazz.

Through this concept of variety and the encounter between stars and newcomers, national and international artists, traditional influences and modern, experimental elements, the German Jazz Festival is a vehicle for exceptional performances and unique musical experiences.

This year, the festival, organized by Hessischer Rundfunk, takes place in its 48th edition. From October 25 to 29, more than a dozen concerts will take place in the Alte Oper, the Musonturm and the Hessischer Rundfunk. The German Jazz Festival will also be broadcast live on hr2-Kultur and later on hr2-Live Jazz.

Six new members join financial centre initiative Frankfurt Main Finance

The financial centre initiative Frankfurt Main Finance e.V. continues to grow. Bain & Company, Deutscher Fachverlag, Skubch & Company and Oliver Wyman join the ranks of supporting members. Two start-up companies, Compendor and Raisin, have joined the initiative as new FinTech members.

With their membership, representatives from public administration, research institutes, the financial market and financial technology express their commitment to the Financial Centre Frankfurt and their dedication to furthering its national and international significance as well as actively reflecting on matters of current interest to the financial services industry.

The initiative is an especially sought-after conversation partner for Brexit-related matters. Since discussions concerning the United Kingdom’s withdrawal from the European Union began in April 2016, Frankfurt Main Finance has reached more than eight billion potential contacts with its messages. Over 1,700 different media in 93 countries have either conducted interviews with representatives of the initiative or published statements and comments released by Frankfurt Main Finance.

“The initiative has been able to convey Frankfurt’s function as a bridge linking the London financial markets with the European Union as an important message internationally,” says Dr. Lutz Raettig, chairman of Frankfurt Main Finance. “Frankfurt Main Finance’s communications highlight the numerous benefits which make the Financial Centre Frankfurt the destination of choice for many financial services companies moving parts of their business out of London.”

At the general meeting, Dr. Raettig thanked Frankfurt Main Finance’s many members and supporters for their commitment and welcomed the new board members. Moving forward, Frank Westhoff will represent the Frankfurt Institute for Risk Management and Regulation on the initiative’s board in lieu of Wolfgang Hartmann. Nick Jue succeeds Roland Boekhout as the representative of ING DiBa. Gerhard Wiesheu will represent Bankhaus Metzler in place of Johannes Reich. Dr. Cornelius Riese will replace Lars Hille as DZ Bank’s representative.

“By assigning their board members, our regular members highlight the significance of the work performed by Frankfurt Main Finance for the Financial Centre. We are thrilled by the great commitment shown by all parties involved who support us with Brexit-related matters as well as the city’s development as a FinTech hub and a renminbi centre,” says Dr. Lutz Raettig.

Baker McKenzie, GFT and Interxion AG will leave the initiative at the end of the year. Accordingly, the association has nearly 50 members engaged in supporting the Financial Centre Frankfurt.

CFS Index: Service providers expecting huge revenue growth in fourth quarter

Service providers expecting huge revenue growth in fourth quarter, despite a previous sharp decline. Job cuts at financial institutions on the rise again

CFS Index rises by 2.5 points; considerable movement at sub-index level

The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, rises by 2.5 points to 114.1 points. The positive development can be primarily attributed to the unusually high revenue expectations of the service providers for the fourth quarter. In addition, the financial institutions report that their revenues, earnings and investments have developed positively in the third quarter, while the service providers record declining growth in these areas. Employee numbers are also on a downward trend. Following a brief pause in the second quarter, the financial institutions step up their job cuts again and the service providers limit their recruitment.

“For the banks there are recognizable signs of improved productivity; reducing costs is the first priority here, and the service providers are feeling the effects,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

The future international importance of the Financial Centre Germany is rated even more positively than immediately after the Brexit vote a year ago

Since the Brexit vote, the future international importance of the Financial Centre Germany has been rated very positively. In the fourth quarter of 2017 the corresponding sub-index falls by 3.2 points to 135.5 points, which is just under the historic high reached in the last quarter.

Hubertus Väth, Managing Director of Frankfurt Main Finance e.V., points out: “The results of the survey show very clearly that the increasingly positive expectations for the Financial Centre Frankfurt run counter to the uneasy atmosphere within the German financial industry as a whole. In this respect, there is a rare unanimity among the market participants.”

Revenue and earnings growth positive among the financial institutions and declining among the service providers

There are contrasting developments in the growth in revenues/business volume among the surveyed financial institutions and service providers. The financial institutions report a clear increase of 5.1 points to 111.5 points and expect this trend to continue in the current quarter. Meanwhile, the service providers report a strong decline in the growth of their business volume, though not as drastic as they had predicted in the last quarter. The corresponding sub-index falls by 7.3 points to 117.2 points. However, the service providers are anticipating a huge increase in revenues in the current quarter.

The earnings figures also reveal contrasting trends. For the financial institutions, this sub-index rises by 2 points to 107.4 points. The service providers, on the other hand, record a sharp decline of 12 points. Their earnings sub-index now stands at 106.7 points, which is its lowest level in five years, though the service providers are significantly more optimistic about the current quarter.

Service providers’ investment volume takes a downturn following previous high

Having reached its highest level since the survey began in 2007 in the last quarter, the investment volume sub-index for the service providers now falls by 6.9 points to 116.7 points, thus returning to the level of the previous quarters. By contrast, the corresponding sub-index for the financial institutions gains 2.3 points to reach 118.9 points. Both groups expect to retain this level in the current quarter.

Job cuts at financial institutions on the rise again

After being curtailed in the last two quarters, job cuts at the financial institutions are being stepped up again. The employee numbers sub-index falls by 3.7 points to 95.3 points. Even among the service providers, the trend to recruit new employees has diminished. The corresponding sub-index falls by 5.3 points to 113.3 points. Both groups expect this downward trend to persist in the fourth quarter.

CFS survey: Financial industry believes bubbles are likely to form on the European financial markets

Financial industry believes bubbles are likely to form on the European financial markets due to QE measures and the ECB’s zero interest rate policy. Rapid departure from expansive monetary policy is favored, yet not expected. This is cause for alarm.

According to a recent survey by the Center for Financial Studies, there is firm agreement within the German financial industry (92%) that bubbles have formed or will form on the European financial markets (e.g. stock markets, real estate markets) due to the ECB’s expansive monetary policy if this strategy is maintained.

Since 2015 the European Central Bank (ECB) has pursued a policy of quantitative easing (QE). In addition, the key interest rate of the eurozone, which is the main refinancing rate paid by banks when they borrow from the ECB, has been kept at zero since March 2016. Aside from the feared negative impacts, opinions in the financial industry are split as to whether these measures have brought about the desired results in terms of increasing the rate of inflation and boosting economic growth. Half the survey respondents (49%) regard the ECB’s expansive monetary policy as partially effective, whereas 38% believe the stated goals have not been reached. Just 12% of the respondents regard the expansive monetary policy as clearly effective.

“The survey illustrates the scepticism of market participants about the effectiveness of the ECB’s monetary policy strategy. In particular, the ECB should take the concern about bubbles forming in particular asset classes very seriously,” Professor Volker Brühl, Managing Director of the Center for Financial Studies, interprets the survey results. “A further cause for alarm is the prevailing opinion of market participants that a departure from the expansive monetary policy is called for, yet not expected. This could mean the markets will be caught wrong-footed if the ECB, contrary to market expectations, does initiate a change of direction. It is crucial that the ECB communicates its intentions clearly and in good time,” Professor Brühl adds.

On 26 October 2017 Mario Draghi will announce the next key interest rate decision that will determine the future direction of ECB monetary policy for 2018. The majority of the financial industry (78%) favors a decision to rapidly depart from the expansive monetary policy (by Q1 2018 at the latest). However, hardly any of the respondents (2%) anticipate this outcome.

“The disparity between the desire for an exit from the expansive monetary policy and the low expectation that this wish will be fulfilled is, in itself, a clear warning signal. Real market prices have now been lacking for a considerable period of time,” says Dr. Lutz Raettig, Executive Chairman of Frankfurt Main Finance e.V., commenting on the survey results.

FinTech location Germany set for growth

Germany’s segment of emerging technology companies operating in the financial services sector (FinTech) is increasingly successful in establishing itself as a dynamic and diversified cluster on its own steam. This is one of the key findings of the recent study “Germany FinTech Landscape” carried out by auditing and consultancy company EY which, together with Frankfurt Main Finance, analysed the German FinTech sector and outlined additional opportunities for its promotion. According to the study, there is a clearly discernible trend among financial institutions to respond more vigorously to the challenge posed by the products and services offered by FinTech companies. The majority of the ten biggest banks are today investing in and/or cooperating with FinTechs. The study also shows that the business models of the FinTechs are becoming more mature, and that the companies are entering the next development phase, e.g., through cooperative ventures with each other, in order to strengthen their market position sustainably.

In the first half of the year, the number of FinTech companies in Germany rose by five per cent year-on-year to 295 (2016: 280). The inflow of capital had already reached 307 million euros in the first half of the year, whereas the FinTech companies in Germany collected 400 million euros for the full year 2016. The number of deals also went up, as did the average size of the deals, rising slightly from 7 million to 7.3 million euros.

While absolute growth rates may have levelled off slightly, consistent positive momentum persists for all key metrics. This showed that the FinTech landscape in Germany continued to be on an encouraging path, said Jan-Erik Behrens, co-author and partner at EY: “The trend we are observing here in Germany is headed for another record year, and it impressively demonstrates the innovative power of Germany as a location, with differing regional strengths.”

FinTech sector shifts focus, with business models gaining maturity

The German FinTechs are increasingly moving in on the core functions of the financial services providers. This applies, for example, to payment systems via the Internet or mobile devices (Payments), loans (Lending), but also to offerings for the property sector (PropTech), the insurance industry (InsurTech), the investment sector (InvesTech) and electronic marketplaces (Financial eMarketplaces & Aggregators). Approximately 67 per cent of the new FinTechs come from these core segments, 33 percent are start-ups in the field of Enabling FinTechs, which includes financial and process control software (Processes & Technology), financial data analysis and regulatory management services (RegTech).

The study reveals that there has been a shift in FinTech activities. The segments that had been strong growth drivers in recent years were InvesTech, Financing & Funding and InsurTech. In the first half of 2017, however, there was a very high level of activity in the PropTech area, which is probably due in part to the robust real estate market in Germany, as the study assumes.

Berlin and Rhine-Main-Neckar are the leading FinTech locations in Germany

The regions of Berlin and Rhine-Main-Neckar in particular are consolidating their status as FinTech hotspots within Germany: Berlin currently boasts 80 FinTech companies, while 72 corporations are active in the Rhine-Main-Neckar region. Munich, the third-ranked FinTech location in Germany, is a distant third, with 45 FinTechs based in the Bavarian capital.

The study confirms that the Rhine-Main-Neckar region, led by Frankfurt, is making significant progress towards establishing itself as the leading destination for settlement of FinTechs. The study identifies the special strengths of the Rhine-Main-Neckar region as being events & networks, as well as in infrastructure. Numerous incubators, accelerators, investor meetings and networking initiatives have been initiated and launched successfully. However, the region still has further potential for growth in terms of image and financing opportunities. “International investors continue to focus on London or Berlin,” Behrens notes. “For this reason, the FinTech community needs to work on its international visibility, so as to attract foreign investors as well.”

Amongst the trends that will influence the development of FinTech in the future, the study suggests that Brexit –the UK’s exit from the European Union (EU) –is likely to enhance the appeal of GermanFinTech centres. Like many financial institutions that have already decided to relocate business units from London to the EU, and especially to Frankfurt, FinTech companies are likely to follow suit.

“Frankfurt’s strong appeal to banks makes the region even more interesting for FinTechs,” says Hubertus Väth, managing director of Frankfurt Main Finance. “The EU’s leading financial centre is well placed to attract FinTechs and become a leading location for young, innovative and agile companies. It is a matter of further enhancing the location’s appeal to FinTechs. Frankfurt and the Rhine-Main-Neckar region are facing global competition, and for the foreseeable future London is likely to remain the benchmark in Europe against which company founders will judge us. In particular, we still need to improve in terms of our openness to cooperation with company founders, the social acceptance of failure and subsequent new starts, and the tax treatment of venture capital losses sustained.”

Financial institutions becoming increasingly active in the FinTech segment

The growing presence of FinTechs in the financial sector has prompted banks and other financial institutions to launch various initiatives in an effort to respond to the challenge posed by FinTechs. Nine of the ten largest banks in Germany have already entered into co-operative ventures with FinTech companies; some of them have invested in FinTechs themselves, such as Commerzbank via its investment vehicles Commerz Ventures and Mainincubator, or Deutsche Börse via db1 Ventures. “The banks are closely monitoring the FinTech companies and their solutions – they cooperate with the start-ups and in some cases invest in them directly. However, they still have some catching up to do in the development of their own innovative solutions and products,” observes Christopher Schmitz, co-author and partner at EY. The banks’ current initiatives are still isolated and largely uncoordinated responses to the FinTech challenge. An extensive range of services on a digital platform, where both own products and those of external service providers are offered, would be an appropriate response to FinTechs – banks are working on it, but as yet there has been little by way of tangible added value for customers.” Such digital ecosystems could also be created in co-operation with FinTechs. The DZ BANK Group’s travel bank, with its Bankomo Smartphone Banking product, is in the process of establishing such an ecosystem.

FinTechs cooperating with FinTechs

While financial institutions are still busy working on finding an appropriate response to the FinTech challenge, more and more FinTechs are expanding outside their core market segment, Schmitz observes. In doing so, they are increasingly relying on partnerships with other FinTechs. It is also noteworthy that the more mature FinTechs are already attempting to build their own ecosystems around their core product portfolios. This can be clearly seen in examples such as N26, which have rapidly expanded their range of services by co-operating with other FinTechs. The PSD2, which will be establishing access for third parties to payment accounts from 2018 onwards, in combination with the expected further opening-up within the framework of “open banking” efforts, is paving the way for the digital platform economy in the financial services sector. Competition with established financial institutions will therefore intensify, according to Christopher Schmitz: “Financial institutions should now consider strategies that will be appropriate to the competitive environment and establish their digital ecosystems with recognisable added value for customers, in cooperation with innovative players.”

The study is available as a pdf document here.

Frankfurt Christmas Market – regional specialties, international Christmas carols & a festive sea of lights

The Frankfurt Christmas market has a long tradition and is one of the oldest Christmas markets in Germany. Up to the year 1393 it can be proven that markets took place in Frankfurt on Christmas. The traditional centerpiece of the market is the Römerberg, which with its historic half-timbered houses provides the backdrop for one of the country’s most beautiful and largest Christmas markets. The approximately three million visitors can enjoy the festive atmosphere between the city center and Römerberg from November 22 to December 22, 2017.

This year, the Christmas market goes under the slogan Music City Frankfurt. Similarly, this year’s Christmas market cup is provided with the text of a Christmas song – with which visitors can find out from the opening day. The highlight of the opening ceremony on November 27 will be the performance of the pop singer Michelle. And until  December 22, the musical offer ranges from the performance of international Christmas carols, the playing of the tower musicians of the Old St Nicholas Church to the big ringing of the city with the simultaneous ringing of 50 bells.

Over 200 Christmas stalls attract visitors with lovely products and treats. In addition to the classic roasted almonds, mulled wine and sausages, you can enjoy typical Frankfurt Christmas specialties such as Bethmännchen (“a little Bethmann”), hot cider and Quetenkännchen. Furthermore, you can taste some traditional regional dishes cooked in an unusual way, such as green sauce crêpes with ox breast or Handkäs (“hand cheese”) fondue. In addition to the culinary diversity, visitors can expect classic Christmas market decoration and folk art articles, as well as modern handicrafts and typical Frankfurt goods such as ‘dippe’ (ceramic pot) and earthenware products. On the adjoining craft market in the Roman halls and the St. Paul’s Church, there is also the opportunity to search for an extraordinary Christmas present.

On Advent weekends, the Christmas market tour “Glühwein, Geschichten & Gebäck” (Mulled wine, stories and pastries) will be offered in many languages as well as for the blind and visually impaired and the Frankfurt Christmas market specialties will be presented. Also stories about the historic and modern Frankfurt, the Christmas market and famous Frankfurt personalities are part of the tour, which is completed with a visit to the roof gallery of the Old St Nicholas Church and the spectacular view of the sea of lights from the Christmas market and skyline.

At the Frankfurt Hauptwache (Main Guard) there are more Christmas market stalls, which extend the classic Christmas market area up to the shopping street Zeil and thus form a passage to Christmas shopping. On Friedrich-Stolze-Platz there is also the so-called “Rosa Weihnacht”, which is organized by the gay community of the Rhine-Main region and creates a special atmosphere with its colorful lights, unusual decoration and design. In addition to this contiguous Christmas market area also Frankfurt-Höchst and Sachsenhausen invite you to visit small district Christmas markets. At the gates of the city there are also a variety of romantic Christmas markets in Odenwald, Rheingau, Taunus and Wetterau.