Deutsche Börse makes strides towards future in Frankfurt

Deutsche Börse will expand the historic stock exchange building in the heart of the Main Metropolis into the Financial Centre Frankfurt’s communications center and a point of contact for the general public. The protected landmark, home to the renowned trading floor and Frankfurt’s Chamber of Industry and Commerce (IHK Frankfurt), will be the symbolic heart of the financial centre and Deutsche Börse in Frankfurt.

“We are delighted by this commitment from Deutsche Börse. Frankfurt will receive a modern centre and visible symbol of the city and region’s growing prominence as the most important financial centre in continental Europe,” says Dr. Lutz Raettig, President of the Financial Centre Initiative Frankfurt Main Finance. “The decision could not come at a better time. Deutsche Börse is proudly flying the flag for Frankfurt, which is now, as a result of Brexit, a focal point in restructuring the architecture of the European financial industry.”

Lasting until early 2020, Deutsche Börse plans to invest 18.5 million euros in the expansion and has signed a lease with the IHK Frankfurt, the building’s owner, stretching until 2048. Following the renovation, Deutsche Börse will increasingly concentrate on using the visitor center as a modern means for providing education. Guests will learn about the functioning of the stock market and the exchange’s benefits for industry and commerce, thus, its benefits for society.

The Deutsche Börse Group announcement is available here.

Photo: Deutsche Börse AG

CFS Survey: Financial industry does not believe bitcoin price trend is justified / Clear support for stronger regulation

The price of one bitcoin rose from around USD 1,000 in early 2017 to almost USD 20,000 by December. With several peaks and troughs in the meantime, by mid-January bitcoin had shed around 40% of its value. According to a recent survey by the Center for Financial Studies, the majority of the German financial industry does not believe this price trend is justified – 81% of respondents agree on this point.

It is difficult to predict what potential risks could arise for the financial system. Over half the respondents (54%) take a critical view of the development. On the other hand, 41% of the survey participants believe the risks are negligible. Regardless of how they view the potential risks, however, a large majority (78%) believe that the cryptocurrencies market should be subject to tougher regulation.

“The survey makes it clear that concerns are growing among financial market participants regarding bitcoin’s lack of transparency and volatile price trends,” Professor Volker Brühl, Managing Director of the Center for Financial Studies, interprets the survey results.

Although the importance of cryptocurrencies is growing, bitcoin will still not be able to replace our classic monetary system in the long term. The financial industry is in firm agreement on this point (93%). In addition, 79% of the respondents do not regard bitcoin as a generally attractive investment instrument.

“In its current form, bitcoin constitutes a dubious construct that offers no discernible added value. Clear regulatory frameworks and rigorous supervision are therefore required to ensure that investor protection also applies to cryptocurrencies and that potential systemic risks are extinguished at an early stage,” Professor Brühl adds.

Hubertus Väth, Managing Director of Frankfurt Main Finance e.V., emphasizes: “Despite all justified scepticism, the fascination about the technology and its potential remains intact. Regulation should not suppress experimentation.”

CFS Index reaches highest level since the start of the financial crisis

Financial industry reports: Strong growth in revenues and earnings / Employee numbers on an upward trend / Investment volume declines slightly, but remains at a high level

The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, rises by 5.9 points to 120.1 points. This hugely positive development can primarily be attributed to the high revenues and earnings of the financial industry in the fourth quarter of 2017. Furthermore, the financial institutions are now reducing their job cuts and they expect this trend to become more pronounced in the current quarter. The trend for employee numbers among the service providers is also positive. Their level of recruitment is on the rise. However, the financial industry reports a slight decline in investment volume, even though it remains at a high level.

“The industry’s strong performance in turnover and profit will help banks to address the next big challenge, digital transformation. This is reflected in the very positive outlook of the financial services industry, which includes consulting, auditing and advisory,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

The future international importance of the Financial Centre Germany continues to be rated very positively

With an increase of 0.4 points to 135.9 points, the business location sub-index, which measures the future international importance of the Financial Centre Germany, is just slightly below its highest ever level, reached shortly after the Brexit vote in 2017.

“The consistently high level of the index shows that people are placing greater trust in the Financial Center Germany. This should be an incentive for all participants to go about shaping the future of the financial industry in this country with optimism and self-confidence,” Dr. Lutz Raettig, President of Frankfurt Main Finance e.V., interprets the survey results.

Financial industry revenues and earnings are on the rise. Only in 2007, the first year of the survey, have the service providers reported higher figures.

Contrary to their rather modest expectations from the previous quarter, the surveyed financial institutions and service providers strongly increased their revenues/business volume in the final quarter of 2017. The corresponding sub-index for the financial institutions rises by 11.2 points to 122.7 points; that of the service providers climbs 20.3 points to 137.5 points. As for the current quarter, the financial institutions are expecting just a minimal decline. The service providers are anticipating a decline to the level of the previous quarters.

The earnings of both groups also developed especially positively in the fourth quarter of 2017. The corresponding sub-index for the financial institutions climbs 6.5 points to reach a level of 113.9 points. The service providers report huge earnings growth of 26.9 points, clearly exceeding even their own positive expectations from the previous quarter. The earnings sub-index for this group thus rises to 133.6 points.

Investment volume declines slightly, but remains at a high level

Having reached its highest level since the survey began in 2007 six months ago, the investment volume sub-index for the service providers has been on a slight downward trend since the last quarter. It falls by 2.8 points in the first quarter of 2017 to 113.9 points, though this is still a high level. Similarly, the sub-index for the financial institutions falls by 5.1 points to 113.8 points. While the financial institutions are anticipating a further decline, the service providers are expecting their investment volume to increase in the current quarter.

Financial sector employee numbers on an upward trend / Job cuts at financial institutions curtailed

After job cuts increased in the previous quarter, they are now being curtailed at the financial institutions. The corresponding employee numbers sub-index rises by 3.3 points to 98.6 points. The trend is also positive among the service providers, where the level of recruitment is on the rise. The sub-index rises by 3.5 points to 116.8 points. Both groups expect the upward trend to continue, though the service providers are even more optimistic than the financial institutions.

Financial Centre Frankfurt belongs to most secure cities in Europe

The Safe City Index 2017, conducted by The Economist, ranks the Financial Centre Frankfurt 4th in Europe and 11th globally, in a comparison of 60 cities. The Financial Centre Frankfurt scored top ratings in the categories health, digital security and personal security on a European, as well as on a global scale, ratings which are clear indications of a successful security concept developed by Frankfurt.

In the health category, Frankfurt counts among the top three cities, placed right behind Tokyo and Osaka; thus, first in Europe. Meaning, there is no other European city which offers their citizens a better public health system than Frankfurt. The study’s authors were convinced by the equipment of the hospitals, the efficiency of emergency services as well as the network of care facilities. The multitude of parks and green spaces, as well as the high quality of water, lifted Frankfurt to a high ranking within the sub-field of environment.

Frankfurt’s digital security concept has clearly evolved since 2015

Through the ever increasing utilization of intelligent technologies, cities are clearly growing to be smart cities. The central question within the category remains, despite all of the safety advantages of this trend, how cities are securing themselves against hacker attacks and the failure of complex technological systems.

The city gained seven spots within this category in comparison to the Safe Cities Index 2015. The improvement in this category illustrates, that Frankfurt has recognized the challenges posed by digitization regarding security and that it applies increasingly successful measures. Frankfurt reaches the 3rd position in a European and ranks 16th globally.

One more Frankfurt-related stereotype that is no longer applicable

Frankfurt is not dangerous. The study again refutes the outdated and persistent stereotype of the Main Metropolis regarding personal security. After all, ranked 3rd in Europe and 11th globally, Frankfurt achieved a particularly high ranking regarding personal security. If the statistic were to be adjusted by leaving out such crimes that were committed at the airport, then Frankfurt would surely rank even higher. The study results regarding personal security do however go beyond the topic of crime rate and identify terrorism as the currently biggest challenge for global cities in achieving personal security. In this respect, too, the concept developed by Frankfurt convinces the The Economist‘s Safe Cities Index team.

The study attests a successful as well as integral security concept to Frankfurt

As the Safe Cities Index indicates, the considered categories cannot be regarded as separate, but are in fact deeply influencing and dependent on one another. Thus, the success of a security concept hinges on it being integral as well as considering all of the mentioned sectors and categories. Certainly, a challenge that cities will have to address considering the areas of tension of regional and local particularities, global developments and threat scenarios as well as limited financial resources regarding the cooperation with federal and international institutions, challenges that they will have to champion for the purpose of the protection and welfare of their citizens. Frankfurt’s high ranking at position 11 in the overall ranking and the respective 5th position among European cities clearly shows, that Frankfurt has recognized the need for a comprehensive understanding of security and that the implementation of an integral security concept was successful. In the overall rankings, London (20), Paris (24) and Milan (25) all scored lower.

Fourth FMF delegation visit to South Korea and Hong Kong

Under the leadership of Dr. Lutz Raettig, President of Frankfurt Main Finance, a German FinTech delegation, traveled to South Korea and Hong Kong from January 11 to 16, 2018, as in previous years.
In Seoul, a meeting with Heungsik Choe, the President of the Korean financial regulator FSS was on the agenda. Topics of the discussion were the latest developments in FinTech, Blockchain and Cryptocurrencies.
At the FinTech & Blockchain Forum at Sogang University in Seoul, Korean and German companies were presenting their business models. From the German side, the Frankfurt company blockchain HELIX and Firamis as well as the Stuttgart FinTech FINVAX were pitching. Dr. Jochen Papenbrock, Founder and CEO of Firamis, explained his innovative approach of using artificial intelligence in the financial industry.
At the next morning, the delegation travelled with the KTX high-speed train to Busan. Busan and Frankfurt Main Finance are linked by various cooperation agreements and work closely together. The delegation was officially welcomed by Ki-young Kim, Vice-Mayor of Economic Affairs at the Busan City Hall. Afterwards, the Busan-Frankfurt-FinTech Roundtable took place on the 52nd floor of the landmark BIFC building, which is a strong symbol for the dynamic development of the second-largest Korean city.
Back in Seoul, the delegation met with Korean politicians, companies as well as with Prof. Sooyong Park, the head of the Global FinTech Research Institute.
In Hong Kong, the delegation participated in the Asian Financial Forum (AFF). By means of a joint booth between FrankfurtRheinMain GmbH, Hessen Trade & Invest and Frankfurt Main Finance, Frankfurt presented itself as an attractive international financial center to the Asian financial community – not only in the Brexit context.
In her opening address at the AFF, Carrie Lam, the new head of the Hong Kong government, made clear the importance of Fintech and Blockchain for Hong Kong. Blockchain technology is expected to support Hong Kong’s contribution to the Chinese One Belt, One Road (OBOR) initiative.
Later at the same day, Oliver Naegele, founder and CEO of Frankfurt-based Blockchain presented at the Fintech O2O International Fintech Pitch Evening in Cyberport, Hong Kong’s state-owned tech center for FinTechs and other tech companies. In his pitch, he had the opportunity to convince the audience of his unique digital identity solution running on a Blockchain. A lot of applause and many positive comments in the aftermath showed that he was quite successful in doing so.
The second day of the Asian Financial Forum was almost completely dedicated to the startups. In addition to numerous pitches, international experts discussed the FinTech ecosystems in China, Hong Kong and Asia in various so-called “Innotalks”.
Further discussions were held with the Hong Kong FinTech Association and the newly established Hong Kong Blockchain Center (HKBCC). Frankfurt Main Finance intends to work closely together with both organizations in the future.

A 360 degrees perspective on Frankfurt and the region

Discover first traces of the Brexit in Frankfurt? Or how about taking a tour of the musical specialties ranging from Mozart to The Doors? Would you like to discover the Main Metropolis from the perspective of a former homeless man? Or would you rather discover the Frankfurt city forest in the context of an Irish Roadbowling experience? What about discovering gossip and love stories, Indian spots, graffiti and street art, espionage and secret societies or the most popular watering holes of Frankfurt?

All of the aforementioned is a mere tiny excerpt of the meanwhile 250 different events offering you, since 2009, a glimpse into Frankfurt organized by the Journal Frankfurt magazine in cooperation with the renowned city guide Christian Setzepfandt. The core question of the program is the following: We’re traveling to foreign countries and far away cities and yet we should ask ourselves what we ourselves really know about our own hometown located at the main? The goal of the extensive program is thus supplying Frankfurt locals with a new perspective on their city and in this context immerse into unknown but appealing locations and ways of living, traditions and the cities culture and take a glimpse behind the curtains of cultural institutions, popular buildings and popular spots of Frankfurt. For tourists and recently settled citizens, the organizers would like to take a focus on crushing persistent preconceptions about Frankfurt as a lifeless commuter town, the red light district and crime by showcasing the multifaceted nature of Frankfurt and offering a close experience of the various neighborhoods, the history, the unexpected, curiosities, scary elements of the city, the fascinating, the romantic and lost treasures.

Aside from the multitude of originally themed city tours in the categories architecture and extraordinary buildings, secret locations, parks and nature, children, families and the elderly, culture, art and city history, parties and red light as well as streets and neighborhoods, the program also includes various workshops taking a special focus on Frankfurt, it’s vicinity and beyond. The program ranges from rather ordinary courses of photography in Frankfurt, acquiring sport techniques and cooking classes of special dishes to extraordinary workshops on Apfelwein (apple cider), airline pilots in the flight simulator, film animation or a course for adults on making your own soap bubbles.

The program by Journal Frankfurt is not limited on the Main Metropolis, however, but rather invites you to discover the surroundings of Frankfurt as well: Starting from touring Offenbach with the topics ranging from weather, industrial change, the Offenbach harbor or migration in Offenbach bringing to light desires as well as existential fears, to a champagne tasting along the mountain route, a meeting with the city beekeeper of Kassel up to workshops on the creative rural cuisine of the Odenwald or a culinary tour of local dishes through the Wetterau.

Early planning of your participation will pay off. Some especially exceptional tours and workshops only take place a few times per year. The price range starts at being free of charge to a participation fee of 89 euro; the average participation fee is about 20 euro per person. An increasing part of the city tours will also be offered in English. You will find an overview of the Journal Frankfurt program right here.

FinTech delegation travels to South Korea and Hong Kong

As in recent years, in January a FinTech delegation will be traveling under the leadership of Dr. Raettig to Hong Kong for the Asian Financial Forum (AFF). The Asia Financial Forum is the most important meeting of the Asian financial sector and will be held for the eleventh time on January 15 and 16, 2018. AFF’s topics include financial innovation and technology, AI and robotics, green finance, insurance technology, Fintech, Blockchain and banking innovations.

Frankfurt Main Finance will present itself with a joint stand with FrankfurtRheinMain GmbH and Hessen Trade & Invest to the Asian financial community as an attractive international financial center – not only in the Brexit context.

For years Frankfurt Main Finance has maintained close ties with the FinTech community in Hong Kong, among others with HKTDC, Invest.HK, the FATHK and Cyberport and Metta as leading FinTech Hubs in Hong Kong.

The FinTech delegation will travel to South Korea already on January 11, 2018, where it will present itself at FinTech events in Seoul and Busan. Frankfurt Main Finance is closely linked to both South Korean financial centers through a number of agreements, among others in the areas of FinTech and Blockchain. For several years there has been a regular exchange at the level of the financial centers as well as the supervisory authorities. South Korea is an important partner for Frankfurt and also a regular destination for delegation trips of the state of Hesse.

About the Asian Financial Forum in Hong Kong

For the eleventh time, on January 15 and 16, 2018, top-class international representatives of the financial and business world will meet at the Asian Financial Forum in Hong Kong. During the two days they will discuss developments and trends in the dynamic markets of Asia and over and above that. The event, organized by the Hong Kong Special Administrative Region (HKSAR) and the Hong Kong Trade Development Council (HKTDC), has this time the motto: steer growth and pave the way for innovations, both in Asia and around the world. In 2017, the Forum had over 2,900 participants, including more than 100 internationally renowned speakers. There was also a great interest in the Deal Flow Matchmaking Sessions, where more than 490 projects were discussed with investors in over 600 conversations. Overall, the organizer has already arranged 3,800 meetings with more than 1,800 companies since the start of these sessions.

Among the contributors in 2018 are Jacob J. Lew, US Secretary of the Treasury until 2017, David Lipton, First Deputy Managing Director of the International Monetary Fund, Pierre Gramegna, Minister of Finance of Luxembourg, Hu Huaibang, Chairman of China Development Bank Corporation, and Takehiko Nakao, President of the Asian Development Bank. From Germany comes Dr. Andreas Dombret, board member of the Deutsche Bundesbank. Speaker at the Keynote-Luncheon on January 16 is this year the expert for AI and Robotics, Professor Daniela Rus, Director of Computer Science and Artificial Intelligence Laboratory (CSAIL) and Professor for Electrical Engineering and Computer Science at the MIT.

The AFF visitors are also offered to have pre-arranged meetings for participants with common interests, the InnoVenture Salon for Startups, who want to present their business ideas to international investors, a free financial and service advisory zone and sessions with project owners, presenting their projects to potential investors.

To the HKTDC homepage: http://bit.ly/2kpfT38

More articles on the topic:

o “Think Asia, think Hong Kong” in Germany

o FinTech Breakfast with Invest Hong Kong

o Leading Korean FinTech companies visit the Frankfurt financial center

o Delegation from South Korea visits the financial center Frankfurt

 

Contact: Dr. Jochen Biedermann

Frankfurt Main Finance has signed MoU with Bahrain FinTech Bay

Frankfurt Main Finance and Bahrain Fintech Bay have signed a Memorandum of Understanding (MoU) on cooperation between the two FinTech Hubs. Dr. Lutz Raettig, President of Frankfurt Main Finance, and Gerben Visser, Founder of Bahrain FinTech Bay signed the agreement.

The goal of the Co-working space Bahrain FinTech Bay is to become the largest FinTech Hub in the Middle East. To achieve this goal the initiative supports young FinTechs in their development, offers them partnership opportunities and a global FinTech partner network. This network will now be supported by Frankfurt Main Finance. For Frankfurt Main Finance and the Financial Centre Frankfurt’s emerging FinTech Ecosystem the cooperation is an important entry point to the Middle East FinTech events and initiatives.