Frankfurt Finance Summit 2018 – Ready, Steady, Go!

On May 29, 2018, well-renowned international and national experts from the financial industry and decision makers gathered at the 8th Frankfurt Finance Summit titled Ready, Steady, Go! Who is ready to set the pace in challenging times? to debate the challenges and the strategic responses to current issues facing the European economy, regulators and financial markets. The decision-makers from central banks, stock exchanges, supervisory authorities, banks, insurance companies, politics, business and academia further discussed the future location and supervision of euro-denominated clearing transactions by central counterparties after Brexit and the advancement of artificial intelligence and the potential implications for financial institutions.

Dr. Lutz Raettig, President of Frankfurt Main Finance, opened the Frankfurt Finance Summit by welcoming the attendees and speakers, ranging from several countries and continents and a broad range of backgrounds in the financial services industry. Dr. Thomas Schäfer, Member of the Hessian Parliament and Hessian Minister of Finance, followed with a welcome address in which he discussed recent legislative proposals by the European Commission concerning EU financial markets, stating that he finds a EU single market to not be necessary. In his opening keynote Dr. Jörg Kukies, State Secretary at the Federal Ministry of Finance discussed the transitional period of Brexit as well as the consequences for EU27 and the Financial Centre Frankfurt. Kukies proudly stated, “If we look at Frankfurt, we see a city in a very good starting position. Frankfurt is one of the continent’s leading financial hubs and plays in the league of the world’s leading financial centres.” Kukies further enumerated a lengthy list of the Financial Centre Frankfurt’s advantages, including its deep talent pool, academic network, and outstanding quality of life. Thereafter, Jeroen Dijsselbloem, former President of the Eurogroup and former Minister of Finance of the Netherlands delivered the European keynote in which he gave an outlook on the potential consequences of Brexit and a political and legal way forward, saying that “For Frankfurt, it’s a good outlook. When I go to the UK, bankers will tell me – they won’t say this publicly of course – that the amount of business and the amount of people they’re going to shift, is larger than what is publicly being talked about and Frankfurt is at the top of the list.”

The impact of Brexit on British financial institutions

The Summit’s first panel addressed tomorrow’s strategic responses to the major questions in the financial industry. Chaired by Prof. Dr. Uwe Stegemann Senior Partner, McKinsey & Company, the panel featured Katharine Braddick, Director General of Financial Services at HM Treasury, Bernd Geilen, Vice-Chairman and Chief Risk Officer at ING-DiBa, Thomas Grosse, Industry Leader Banking and FinTech at Google Germany, Felix Hufeld, President of the Federal Financial Supervisory Authority (BaFin) and Dr. Cornelius Riese, Chief Financial Officer at DZ Bank AG. As part of the debate, Kathrine Braddick discussed the impact of Brexit on the financial services industry in London, saying that Brexit is not a concern for most domestic firms, as they are primarily concerned with UK markets. When discussing the relocation of financial institutions from London to Frankfurt Braddick stated, “I think that first phase of moves is relatively confined. Most firms affected I think they are expecting there will be a second phase and depending on the relationship that we achieve with the European Union and of course our aspiration is a very close relationship on financial services that will determine the scale of that second phase and to me that is currently unknown.” The panel further addressed the challenges of digitalisation from an implementation and regulatory standpoint. This discussion naturally progressed to encompass the demands of recent data protection regulations, like GDPR and PSD2.

The consequences of Brexit for Euro clearing

The Summit continued with a discussion on the future of Euro Clearing after Brexit, beginning with a keynote from Yves Mersch, Member of the Executive Board of the European Central Bank, in which he discussed the potential adaption of legal frameworks regulating Central Counterparties (CCPs) who are located outside of the European Union, stating that  “Ultimately, amending both the European Market Infrastructure Regulation (EMIR) and Article 22 will establish a comprehensive legal framework to address the risks CCPs pose to the Union – both its financial markets and its currency. It will ensure that the EU’s legislators, supervisors and central bank – acting in their respective roles – can adopt the wide range of measures needed to safeguard stability.”

The following panel, moderated by Annette Weisbach, further explored the future supervision of the clearing of euro denominated derivates by CCPs with financial industry experts such as Karin Dohm, Managing Director and Global Head of Government and Regulatory Affairs and Group Structuring at Deutsche Bank, Christoph Hock, Head of Multi-Asset Trading at Union Investment Privatefonds, Erik Tim Müller, Chief Executive Officer at Eurex Clearing AG, Patrick Pearson, Head of Financial Markets Infrastructure and Director General of Financial Stability, Financial Services and Capital Markets Union at the European Commission and Fabrizio Planta, Head of Markets Department at the European Securities and Markets Authority. Diving right into the topic, Eurex’s Erik Tim Müller explained, “Our objective is to talk to the clients and find out what their needs are and the needs that we hear is that today obviously all eggs are essentially all in one basket in London and that seems like a very risky set up given the circumstance. So, what we came up with at Deutsche Börse is a market lead alternative for these market participants to build up a second liquidity pool. […] We came from less than one percent market share 12 months ago to over six percent market share now and rising.”

Giving insights into what is important to asset managers, Union Investment’s Christoph Hock, , highlighted the importance of competition in order to lower transaction costs for the benefit of investors. “You’ve had monopoly structures, take LCH, they’ve had something like […] 95% of interest rate derivatives cleared on LCH and obviously monopoly structures are not beneficial for lowering cost of trading and also when we are looking at innovations, that is completely left aside. […] That’s why we highly appreciate the partnership program Deutsch Börse Eurex offered to the market which caused prices to come down, big offer spreads to tighten. Our assessment is that with this new offering we are able to lower also our cost of trading and in this context our cost of clearing. […] Would we prefer to have a strong second clearing hub here on the continent, i.e. with Eurex? The clear answer is yes,” said Hock.

Artificial Intelligence in the financial industry: a new frontier

The third panel on artificial intelligence in the financial industry began with an impulse speech by Carsten Murl, Head Enterprise Security Solutions Germany at Mastercard, in which he explained how Mastercard is very successfully using artificial intelligence for smart fraud protection throughout their entire stream of transactions addressing various needs. Thereafter, the panel featuring Charles Delingpole, CEO and Founder of ComplyAdvantage, Markus Nigg, COO of ti&m AG, JP Rangaswami, Group Chief Data Officer & Group Head of Innovation at Deutsche Bank AG, Francisco Webber, CEO and Co-Founder of Cortical.io, and Peter J. Wirnsperger, Partner Cyber Risk Services at Deloitte discussed various aspects of data protection and whether artificial intelligence can be understood as the problem or the solution to data security in the financial service industry. During the debate, Deutsche Bank’s JP Rangaswami explored the definition of data safety and the responsibility it brings to companies processing data while highlighting the importance of people feeling secure and empowered by the ability to consent to the usage of private data. Moreover, Deloitte’s Peter J. Wirnspergeremphasised the consequences of data misuse and thus, the importance data protection has, which is something that should be of concern not only to the economy and but society as a whole.

The eighth Frankfurt Finance summit came to an end with closing remarks by Professor Dr. rer. pol. Dr. h.c. Udo Steffens, Chairman of the Executive Board at the Frankfurt Institute for Risk Management and Regulation (FIRM).

Frankfurt Main Finance and the Frankfurt Institute for Risk Management and Regulation would like to thank this year’s sponsors for their generous support. Deutsche Bank was this year’s Gold Partner. Silver Partners included Deloitte, Deutsche Börse Group, DZ Bank, ING-Diba, Mastercard, and Wirtschaftsförderung Frankfurt.

Livestream of Frankfurt Finance Summit

The 8th Frankfurt Finance Summit titled “Ready, Steady, Go! Who is ready to set the pace in challenging times?” is taking place on 29 May 2018 at Kap Europa. Well-renowned international and national experts and decision-makers are meeting to discuss current issues faced by the European economy, regulators and financial markets.

This year’s summit evolves around the strategic responses to challenges faced by the financial industry in times of change and uncertainty. Moreover, the future location and supervision of euro-denominated clearing transactions by central counterparties after Brexit will be discussed by leading financial industry experts. Participants will also debate the advancement of artificial intelligence and the potential implications for banks and financial institutions.

You can watch the summit via livestream!

Financial Centre Breakfast with François Villeroy de Galhau: Sustainable Monetary Policy ensures Economic Stability

On August 31, 2016, the Association of Foreign Banks in Germany and Frankfurt Main Finance hosted the seventh edition of their successful Finanzplatz Frühstück (Financial Centre Breakfast) event series. More than eighty entrepreneurs and representatives of the financial sector, were in attendance to hear François Villeroy de Galhau, Gouverneur of the Banque de France, speak on the topic “European Growth – Challenges in uncertain Times.” Welcoming the audience, Dr. Oliver Wagner, Managing Director of the Association of Foreign Banks in Germany, stressed the importance of foreign banks as a critical economic factor for Frankfurt. “Foreign banks assume responsibility for the local economy and recognize the German Financial Centre as the core market in Europe.”

Villeroy de Galhau wasted no time delving into the current state of monetary policy within the EU and how to ensure sustainable growth. Stressing the importance of investment for growth, especially amongst SMEs, he expressed the need for the Capital Markets Union and the movement of risk and capital across borders. He also weighed in on the ECB’s current strategy of negative interest rates, which has been openly criticized by several German bankers. He described the strategy as a crucial instrument in fighting deflation, which he explained would be more damaging than the negative rates. Villeroy de Galhau continued, stating “Negative interest rates are useful but they are just one among many instruments and have their limits. This is why we have to stick to the current monetary policy. And yes, we’re doing so sustainably.” He did, however, reject the notion of the ECB providing helicopter money directly to consumers.

France and Germany are the major drivers of growth in the Union and, according to the Villeroy de Galhau, still have untapped opportunities to ensure sustainable growth for the future. One proposal highlighted in his address would be a so-to-say Erasmus Pro programme which would offer young people the opportunity to gain vocational training outside of their home country as well as provide them the European experience. Such a programme could be particularly useful for France and Germany. France has a demographic advantage in that they have many more young people than Germany, who boasts one of the best training and educational infrastructures in the world. Alleviating this deficit in skilled labour in both countries, and across the EU, would help to ensure sustainable growth for years to come.

Cooperation between France and Germany in the EU is critical for future growth and the success of the European Project. How does this look, however, in a Europe without the United Kingdom? Speculation is still the name of the game when it comes to Brexit, but Villeroy de Galhau did make it clear that they still want London to be at the centre of European Finance, but as Villeroy de Galhau stated, there will be “no free ride, and no cherry picking.” In other words, the UK must accept and abide by EU rules and regulations in order to gain access to European markets post-Brexit.

Frankfurt Main Finance’s Managing Director, Hubertus Väth, summarized the event, “Mr. Villeroy de Galhau encouraged German entrepreneurs to prepare to invest and take on risk. Only France and Germany can set European growth on an adequate track for growth.” Väth continued, stating, “Monetary policy can only be successful if the economy embraces monetary stimulus by accepting and making investments. In this case, trust plays a central role. Mr. Villeroy de Galhau’s contribution today in further developing this trust is not to be underestimated.”

Frankfurt Main Finance Cup 2016: Eintracht bests Celta De Vigo 3:1

For the third year, the football season opened in the Financial Centre with the Frankfurt Main Finance Cup. This year’s Cup pitted the Spanish RC Celta de Vigo against hometown heroes Eintracht Frankfurt in a friendly match on Sunday, August 14, 2016. The event has become a favorite for families and football fans across the region, who look forward to the events surrounding the game. This year fans enjoyed autograph and photo sessions with their favorite players as well as a presentation of this season’s team and their new home jersey.

Finance meets Football at the Alte Oper

The previous evening, Saturday, August 13, representatives of the Financial Centre and the city celebrated the Frankfurt Main Finance Cup at a reception in the Alte Oper. They were joined by the players and coaches from Eintracht Frankfurt as well as Celta de Vigo. In short podium discussion with Fredi Bobic, Eintracht trainer Nico Kovač expressed his optimism for the upcoming season. Representing Frankfurt Main Finance, Managing Director Hubertus Väth emphasized the importance of football for the Financial Centre and the finance industry for football. “Again the Frankfurt Main Finance Cup is sending the message from the Financial Centre that both the financial sector and Eintracht are playing in the international spotlight. Football always dominates Monday morning discussions throughout Frankfurt’s banks. Tomorrow, we will experience that close relationship between the finance industry in the game against Celta de Vigo.”

 

Frankfurt Main Finance Cup – Schwarz weiß, wie scheeee!

On match day, Eintracht came out as strong as their 40,000 fans in attendance. In the eleventh minute, Branimir Hrgota scored off an assist from Alex Meier and then scored again in the 49th minute. Celta de Vigo found the goal in the 58th minute, closing the gap with a score of 2:1. But Eintracht sealed the deal in the 80th minute and with a two-score lead, the Frankfurt Main Finance Cup was as good as theirs. With a final score of 3:1, Eintracht Frankfurt remained on the pitch to accept the Frankfurt Main Finance Cup. Frankfurt Main Finance’s Dr. Jochen Biedermann presented the Cup to Eintracht Captain Alex Meier. The Cup will join the trophies from the 2014 and 2015 Frankfurt Main Finance Cup in the Eintracht Museum.

BaFin-Tech – Fintech caught between Regulation and Digitalisation

On June 28, 2016, Germany’s Federal Financial Supervisory Authority (BaFin) hosted a new conference, BaFin-Tech 2016, in Frankfurt. The sold out conference was attended by around 200 participants representing FinTechs, investors and the broader financial sector. The aim of the conference was to explore regulatory issues that could affect young FinTech companies and new business models. BaFin-Tech consisted of panel discussions and smaller workshops where attendees could gain closer insight into specific themes like Blockchain, Robo-Advisory, Crowdfunding or alternative payment methods.

In his opening address, President of BaFin Felix Hufeld explained that they operate under the principal of same business, same risk, same rules. Hufeld continued, elaborating that, “Supervisors are not a jury delivering verdicts on business concepts. We don’t put up barriers to insulate established companies and we don’t run an incubator for cool newcomers. We are supervision and will remain so. However, what we do want, is to align our administrative procedures accordingly for you as a growing and increasingly more important audience. Accordingly means understandable, fast and, as far as possible, electronic.” Hufeld even invited promising business models which may fall below the required threshold to work with BaFin.

The second panel discussed whether FinTech is a disruption or an innovation. This conversation juxtaposed those in the FinTech sector like Dr. Oliver Vins of vaamo with established actors like Michael Mandel of Commerzbank. After this discussion, FinTech can arguably be characterised as inspirational. While the new innovations from the start-ups may shake up business models and customer demands, it also inspires the old guard to put their full weight behind their digitalisation efforts. Mandel detailed that Commerzbank’s efforts, like integration with PayDirekt, and the board’s goal to completely digitise the customer experience. The conference ended with a reflection from Hufeld, who reminded the audience not to overlook all factors that go into deciding whether a technology is permitted, such as security, anti-money laundering and consumer protection.

As the German FinTech scene has grown substantially over the past year, BaFin-Tech 2016 clearly demonstrated that Germany’s top regulators take FinTech seriously and are invested in fostering innovation in Germany and Europe’s financial sector. The event also proved another advantage of the Financial Centre Frankfurt for young FinTech companies looking for a home. Frankfurt is not just a centre for finance in Europe but also a centre for regulation and supervision, home to the ECB, EIOPA in addition to BaFin.

You can find more information and the presentations from the event on the BaFin website.

On the Move: the Future of Finance

Top masters students from the region’s business schools were invited to the Frankfurt Finance Summit. Mariam Abdelhady, Master of Finance student at Frankfurt School of Finance & Management, reflects here on her impressions from the event.

On May 12th, 2016, I had the great opportunity to attend the 6th Frankfurt Finance Summit, which is organized by Frankfurt Main Finance (FMF) in collaboration with Frankfurt Institute for Risk Management and Regulation (FIRM). The annual summit, highlights the importance of Frankfurt as the center of financials stability and bank regulations in the Euro zone. It gathers Central bankers, regulators, representatives of the supervisory authorities, academics, financial politicians and practitioners together to discuss current financial issues from different perspectives. The focus of this year’s summit was digitalization and its impact on different players in the financial market. The discussions and speeches were divided into four parts:

Digitalization – The Dawning of FinTechs

The Summit started off by Dr. Lutz R. Raetting, Chairman of the Executive Committee of FMF, expressing his pleasure with sustaining the summit for the 6th year in a raw. Refereeing to the title of the Summit, he pointed out to the fact that we are all always “On The Move”, be it voluntarily or due to someone else pushing us to. As digitalization is the main focus of this year’s summit, he mentioned that the number of FinTech companies is increasing in the region and specifically in Frankfurt. The reason for this is the ideal conditions Frankfurt provides FinTechs with, in terms of the proximity to the regulator, as well as the best environment for the internationalization of their businesses.

In support of this view, Hessian Minister of Economics, Energy, Transport and Regional Development Tarek Al-Wazir highlighted the fact that Frankfurt will open its Fintech center in four months with the goal of improving the communication between start-ups, banks and regulators. This in turn will attract investors to Frankfurt and will position the city as an “innovative location for IT-driven start-ups in the financial sector”. Additionally, Al-Wazir stated that the current financial sector is undergoing fundamental changes mainly due to the economic and regulatory conditions and the ongoing digitalization, which explains the focus of the summit.

Examining the impact of FinTechs on the banking sector, Mr. Gottfried Leibbrandt, CEO of SWIFT, explained the concepts of Blockchain and Bitcoin and how they would impact the banking sector and SWIFT. Nevertheless, he believes that banks will make it through, just like they did in the 90s during the first wave of FinTech and the rise of online banking and electronic trading. The key for banks is to make use of those innovations to facilitate their work and not allow them to take over their work, whereas the main threat remains to be cyber security. On the other hand, Hauke Stars, Member of the Executive Board of the Deutsche Börse AG, believes that only those institutions that are able to adapt to the changing environment will survive. In accordance to this view, Roland Boekhout, Chairman of the Management Board of ING-DiBA AG, stated that cooperation with FinTechs in essential, because their technologies and services may be in the interest of their customers.

Redefining Banking – Regulatory and Economic Challenges

Another interesting topic discussed in the summit was the merger deal between Deutsche Börse and the London Stock Exchange. Mr. Carsten Kengeter, CEO of Deutsche Börse, explained the completed steps towards this merger, as well as the implications of this deal on the capital market and the benefits associated with it.

Furthermore, this panel discussed the potential implications of the capital market union on the banking sector, future regulations and the impact of what is believed by some to be BASEL 4, as well as the future of some financial institutions, giving the changing regulations and the rise of digitalization. Although past regulations have resulted in a more resilient banking sector, new ones are believed to make the conduct of some activities more difficult, hence hindering banks from realizing much of the profits they used to gain. Regarding the impact of digitalization and FinTechs on the banking sector, it is believed that they will change the business models of banks. Therefore, it is essential for the supervisory authorities to find the balance between supporting innovation and protecting customers and the financial system as a whole.

Tectonic shift – Where will finance move to?

Federal Finance Minister Wolfgang Schäuble’s speech focused on the proposed referendum on the Brexit and its impact on the future of finance in the EU. Although he advocates that Britain should remain in the EU, underlying its importance to the union, but should the referendum result in otherwise, the exit phase should immediately begin. He believes that Prime Minister David Cameron had negotiated a good deal and that no further concessions and renegotiations would be possible, in case of a majority votes for the exit. Hence he stated that “in means in, and out means out” with all the implications this might have. Additionally, Federal Finance Minister Schäuble highlighted the fact that in addition to the Single Supervisory Mechanism, there are still other areas in banking regulations, as well as fiscal budget, policies and security that will continue to improve in the future, with or without Britain.

Financial Inclusion

Discussing the importance of technology to the financial sector, Mr. Diwakar Gupta, Vice President of the Asian Development Bank, explained, using India as an example, that new technologies, like mobile banking, allows the large portion of the population living in rural areas to access financial services. Additionally, governments should also make use of such technologies, for example to make sure subsidies really reach the poor. Mr. Gupta believes that the biggest challenge for technology-based financial services is getting people to use it for the first time.

Overall, attending this summit was a great experience exposing us to the main topics that might affect the financial sector as a whole and its main players in the near future, with insights from top notch practitioners, as well as financial politicians and regulators of the field. Such unique experiences that Frankfurt School provides to its students, along with academic excellence is what differentiates it from other schools and universities.

British EU Referendum: Possibly the biggest political decision in a generation

In the eyes of Germany’s Federal Minister of Finance Dr. Wolfgang Schäuble, the up-coming referendum on EU membership is possibly the biggest political decision facing the citizens of the UK in a generation of more. Minister Schäuble expressed this in his keynote address at the Frankfurt Finance Summit. He advocated for the UK to remain in the EU, but explained that there would not be any further concessions made. If the UK were to decide for a Brexit, the exit phase would begin immediately. He also explained that the government would not campaign for the headquarters of Deutsche Börse to remain in Germany in the case of a merger with the London Stock Exchange. This will also hold in the case of a Brexit.

Watch Dr. Schäuble’s entire address below.

WHU Master in Finance Students on the Future of Finance

Top masters students from the region’s business schools were invited to the Frankfurt Finance Summit. John Offermann and Xavier Hilderbrand, both Master in Finance students at the WHU – Otto Beisheim School of Management, reflect here on their impressions from the event.

The world of financial studies is full of theories and ideas. Rational economic actors, econometric methods and various pricing models form a standard diet for would be financial aficionados. The question echoing in business schools is how these ideas actually affect the world of finance, and then in turn, the real economy. Thus as students of the Master in Finance program at the WHU – Otto Beisheim School of Management, we greatly appreciated the opportunity to participate in the Frankfurt Finance Summit 2016 and see how financial theory affects practice.

Over the last six years, the Frankfurt Finance Summit has brought together leading stakeholders of the European financial industry to discuss contemporary issues in different parts of the industry. This year’s theme was On the Move and to a large extent revolved around the megatrend digitalization and its continued role in reshaping the financial sector. The summit is organized annually by Frankfurt Main Finance, an initiative that was established to actively promote Frankfurt am Main as one of Europe’s leading financial centers. Members of the organization include the State of Hesse, the City of Frankfurt and other prominent financial institutions in Europe. Lively and engaging speeches and dialogues, with exceptional speakers such as Wolfgang Schäuble, the German Minister of Finance, Carsten Kengeter, the CEO of Deutsche Börse, and Günther Oettinger, the European Commissioner of Digital Economy and Society, illuminated a select audience.

And what an audience: an inspiring blend of roughly 200 personalities from government, regulatory authorities, leading financial institutions and FinTech startups. Throughout the entire event, the atmosphere was pleasant and there were plenty of opportunities for networking and exchanging opinions. We very much enjoyed the chance to speak to different representatives of banks, insurance companies and foreign embassies and to hear their views on current issues facing the financial markets.

The summit began with an introduction by Dr. Lutz Raettig, Chairman of Frankfurt Main Finance, Wolfgang Marzin, CEO of Messe Frankfurt, and Tarek Al-Wazir, Hessian Minister of Economics, Energy, Transport, Urban and Regional Development. Drawing on Frankfurt’s history as a trading hub, each speaker accentuated the qualities that made Frankfurt one of the world’s most influential financial centers, whether that be the presence of institutions like the European Central Bank, or the State of Hesse’s strategic investments in the Messe and various FinTech incubators.

Notwithstanding the warm welcome, Tarek Al-Wazir made a stark warning to the audience: the financial sector is currently failing to support growth in the real economy. He called for financial institutions to better refine their services to support businesses all over Europe. The minister also underscored that a Brexit is not in the strategic interests of Frankfurt and Hesse, despite what would be an inevitable shift of financial clout from London to Frankfurt. This would be a recurring view from various speakers throughout the day.

Following the introduction, Carsten Kengeter took the stage. Having presided over his first Annual General Meeting the day before and on the cusp of a meeting with Wolfgang Schäuble the day after, Kengeter gave extensive insight into the ongoing merger between Deutsche Börse and the London Stock Exchange. In something of a concession to his critics, Kengeter appealed to the audience’s emotions through sound business logic. His case rests on the benefits that the deal would bring to the Deutsche Börse, the German financial community and European economy as a whole. For the Deutsche Börse, the deal will put an end to stagnant revenue and a sliding share of capital vis-à-vis muscular competitors outside the continent. For the financial markets, a united stock exchange company will better facilitate capital flows between London and Frankfurt, respectively the world’s largest financial center and the premier business gateway to Europe’s single largest economy, Germany. Ultimately, the real economy in Europe would benefit from more efficient capital allocation in consolidated rather than fragmented stock exchanges; a natural development of the European Union’s Capital Markets Union drive.

The summit then continued with the first panel discussion – a debate on financial regulation and its future in Europe. The panelists represented states, regulators and leading financial institutions. There was agreement on most overarching points. The panelists largely agreed that overregulation could threaten the industry and that the industry as a whole is better prepared for any future shocks than in 2008. This consensus broke down somewhat when discussing details; there was a considerable mix of views on further developments to the Basel regulations and the effects of new regulations on important retail financial products like mortgages. The panel agreed that future supervisory efforts should focus on enforcing proper conduct of financial professionals rather than dwelling on problems of the past. Towards the end of the discussion, Mr. Hufeld, President of the Federal Financial Supervisory Authority (BaFin) depicted the “three gorillas” facing the industry: low interest rates, FinTech and regulation.

The second part of the Summit 2016 resumed after participants had the chance to discuss the first speeches and debates over a delicious lunch. The second half revolved around FinTech opportunities. Günther Oettinger was the first to speak. He pointed out that digitalization is tremendously impacting the way people and businesses communicate today. He made clear that the European Commission is trying to foster “common standards in a coherent market” to enable technology companies to operate seamlessly in Europe.

The following interview with Gottfried Leibbrandt, CEO of SWIFT, and the second panel discussion were both moderated by Caroline Hyde, Correspondent at Bloomberg Television for European Business. The discussions dealt with FinTech and the question of to what extent entrepreneurial businesses in the financial technology space are disrupting established banks and insurance companies. The general consensus was that FinTechs are increasingly forcing more traditional players to rethink their business models but are not making them obsolete. Most said that FinTechs oftentimes are helping their bigger counterparties to incorporate innovations more quickly into their businesses.

The next keynote speaker was the Finance Minister of Germany, Dr. Wolfgang Schäuble. In a direct, pointed speech, the Minister focused on the implications of the United Kingdom’s Brexit referendum. Similar to Mr. Al-Wazir, Dr. Schäuble emphatically argued that any upside benefit for Frankfurt would be at the expense of the broader European financial industry and economy. Dr. Schäuble pointed out that access to the single European market comes at a cost and the more access a country has, the more it will have to take responsibility for it. Other topics in the speech and question and answer session included the ECB’s current policies, the relative achievements of financial regulators since the GFC and the merits of the Deutsche Börse LSE merger.

At the end of the summit, Mr. Diwakar Gupta from the Asian Development Bank spoke about how FinTech is helping underprivileged people in Kenya and India take advantage of banking services. By using biometric identification technology and inexpensive cellphones, more and more people are being enfranchised by the financial system. It is now possible for people in rural areas of developing countries to open up bank accounts and make mobile banking payments at reasonable prices.

Finally, we want to thank Frankfurt Main Finance for the great opportunity to be part of the Frankfurt Finance Summit 2016. The discussions were tremendously inspiring and we enjoyed the chance to listen and speak to so many brilliant presenters and participants. We highly recommend the Frankfurt Finance Summit to anybody who has the opportunity to be part of it. You won’t be disappointed!

FinTechs Changing the Financial Sector

“The FinTech firms are not about to kill off banks, but they will reshape finance,” declared Günther Oettinger, EU Commissioner for Digital Economy and Society, speaking at the Frankfurt Finance Summit. He explained that the job of regulators is not to stymie the young financial technology companies, but rather to create room for innovation. “The time is right for an open dialogue on digital transformation,” expressed Oettinger. He further outlined the importance of created the Digital Single Market.

Watch the video of Commissioner Oettinger’s keynote below.

Hesse Actively Promotes Development of FinTech Hub in Frankfurt

At the Frankfurt Finance Summit, Tarek Al-Wazir, Hessian Minister of Economics, Energy, Transport and Regional Development, revealed that the planned Frankfurt FinTech Hub will open in September 2016. The Hessian government kicked off this initiative last December with an announcement. The goal is to create an attractive environment in Frankfurt for modern financial technology companies, known as FinTechs. The FinTech Hub should help to facilitate the founding of new companies and help to retain established FinTechs in the Frankfurt Rhine-Main region.

Watch Minister Al-Wazir’s speech below.