the Financial Centre Frankfurt

Citigroup Leads Wave of American Banks Choosing the Financial Centre Frankfurt

American investment bank Citigroup is set to expand their operations in the Financial Centre Frankfurt as a result of the UK’s withdrawal from the EU. Initial reports indicate the investment bank will relocate several hundred sales and trading jobs to Frankfurt.

Frankfurt Main Finance (FMF) welcomes the news and is proud that Citigroup, one of the so called big five, has chosen to expand operations in the Financial Centre Frankfurt. Commenting on the news, FMF Managing Director Hubertus Väth said, “It is great news for the Financial Centre Frankfurt and we look forward to welcoming our new colleagues. Citi’s decision supports our estimates of an additional 1,000 jobs moving to the Financial Centre Frankfurt this year and 10,000 jobs coming in the next five years. The reported decision by Citi also reaffirms our confidence that at least twelve banks and perhaps as many as twenty will decide for Frankfurt this year.”

For the past year, the Financial Centre Frankfurt has been in concrete discussions with nearly twenty banks interested in moving operations to Frankfurt. “Last week, Jamie Dimon announced in Paris that JP Morgan will use Frankfurt as their legal base. This was a strong, first signal from the US banks. Following last week’s submissions to the Bank of England, we expect to see the next wave of announcements coming very soon,” Väth explains.

The Financial Centre Frankfurt is in the pole position to win banking business from London following the results of the UK’s referendum. Noted for its strong economic and political stability, Frankfurt and the region offer a top infrastructure, competitively priced and plentiful modern office space, a deep talent pool and an extremely high quality of life. Financial services moving to Frankfurt will find a competent, helpful and welcoming regulator in BaFin, who will accept large portions of applications in English. The Financial Centre is already home to more than 150 foreign banks and 75,000 people employed in financial services.

Euro Clearing

Joint Declaration of Frankfurt Main Finance and Paris EUROPLACE on Euro Clearing

The United Kingdom is leaving the European Union and will in all likelihood lose access to the common market. In light of this, Frankfurt Main Finance and Paris EUROPLACE jointly request the concerned European authorities to consider some fundamental principles regarding future oversight of Euro Clearing:

  1. Central counterparties are key to managing risk for investors. These robust structures are essential drivers of trust in the financial ecosystem.
  2. As a concentrator of risk, CCPs are systemic. In times of crisis, a diverse ecosystem of CCPs plus a clear, manageable resolution process are key prerequisites to preserving stability.
  3. In the case of resolution, the EU Supervisors and the resolution authority must be able to expeditiously reach the appropriate decisions necessary to fully protect European financial security, including its monetary policy constraints in a way that shields European tax payers from potential losses.
  4. In that context, day to day risk monitoring is crucial. It necessitates easy access to information by European supervisors, as well as efficient conditions for access to central bank liquidity based on a one-step decision making process.
  5. The legal framework in which the CCP operates must be EMIR equivalent and the CCP should fall under the jurisdiction of the European Court of Justice.

Frankfurt Main Finance and Paris EUROPLACE urge the responsible European authorities to clarify their position without delay and by doing so, bolster certainty in this systemically relevant pillar of the European financial system.

Download the Press Release

Financial Centre Frankfurt

Japanese Sumitomo Mitsui Financial Group to open two subsidiaries in the Financial Centre Frankfurt

Sumitomo Mitsui Financial Group, Inc. (SFMG), Japan’s third largest bank, will establish two new subsidiaries in the Financial Centre Frankfurt. The decision was announced Monday, July 03, 2017, by SMFG President and CEO, Takeshi Kunibe. According to the group’s press release, the move will allow them to continue to service EU clients after the United Kingdom’s withdrawal from the EU.

Pending regulatory approval, the Japanese financial group intends to establish a new banking subsidiary as well as a securities subsidiary in Frankfurt. The new subsidiaries should allow SMFG to avoid disruption of services to their European clients and provide flexibility given the current political and economic uncertainty.

Frankfurt Main Finance (FMF) welcomes SMFG’s decision and looks forward to welcoming them to the Financial Centre Frankfurt. “Yoku irasshaimashita, Welcome Sumitomo! Brexit starts to bite,” says Hubertus Väth, Managing Director of FMF. “Japanese banks warned early on about the consequences of Brexit and accordingly have taken the lead. With Sumitomo Mitsui, the third Japanese banking group has chosen the Financial Centre Frankfurt. Frankfurt Main Finance expects a total of at least twelve banks to announce their decision for Frankfurt this year.”

In the last two weeks, Japanese banks Daiwa and Nomura also publicly announced their decisions to establish or expand operations in the Financial Centre Frankfurt. Since the results of the UK referendum, FMF has worked to assist financial services to find a new home in the Eurozone. The Financial Centre Frankfurt has emerged as an early front runner amongst European financial centres, noted for its political and economic stability, highly available and competitively priced real estate, deep talent pool, outstanding infrastructure, and high quality of life.

Link to the press release from Sumitomo Mitsui Financial Group, Inc.: http://www.smbc.co.jp/news_e/e600418_01.html

Japanese investment bank Nomura opts for new location in Financial Centre Frankfurt

Another Japanese bank has applied for a banking license in Germany and chosen to base the new business unit in the Financial Centre Frankfurt. Frankfurt Main Finance (FMF) is delighted that with Nomura another Japanese bank has officially decided to come to Frankfurt. “The Japanese banks were precisely the ones, who warned early on about the consequences of Brexit, and now are among the first to decide,” says Hubertus Väth, Managing Director of the Financial Centre initiative Frankfurt Main Finance.

“We would like to thank Nomura for their trust in the Financial Centre Frankfurt and look forward to welcoming our new colleagues. Nomura is already a member of Frankfurt Main Finance. We expect their announcement to act as a signal, and that further decisions by other prominent institutes will follow in the coming weeks.”

Just a few days ago, the Japanese Daiwa Securities Group announced their decision for the Financial Centre Frankfurt.

Press Release from Nomura Bank.

Brexit Negotiations

Frankfurt Main Finance hopeful for constructive Brexit negotiations

With the formal declaration by the United Kingdom’s government to withdraw from the European Union, Brexit has now entered a new and decisive phase. Hubertus Väth, Managing Director of Frankfurt Main Finance e.V. states, “The beginning of the exit negotiations between the United Kingdom and the European Union are imminent. The negotiating parties are entering uncharted territory. Of the utmost importance, will be standing fast to the maxim that maintaining stability in the financial system must take precedence over individual interests. Both parties must strike the delicate balance between averting a cliff-edge scenario while still maintaining the recognizable appeal of membership in the EU.”

Frankfurt Main Finance continues to regret the United Kingdom’s withdraw from the EU and anticipates the loss of rights, including passporting. Managing Director Väth further explains, “The Financial Centre Frankfurt is exceptionally situated to assume a position functioning as a bridge for London into the EU. As the home of the European Central Bank, the Europe’s insurance supervisory mechanism, Europe’s largest stock exchange and the largest internet hub for data traffic, Frankfurt offers best infrastructure for credit institutions and financial services providers active across Europe. Frankfurt’s TechQuartier and dynamic, growing FinTech ecosystem have been distinguished by the Federal Government with the Financial Centre Frankfurt’s appointment as Germany’s Digital Hub for the finance industry. Therefore, we still estimate that around 10,000 jobs will be relocated to Frankfurt in the coming years.”

Contact Person for Media Inquiries:
Dr. Ralf Witzler
Frankfurt Main Finance e.V.
Telephone 069 94 41 80 – 50
ralf.witzler[at]fmfinance.de

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.

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.