European Capital Markets Union Promises Sustainability

The planned Capital Markets Union will offer new financing methods to small and medium enterprises (SMEs. For small businesses in Europe, the issue of securing capital is becoming increasingly important. In the future, companies in Hesse are also expected to benefit from the European project and had the opportunity to inform themselves about these opportunities today at the Chamber of Tradecrafts in Frankfurt. The European Commissioner for Financial Stability, Financial Services and Capital Markets Union, Lord Jonathan Hill, and the Hessian Minister of Finance, Dr. Thomas Schäfer, discussed the benefits of the proposed capital market Union with about 30 representatives of Hesse’s SMEs and representatives of the banking and finance sector. The companies were also able to express their wishes for future development of the Capital Markets Union.

The workshop organised by the Hessian Ministry of Finance and Frankfurt Main Finance illustrates the close cooperation with SMEs and should promote further discourse.

Dr. Lutz Raettig, Chairman of the Executive Committee of Frankfurt Main Finance, underlined the role of SMEs in this process: “The voice of the business community is essential for the success of the Capital Markets Union in Hesse and throughout Europe. The companies’ access to alternative financing holds great potential for Europe,” said Raettig.

The Hessian Minister of Finance, Dr. Thomas Schäfer, pointed to the development opportunities for SMEs brought with the Capital Markets Union: “When properly implemented, the creation of a Capital Markets Union allows us to improve the financing opportunities for our companies spurring increased long-term economic and job growth. At this point, the Chambers of Tradecrafts can make a valuable contribution with their experience and expertise. In addition to expanding the range of financing options – which should not to replace but act alongside financing from banks – regulatory complexity and unnecessary regulatory requirements must to be reduced as soon as possible. In order for an effective implementation to be successful, it is vital for the politicians to understand the specific problems and needs of business owners. After all, they are the ones for whom the project is intended to serve.”

Hesse’s Minister of Finance made it clear: “The Capital Markets Union is good for the future of the Hessian SMEs. The State of Hesse is already strongly committed to the small and medium enterprises in the region. For example, the Innovationsförderung is responsible for the promotion of innovation in Hesse through support of technology-oriented research and development projects of SMEs and universities in cooperation with other partners from industry and research.”

Commissioner Hill said: “German SMEs are the backbone of the economy and are a major engine of growth. One of the goals of the Capital Markets Union is to open up businesses in Europe a greater choice of financing sources. This should help them to invest and grow. I want European start-ups and companies to find the funding they need in Europe.”

The long term goal of the EU initiative is to create a single capital market. This should result in rising levels of investment and thus growth and employment in the EU. The Capital Markets Union is a project which is being pursued in Europe with great commitment. The discussion is based on the European Commission’s Action Plan on Capital Market Union published September 30th. The plan envisions an EU-market for simple, transparent and standardised receivables securitisation. The plan also calls for a Europe-wide legal framework for covered bonds, investment by insurance companies and asset managers, venture capital and crowdfunding. The foundations for establishing the Capital Markets Union should be laid by 2019.

Four New Members Pledge Support to the Financial Centre

In the most recent Executive Board meeting, Frankfurt Main Finance e.V. accepted new sustaining members. Goldman Sachs, the law firm Taylor Wessing LLP and the FinTech consulting firm, Techfluence Consult UG have pledged their support to the financial centre, Frankfurt. WM Group joined already in April of this year.
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Fintech Studie

Rhein-Main-Neckar is Germany’s Most Dynamic FinTech Region

  • In 2015 1.2 billion euros were invested in German FinTech companies
  • 250 FinTech companies employ about 13,000 people in Germany
  • Germany is the second largest FinTech location in Europe – behind Great Britain and the fourth largest in the world
  • Berlin and the Rhine-Main-Neckar Region are the leading locations in Germany
  • Number of FinTechs in the Rhine-Main-Neckar Region grew in 2015 by 22 percent to 56

In the German FinTech sector the entrepreneurial spirit prevails: the number of young technology companies in the financial services sector, FinTechs, grew last year by 32, now totalling 250. The amount of Venture Capital funds invested in these Start-Ups has nearly tripled from ca. 200 million Euros in 2014 to 576 million Euros in 2015. In Europe, only the UK has the edge, with 707 million Euros being invested in FinTechs. The British FinTech scene now employs around 61,000 people whereas in Germany FinTechs employ about 13,000 people. Taking into account the acquisition of 360T by Deutsche Börse, the total investment in German FinTechs for 2015 is 1.2 billion euros.

Within Germany, two regions have distinguished themselves as FinTech hotspots: Berlin is currently home to 70 companies and the Rhein-Main-Neckar region is home to 56. The Rhein-Main-Neckar Region, however, has proven to be the most dynamic in the past year. The number of FinTech companies there rose by 22 percent compared to the nationwide growth of 13 percent.

These are the findings of a study commissioned Frankfurt Main Finance and conducted by the auditing and consulting firm EY. The study examines the German FinTech industry and identifies potential areas for advancement.

“The region is much broader and more dynamic than generally assumed,” says Jan-Erik Behrens, one of the study’s authors and executive director at EY. “There are a surprising number of FinTech companies quietly but effectively pursuing their work. Even though two-thirds of the companies studied come directly from Frankfurt, the appeal of the financial centre goes far beyond the city limits of Frankfurt and Eschborn. Compared to the rest of Germany the region is in second place, falling closely behind Berlin and significantly ahead of Munich,” said Behrens. “Above all, in the recent years the region has gained significant momentum.”

Compared internationally, Germany has rallied strongly in recent years, according to Christopher Schmitz, co-author and partner at EY. “The German FinTech industry is one of the challengers in the market. It is clear that Germany and particularly the region around Frankfurt will play an even greater role in the future if the planned Frankfurt FinTech Centre is realized.”

Support from Dialogue Forum FinTech Frankfurt Rhein-Main

“Dialogue Forum FinTech Frankfurt Rhein-Main, an initiative of Frankfurt Main Finance with support from EY, is comprised not only of some 50 public and private institutions but also numerous FinTech companies (list of members enclosed). They are united in the goal of establishing an attractive, successful, and sustainable FinTech ecosystem in the region and to see who can bring what to the table,” explains Dr. Lutz Raettig, spokesman for the Executive Committee of Frankfurt Main Finance. “The support and engagement we’ve seen is quite remarkable.”

Under the leadership of Tarek Al-Wazir, the Hessian Minister of Economics, Transport, Energy and Land Development and member of the board of Frankfurt Main Finance, the State of Hesse has initiated the establishment of an independent and inclusive FinTech Centre in Frankfurt. “As part of the digital initiative, we are working closely with the city, the region and local industry to create a centre for young FinTech companies. Our region has the best conditions for this, offering the necessary infrastructure, the university landscape, the proximity to the regulators, the ECB and the Bundesbank, and networking with industry. Moreover, Frankfurt has the international connections that are essential for a global FinTech industry. This initiative will permanently strengthen Hessen as a business location,” says Al-Wazir.

The venture is also actively supported by the City of Frankfurt. Peter Feldmann, Lord Mayor of Frankfurt, explains, “Our objective is to make Frankfurt the number one FinTech hub in continental Europe. Here, young entrepreneurs will discover the most international city in Europe with the highest economic potential. To this end, we cooperate extensively with the State of Hesse and the Finance Industry. Our optimal resources have been and are consistently confirmed in numerous city rankings.”

This support convinced WebID Solutions, Europe’s leading provider of high-security AML compliant verification and online contracting procedures. CEO Thomas Prince announced at Börsen-Zeitung’s Finanzplatztag (Financial Centre Day) that WebID wants to move their offices to the financial centre and, if possible into the new FinTech Centre. “We are planning a six-fold increase of our revenues in 2016 and our customers are here. In addition, the commitment of those involved with the FinTech initiative is quite unique. The financial centre offers us the broad international network needed for our planned expansion. We witnessed this first hand on delegation trips to India and Korea. We brought back very concrete business approaches that will secure additional growth potential.”

Deutsch Börse has emphasized its broad commitment to FinTech. Just last week, they presented their FinTech initiative in Frankfurt. Furthermore, Eric Leupold, Head of the Venture Network of Deutsche Börse, sees the financing situation for these growing companies significantly improving. “Deutsche Börse’s new Venture Network is in Frankfurt and ready to bring high-growth companies together with investors. We are committed in every way to the financial centre.”

Renminbi is a Top Priority in the Financial Centre

The German finance sector welcomes the agreement to open a clearing bank in Frankfurt for trade in renminbi. Frankfurt is the first financial centre in Europe with such an agreement and the only renminbi clearinghouse in the euro zone. Companies in Germany and Europe will benefit in China trading of improved conditions. Read more

Unterzeichnung MoU Frankfurt und Busan

Frankfurt Main Finance Signs Cooperation Agreement with South Korean Financial Centre Busan

The South Korean city of Busan and Frankfurt Main Finance aim to mutually promote and strengthen their financial centres. This is the subject of the Memorandum of Understanding, signed today by representatives of both parties at the premises of Frankfurt Main Finance. The city of Busan was represented by Deputy Mayor Cho Donyoung, as part of a delegation visit made up of representatives from the Korean finance industry and government officials. Frankfurt Main Finance was represented by Wilhelm Speckhardt, Mayor of Eschborn, in his capacity as member of the Management Board and the Executive Committee. Read more