At the German National IT Summit on November 17, 2016, Germany’s Federal Minister for Economic Affairs and Energy Sigmar Gabriel and Bitkom President Thorsten Dirks introduced Germany’s first five Digital Hubs. The Financial Centre Frankfurt has been appointed as the Digital Hub for Financial Services and FinTech. Hessian Economics Minister and Frankfurt Main Finance Executive Committee member Tarek Al-Wazir praised the initiative at the opening of Frankfurt’s new FinTech Hub, Tech Quartier. Explaining the importance of FinTech for the region, he stated, “the continent’s leading Financial Centre must also take the lead in the highly innovative FinTech sector.” The opening of Tech Quartier marks the culmination of nearly a year’s work from the Hessen Ministry for Economics and the FinTech Dialogue Forum, which was initiated by Frankfurt Main Finance.
The Digital Hubs Initiative, dubbed de:hub and set forth by the Federal Ministry for Economic Affairs and Energy, aims to promote Germany’s strengths as a leading industrial nation and position it as an attractive destination for entrepreneurs, investors, and highly specialised workers from around the world. Bitkom President Thorsten Dirks explained about the hubs, “In the future, executives from established companies will be able to learn from start-ups in these hubs instead of needing to fly to California.” Other Digital Hubs are Dortmund and Hamburg for logistics, Munich for mobility and Berlin with a focus on the Internet of Things.
Even in the digital age, cooperation between start-ups and established businesses and academics functions better in close proximity and promotes innovation. Using Silicon Valley as a touchstone, the Federal Ministry for Economic Affairs and Energy seeks to create digital hubs in Germany where people from all over the world can meet to develop innovative ideas and products. Crucial for a Digital Hub is its existing infrastructure, namely global relevance in the appropriate sector branch, leading academic and research institutions, and a network of supporters ranging from mentors to VC investors.
The Frankfurt FinTech ecosystem has continued to grow over the past years. In 2016, the number of FinTech companies in the Frankfurt region has grown by 45% to 81. Frankfurt is now a close second to Berlin which is home to 87 FinTech companies. Investment in German FinTech is also on the rise. In 2015, German FinTechs drew 524 million euros in funding. Despite a global decrease in FinTech funding, Germany still saw an increase in the second quarter attracting $186 million in funding, placing Germany ahead of the UK. While the Frankfurt FinTech ecosystem is still very much becoming established, a broad base of institutional support and incubators have surfaced in the past years. In addition to the newly opened Tech Quartier, Frankfurt is also home to several other incubators and accelerators, including Deutsche Börse’s FinTech Hub, Goethe University’s Unibator, Accelerator Frankfurt, Main Incubator, FinTech Headquarter and Deutsche Bank’s Digital Factory. Frankfurt Main Finance continues to actively support and promote the Frankfurt FinTech ecosystem and applauds the Federal Ministry for Economic Affairs and Energy for naming Frankfurt the Digital Hub for FinTech as part of the Digital Hubs initiative. Finally, Frankfurt Main Finance’s newly created FinTech membership should help to further promote local FinTechs and help connect them with established players in the Financial Centre.