c The worlds leading fintech hubs: Part One
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A comparison of the world’s leading fintech hubs: Part One

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Michael Coghlan

In this series, executive search firm 360Leaders compares the world's leading fintech hubs. This introductory article highlights the cities being put under the spotlight.

The seismic events that happened before, during and after the financial collapse of 2008 changed the financial landscape beyond recognition. But while many financial institutions came and went, it accelerated the rise of new financial hubs. What started out as a cottage industry of tech companies offering financial services has bloomed into an industry changing banking forever.

Below are the five fintech hubs that are currently changing the face of finance.

San Francisco

Silicon Valley has, since the 1950s been at the forefront of hardware and software innovation. More recently however, it has turned its attentions to fintech. Globally it has the lion’s share of venture capital investment, executive leadership of blue chip technology companies, and a track record stretching back decades of scaling companies from startups in garages and spare rooms to global leaders.

Top fintech companies

PayPal, Square, LendingClub, CreditKarma, Stripe, RealtyShares, Wealthfront, Coinbase, Ripple, Prosper, LendUp, SoFi, Affirm, Indigogo.

The future

Despite recent shifts in the political landscape in the United States, Silicon Valley continues to be the biggest draw of talent in North America for fintech innovation thanks to California’s progressive finance laws, talent and finance pools. Increased fintech activity is likely to come from tech’s big four, Google, Amazon, Facebook and Apple which will help draw more talent and investment.

NYC

Unlike San Francisco, New York has long been a global destination of finance, making it fertile ground and source of investment for a myriad array of fintech hubs to emerge. Wall Street has both the world’s largest capital base and greatest need for fintech innovation, creating a perfect storm for tech and engineering talent to be able to work and have an impact on how America does business.

Top fintech companies

CB Insights, Aqumin, Enigma, Kasisto, Alpha Point.

Success stories

Betterment, an automated investing service has helped more than 120,000 customers invest more than $3bn leading to a $700 million valuation in 2016. OnDeck, founded in 2012 is a lending platform for small businesses that has loaned over $2 billion across 700 industries in all 50 US states and Canada. Founded in 2007 before the crash, LearnVest provides award-winning financial planning systems and was acquired by Northwestern Mutual in 2015 for $250m.

The future

New York’s place as America’s eminent financial hub isn’t going anywhere. What we do see however is an increase in the collaborative approach by large financial institutions such as Goldman Sachs – who has made forays into blockchain – and the ecosystem that surrounds it.

London

London is unique among all other fintech hubs on this list in that it combines tech, finance and policy making in one city connected by a dense transport network. While Europe and Britain have continued to suffer the effects of the financial downturn, the UK capital continues to grow thanks to a unique combination of capital, talent, demographic diversity and firm regulatory and governmental support.

Top fintech companies

Atom Bank, Azimo, Clear Score, Crowdcube, Currency Cloud, Digital Shadows, DueDil, Transferwise, eToro, Funding Circle, Worldpay, Zopa.

Success stories

Worldpay raised $2.4 billion IPO in 2015 becoming the largest UK FinTech IPO to date and the biggest of 2015. This demonstrated that the UK is not only a great place to start a fintech hub, but that the UK has all the resources to help companies to scale. According to LSE, technology companies that have floated in 2016 have shown strong performance post-IPO, up 64% on average.

The future

While Britain’s place in Europe is now uncertain, it has pushed fintech hubs to reach beyond the EU in search of capital, talent and partnerships to ensure its place as Europe’s preeminent fintech hub.

Brussels

Brussels, while not as outwardly glamorous as other cities on this list, has, since the 1970s solidified itself as a financial hub on par with all others. fintech facilities such as SWIFT call Brussels home as does Euroclear and MasterCard bases its european HQ here. There’s also a favourable tax and regulatory environment and its central European location puts it squarely between trading on Asian and American markets.

Top fintech companies

CashForce, Doccle, Guardsquare, Silver n, Xpenditure, Twikey, Sixdots (Belgian Mobile Wallet), Sign2Pay, Koalabox, The Glue, Gambit, Edebex.

Success stories

The Brussels financial landscape is unique in that while the financial competitors are in close proximity, they have developed a collaborative environment that has collectively created meaningful responses to major problems including identity management, Know Your Customer software and the Internet of Things.

The future

Last year, Belgium’s Ministry of Finance created a digital task force to help drive the fintech sector forward along three key vectors: identity management, cybersecurity and privacy and how to keep supporting the entrepreneurial community. This has drawn key financial and technology players to express their support in helping cement Belgium’s digital finance ecosystem.

Singapore

Singapore has long been one of Asia’s leading financial hubs. More recently however, its reputation as a hotspot for fintech has been bolstered by a $160 million commitment from the Singaporean government to develop the fintech ecosystem. Combined with other initiatives that include Monetary Authority of Singapore (MAS) Innovation Lab, International Technology Advisory Panel and the Regulatory Sandbox, it provides a solid foundation for companies to grow and thrive.

Top fintech companies

Dragon Wealth, Call Levels, Fastacash, MatchMove Pay, MoolahSense, Crowdonomic, Otonomos all have international renown.

Success stories

M-DAQ, a multi-currency conversion service has racked up a valuation of $250 million Thanks to direct MAS support, the National Research Foundation set up a fintech Office to provide a one-stop shop for all fintech hubs to find out everything they need to know about grants, assistant schemes and relevant government departments.

The future

Singapore hosted the Fintech Festival last November and looks set to continue with the event this year. Infrastructure wise, the government is rolling out its United Point of Sales (UPOS) terminals – a smarter, more secure way of managing money – alongside blockchain technology, SoCash withdrawal tech and Banking-as-a-Service facilities.