New FinTech companies are emerging around the world on a weekly basis. Most of these start-ups concentrate around so called hubs – ecosystems that provide the necessary infrastructure for them to prosper. With the FinTech sector booming, these hubs aim to outcompete each other via offering different incentives to attract newcomers. The rivalry has particularly intensified in Europe, where London’s post-Brexit status is being challenged by other European hubs, including Berlin, Paris, Dublin and Amsterdam.
From local to global
Despite the fierce competition, there is an increasing number of initiatives worldwide that aspire to foster collaboration among FinTech hubs. However, to date, these attempts have been limited to country-level associations and bilateral cooperation, mainly in the form of bridges. It is, therefore, perhaps slightly surprising, that a significant number of FinTech hubs have recently signed up to collaborate within an official framework. Earlier this month, Innovate Finance, the UK industry body serving the FinTech community, and Innotribe, the innovation branch of SWIFT, the financial messaging services provider, have launched the Global Fintech Hubs Federation (GFHF), an “independent, neutral and global network of FinTech hubs” designed to “foster innovation in the financial services industry”.
27 hubs worldwide, all under one roof
The GFHF is the first truly global network of emerging and established FinTech centres. The Federation, which will be officially launched at the Sibos banking conference this month, comprises 27 members from more than 20 cities around the world, including hubs from the UK, Germany, Hong Kong, Australia, Canada and Mexico – with the US the only major FinTech centre without a representative. The Federation is made up of associations and industry bodies that “nurture startups, promote policy dialogue, and further FinTech growth in their region”, complemented by network partners that “support the mission of the Federation by providing expertise, insights and access to global networks”.
The Federation has set out its mission to “foster engagement amongst the global FinTech ecosystem”, “share best practices and standardise knowledge” as well as “build bridges for greater collaboration between FinTech hubs”. On the other hand, it also plans to evaluate member hubs based on criteria such as the regulatory environment, the ease of doing business as well as the access to funds and expertise. While, in line with the Federation’s collaborative endeavours, this proposition is designed to help centres identify areas for improvement, it could also fuel the rivalry among them.
The Global Fintech Hubs Federation is undeniably the most ambitious attempt to date when it comes to coordinating FinTech hubs globally. Although the exclusion of the US – the world’s leading financial technology centre – somewhat curbs the status of the Federation, this impressive club of global FinTech hubs promises to be a force to be reckoned with for the future. Whether the GFHF will foster cooperation among its members and so help them challenge leading FinTech hubs in the US, or instead increase rivalry within the group, is a very exciting story to keep an eye out for.