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– The capital is the underestimated hotspot in Germany
At Berlin Fintech you will find the latest news about new technologies in the banking and insurance sectors. Probably everyone who has ever dealt with new trends on the financial market knows this term: FinTechs are highly valued by investors and users. FinTech is an abbreviation and means “financial technology”. In principle, it is used to summarise new technologies related to financial services. In Germany, there are a whole range of FinTechs, many of which have chosen Berlin as their location. So what do you need to know about FinTechs?
What is a FinTech?
The term stands for a wide range of digital technologies, all of which deal with financial services. Frequently, a FinTech is backed by a start-up that is financially supported by investors. If a FinTech is backed by a product from the insurance industry, the term “InsurTech” is sometimes used, although the two terms are not always used separately. FinTechs can be divided into five different categories. One category covers the financial sector in the narrower sense, which includes banks and insurance companies. The second category stands for the application for which a FinTech is being developed. Such applications are, for example, retirement planning or financial investments. A third category covers the customer segment, which includes so-called peer-to-peer loans or platforms for corporate financing. The fourth category includes interactions from community banking or online portfolio management. The fifth category stands for solutions that a bank or insurance company offers to its customers itself, such as personal finance management systems, or for solutions that focus on cooperation or competitive offers from these banks and insurance companies.
What role do FinTechs play in Germany?
A recent study by comdirect confirms this: Germany is in demand among FinTechs. In 2018, 127 start-ups were founded, in 2017 the number was 118. As of 30 September 2019, the number of FinTechs in Germany was 898. The growth trend therefore seemed to be continuing in 2019, as 53 start-ups were registered in the first three quarters alone. This is an increase of 11 companies compared to 2018. The “estimated number of unrecorded cases” may be somewhat higher, since many young companies only disclose their business idea shortly before it is ready for the market. This protects them from imitators who copy a new idea too early.
FinTech Berlin: Which companies are in the capital?
Berlin is developing into a hotspot for FinTechs, while London is losing importance. It is not for nothing that the industry is something of a beacon of hope for the development of the European economy. Banks and online payment providers are among the shooting stars. In Berlin, for example, the bank N26 and its direct competitor Revolut can be found, but Klarna – a Swedish competitor to PayPal – has also chosen the German capital as its location. It is to be expected that this positive trend for Berlin will continue.