Here’s what the assessments conducted by research institutes and analysts from the world’s leading FinTech Hubs say.
FinTech is a global market in continuous growth and expansion, which moves very important figures. At the moment the main beneficiaries of this turnover are the United States and China, but the situation is changing in Europe too, especially in United Kingdom.
Given this context, the dynamism of startups has to deal with a very complex series of factors, all to be considered and kept in mind if you want to invest in this sector.
In fact, we speak of “FinTech hub” to define the focal points of FinTech activities within a geographical area or a network. They are in fact the ecosystems made up of infrastructures, organizations and people within the hub, but also the way these elements are organized and interact with cities or regions.
With this in mind, which countries have the strongest potential for entrepreneurship, innovation and FinTech in the world?
According to Forbes, the five best countries to open a startup, especially in terms of prices and upfront costs, are the United States, the United Kingdom, Australia, France and Chile. It changes if we take into consideration the data of the World Bank, which took into account parameters different from those of Forbes. In this case, the countries in which it is more convenient to start a start-up are the United Arab Emirates, Holland, Finland, Saudi Arabia and Lithuania.
Let’s see, instead, which are the best cities in which to open a startup, at least according to the analysts of the main FinTech Hubs.
Fintech: the 10 ideal cities to open a startup
- Singapore
- Zurich
- Stockholm
- Geneva
- New York
- Amsterdam
- London
- San Francisco
- Toronto
- Hong Kong
The ranking was compiled by the Institute for Financial Services Zug (IFZ) of the University of Applied Sciences in Lucerne, through a study that identifies the regions with the strongest FinTech ecosystems using factors generally associated with the promotion of entrepreneurship and innovation, as well as indicators relating to financial technologies (PEST/ political-legal, economic, social, technological analysis). It is contained within the IFZ FinTech Study.
Deloitte also used the same approach of the IFZ to create its Global Fintech Report, by cross-referencing data and analysis in a thoughtful manner relating to the area of talent, capital, demand and politics and regulation. The ability to attract talent in key areas of finance, technology and entrepreneurship is crucial to the success of hubs on a global scale. Access to capital, whether it comes from private investors, governments or companies, is also a key driver of FinTech activities through hubs.
As in any other sector, even in the FinTech field it is the demand that drives the supply, whether it comes from consumers (B2C) or from other activities (B2B). If this equation is true, for major financial hubs (London, Chicago, New York, San Francisco and Hong Kong), the presence of strong financial services does not always equate to a strong FinTech hub: for example in Tokyo, despite a financially powerful industry, FinTech has taken off more slowly due to other factors, such as regulation.
Where is there favorable legislation
Indeed, it is politics and laws that represent another decisive element in the development and success of a FinTech hub. Governments and regulators need to find a balance between promoting innovation and competitiveness and protecting investors and consumers. Two of the most important FinTech poles in the world testify to this, namely London and Singapore, with their legislation and the bodies in charge (respectively the Financial Conduct Authority and the Monetary Authority) in continuous evolution, seen as real pioneers in the field.
Government measures can also make a difference, as happened for example in India, where the Government has established programs and planned investments to support the development of FinTech and startups in the country.
A comprehensive analysis of the list
The ranking proposed by IFZ is led by Singapore, thanks to its exceptional political and legal environment: a small market, but rich in technological talent, which has also developed thanks to immigration laws more favorable than the British ones, able to attract numerous foreign "brains" to itself. It is no coincidence that here 70% of the founders of FinTech companies are immigrants.
In second and fourth place two Swiss cities: Zurich and Geneva, thanks to their solid performance from a political and legal point of view (in this area they are in first place among all 30 cities). High political stability, low level of corruption, high level of freedom of press and moderate corporate tax rates are key factors in their success, while improvements on the technology side are possible.
In fourth place is Stockholm, while London, a city that in past years had always been considered the world capital of Fintech, thanks to the great tax incentives and the legislative framework, must "settle" for the seventh. Amsterdam, Toronto, New York, San Francisco and Hong Kong complete the top ten in the general ranking of techno-financial hubs.
Followed by Frankfurt and Sydney. In the first, as well as in Berlin (thirteenth), it seems to be convenient to rent space for startups, but foreign investments remain scarce. Sidney, on the other hand, is an ideal city thanks to the government’s digital agenda (National Innovation and Science Agenda) and the introduction of tax incentives with an English footprint. Italy is also present, with Milan in 28th place (it is no coincidence that most of the best Italian startups to work in are based in Milan), after Beijing and before two Chinese cities, Warsaw and Santiago de Chile.
Original article published on Money.it Italy 2022-10-27 19:07:02.
Original title: Mappa del Fintech: i migliori paesi dove lanciare una startup e perché
