Findexable report: London bests other European fintech hubs despite Brexit
According to Findexable’s Global Fintech Index City Rankings 2020, London has maintained its place as the second top global fintech center, despite Brexit uncertainty.
San Francisco secured the top spot – up from eleventh place last year.
The report analysed 7,000 fintech companies across 230 cities. It measured locations based on “soft metrics” such as: the number of key industry events, fintech incubators or accelerator programmes. It also included “harder metrics” such as access to online payment services or the number of local fintech unicorns.
Findexable’s report decided to locate fintechs based on where they have seen true scale, rather than where they officially began operations. “It’s our belief that in a global economy the ecosystem that enables you to succeed at scale is what defines you,” the report said.
The misalignment between the top ten cities and the top ten countries was a highlight within the report. Whilst the top ten cities include Sao Paulo (4), Bangalore (7), Berlin (9) and Mumbai (10), the top ten countries include Lithuania (4), Switzerland (5), the Netherlands (6), Sweden (6), Australia (8) and Estonia (10) – all countries whose cities do not feature in the top ten.
“[There is] a worldwide de-coupling between the financial strength and the commercial domination of traditional financial centres,” the report said. “Financial wealth is no guarantee of a city’s status as a fintech hub. You might call this the rise of non-traditional finance.”
Of the world’s top 100 leading fintech cities, almost half are in emerging markets which shows “the breaking of an assumed link between a city’s status as a start-up city and its position as a fintech hub”.
But despite this geo-diversity, the gender split in fintech is still considerably lacking in diversity. The report found just 12% of fintech founders are women, and that just 18% of ‘banking leaders’ are women.
This is despite the fact companies in the top 25% for ethnic diversity are a third more likely to be more profitable than industry peers according to a McKinsey & Company study last year.
The report also looked at what each country is good at within the fintech space. Whilst the Americas (1) were commended for payments, business to business (B2B) fintech and security, the UK was recognised for challenger banks, personal finance and wealth, lending and blockchain technology development.
Switzerland and Canada were noted for cryptocurrency achievements, just as Sweden and Singapore where both commended for their attention to the small to medium enterprise (SME) space.
And despite the hum around China’s fintech movements this year, most recently including its race to become the first country with a regulated digital currency, it’s in fact India which “currently holds Asia‘s fintech hub crown”.
Both countries have the same percentage of unbanked citizens (20%), but it now looks like India is catching up with China’s fintech investment record. With 23 venture investments into Indian fintech firms occurring during the second quarter of 2019, China was put on the back foot when it only achieved 15 in the same time period.
The report names some of the “wagers” for next year – i.e. countries which are rapidly climbing the ranks and ones to watch. These include India, Brazil – which was up 18 rankings this year, Luxembourg – which went up 30 from last year, Mexico and Malta – which went up a staggering 56 places this year.
The report was formed in partnership with StartupBlink, Crunchbase and SEMrush.