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The Up-and-Coming FinTech Hubs You Need to Know About

The term “fintech hub” is synonymous to two locations: London and Silicon Valley. These fintech ecosystems and financial centres have managed to establish themselves as startup havens, the place to be if you have an idea that aims to change the business world as we know it.

Is location an influential component in the success of a business? Unequivocally. The choice of country and city has multitude of implications for the overall health and development of a company.

Let’s start with lifestyle. When contemplating success factors for your business, the food scene, the weather, public transport, and rent prices are not the first things that spring to mind. Quality of life might not appear on the balance sheet or business plan of a company but it’s an intangible element to building the right foundation. Companies are nothing without people and people have lives outside working hours.

“Work-life balance” is not just a fancy term but a real dynamic that directly affects the productivity, creativity and work rate of a company’s workforce. Speaking of the workforce, let us segway to this.

Like we already said, companies are nothing without people, making talent one of the main considerations for any fintech startup. Recruiting the right people might just be what makes or breaks your attempt to realising your idea. Linking this idea back to location, it’s essential to consider things such as the educational level of a city, the demographics and talent pool available to staff your company.

Local talent is not the only thing fintech companies look at. The ability to attract talent from all around the world is another big part of the conversation. Visa requirements and the overall regulatory environment surrounding immigration can be a deciding factor in a company’s choice of where to set up their offices.

Why has London Become a FinTech Hub?

One of the reasons London was an obvious motherland for many financial technology companies is the fact that it was already an established business and global financial center. A company wishing to set up house in London would never have to worry about sourcing talent but also it would stand to benefit from the networking possibilities, synergies and overall environment of the city.

London is considered the capital of Europe, a financial services center and one of the biggest players in the global economy. If you couple that with the city’s open minded, refreshingly progressive attitude to financial regulation, what you get is a global fintech hub.

As you very well know, things change in business and they change fast. The whole Brexit debacle has somewhat shifted this notion and created a new reality for the city of London. Whilst all of the reasons that make it the place to be still hold value, it would be pretentious to act as if companies aren’t looking elsewhere for “shelter”.

What Brexit managed to create is an air of uncertainty, an aura of unpredictability and unreliability for businesses of all sizes and sectors. The first thing a fintech company needs is stability. Their mission of trying to disrupt one of the most rigid industries known to mankind is already challenging so political and economic disruption is not something they are looking for.

How Big is FinTech?

Revenue generated by fintech companies will skyrocket from approximately $263 billion currently to $638 billion by 2024 according to a Juniper Research forecast. A 2018 report from KPMG comes to enforce the idea of a booming fintech industry by recording the following stats:

  • Global investment in fintech companies hit $111.8B with 2,196 deals
  • US fintech companies received investment of $52.5B across 1,061 deals
  • Investment in fintech companies in Europe hit $34.2B with 536 deals
  • Investment in fintech companies in Asia hit $22.7B across 372 deals

A few days ago, the Australian Business review published an article named “Fintech is going to be much bigger than you think”. Here’s an interesting snippet from the article:

“In a recent study, Fintech in Australia – Trends, Forecasts and Analysis 2015–2020, research firm Frost & Sullivan says the Australian fintech sector is poised to take $10 billion in aggregate revenues away from the big Australian banks, while contributing $3 billion of new revenue to the Australian financial services sector, by 2020.”

No matter the source, the message is consistent, loud and clear: fintech development ain’t slowing down anytime soon, nor is the hunt for the perfect hub to start such a business.

The Hubs

It’s time to cut to the chase. Whilst London and San Francisco still hold the crown of the most famous fintech and venture capital hubs, there are cities that are gearing up and coming to get them.

Each country/city brings a unique set of qualities that make it attractive to fintech companies. Let’s explore.


We don’t need to look any further than the country’s report “The Fintech Landscape in Lithuania”. The report establishes one thing: the government and regulations have been strategically geared up to create a business friendly environment, a fintech ecosystem that’s both inviting and functional.

Here are some interesting facts:

  • 14th among 190 countries in the Ease of Doing Business
  • 2x increase in IT study funding in 2017
  • 20% increase in IT student pipeline over 2013-2016

Not convinced? Look at the IMD World Competitiveness Center’s latest report. Lithuania is climbing up the ranks claiming the 29th overall position. The key indicators that pushed Lithuania to that position are:

  • Dynamism of the economy
  • Business-friendly environment
  • Reliable infrastructure
  • High educational level
  • Skilled workforce

Whilst all of the above are important factors as to why Lithuania is becoming a hotbed of fintech startups, the game-changer is the country’s ability to process and issue electronic money institution licence applications. Lithuania can do that in as little as three months, which is nowhere near the 12 months needed from other EU countries.

In an interview with BBC, Marius Jurgilas, board member at Lithuania’s central bank said the following: “We needed to find our competitive edge. We thought: we are part of the European Union, why not leverage that? Not just movement of people but movement of services too.”

The Baltic country saw Brexit as an opportunity to attract companies that need such licenses. It seems like the government and all related parties have worked meticulously to create an ecosystem that facilitates and lubricates such moves.


The beach, sun and delicious halloumi cheese are not the only reasons to visit Cyprus. The gem of the Mediterranean is making some serious moves when it comes to business and fintech companies are taking notice.

The CySEC (The Cyprus Securities and Exchange Commission) established an Innovation Hub last year to create a solid framework for the on-boarding of fintech companies.

According to Demetra Kalogeriou, Chairwomen of CySEC “The establishment of the Innovation Hub marks an important and exciting step for CySEC’s supervision of new and innovative Fintech companies in Cyprus. In promoting closer ties with these fledgling but fast-growing industries, we aim to best protect investors by fully understanding the risks and benefits of these new products bring.”

Fintech hub

The Innovation Hub is a great addition to an already stacked lists of reasons companies choose Cyprus for relocation. At the top of that list is the business-friendly tax system that boasts a  uniform 12.5% corporate tax rate which is one of the lowest in all of Europe. There is no limitation between the residence and the nationality of the owner.

The beneficial tax system’s pros don’t stop at the corporate tax level. The country has established over 40 double tax treaties and provides 0% tax on interest income, dividend income, and profits from disposal of shares, bonds, debentures or other securities. As of 2017, in order to be fully taxable permanent residents need to actively stay in the country for a minimum of 60 days per year. This is a sharp contrast to the 183 days required in most territories.

What does the “60 days rule” mean for entrepreneurs? Freedom. Freedom to travel for personal and business reasons. Furthermore, setting up your company in Cyprus is also a piece of cake as the government has made it simple, fast and effective.

If none of the above convinced you we even have a video for you. A number of notable CEOs of multinational companies based in Cyprus, share their business experiences and give insight as to why Cyprus is becoming so much more than a holiday destination.


Frankfurt is probably the least surprising city to make it on our list. The writing’s been on the wall for a city that is home to the European Central Bank, more than 200 banks and innovative initiatives such as Digitalfabrik by Deutsche Bank.

The German metropolis has both the history, financial institutions ecosystem and infrastructure to make a claim as Germany’s fintech capital. Just for reference, the city is home to the largest stock exchange in Continental Europe. According to Startup Genome’s annual startup ecosystem report, Frankfurt employs over 70,000 people in the financial services industry and provides “shelter” to 5 “Forbes 2000” companies.

Frankfurt is not only appealing because of its close ties to the financial services, but because of its multi-layered accelerator programs. These initiatives create a community surrounding startups and provide an abundance of resources such as mentorship programs, networking events and financing. Two of the most well-known accelerator programs are Accelerator Frankfurt and Finlab.

São Paulo

The closest association you can make when you hear the name São Paulo is football or the iconic image of the endless string of houses also known as favelas. The last thing you associate with the brazilian city is a blossoming business scene.

South America’s largest city is changing perceptions and is emerging as an innovation destination unlike no other. The city boasts a mixture of established business powerhouses such as Spotify, Airbnb, Google, Netflix and Amazon and “unicorns” such as rental property startup  Quinto Andar.

What’s interesting to note is that part of the city’s appeal is its dysfunctionality. Startups see the city not only as a place to set up their offices but a live, real-time case study for their idea. What makes the city qualify for such a test is its size. If the idea qualifies in São Paulo you have reasonable proof it can be applicable to other major markets across the globe.

A 2017 Deloitte report under the name “A tale of 44 cities: Connecting Global FinTech: Interim Hub Review 2017” puts things into perspective.

“The Brazilian FinTech Scene is booming. With around 220 startups and VC investment reaching US$161 million in 2016, Brazil currently has more FinTechs and FinTech investment than any other country in Latin America. In the last couple of years, many of the country’s financial institutions have invested in FinTech by providing investments, support and workings spaces.”

fintech hub

The positive climate regarding fintech is enforced by commitments from the country’s government. The country issued two major laws that immediately affected the fintech sector. The first came in July 2017 and decreased registration requirements for crowdfunding platforms offering securities of small amounts. The second came in April 2018 and authorised the simplified licensing of direct and peer-to-peer electronic lending platforms, essentially removing the need for them to transact via a third-party licensed financial institution.

In a recent interview, Octavio Damaso, director of Brazil’s Central Bank, talked about the bank’s vision for fintech as “a new regulation would lead to a further development of the ecosystem within a legal framework.”

2019 is big for São Paulo and Brazil as a whole. Don’t be surprised if the next success story hails from a city known for its low to middle-income, unregulated neighborhoods.

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