Despite all its efforts to attract more young financial firms, the banking city of Frankfurt is falling behind the competition. In terms of the number of financial start-ups, known as "fintechs," Munich overtook Frankfurt in 2018, according to a study by the Comdirect bank, which the German Press Agency has seen. According to the study, 95 fintechs have settled in Frankfurt, slightly less than in the Bavarian state capital (100). A year ago, Frankfurt and Munich were still on a par. Berlin remains the undisputed leader with 249 financial start-ups.
"As a fintech location, Frankfurt is not living up to its own expectations," said Comdirect CEO Arno Walter. Munich, on the other hand, has been able to convince with a balanced mix of founders and investors. In the years 2017 and 2018, 22 fintechs were founded in Munich, while only 17 were founded in Frankfurt. And while financial start-ups in the Bavarian capital attracted 174 million euros in venture capital from investors during this period, founders in Frankfurt only managed to attract a fifth of that figure (36 million euros). This puts Frankfurt in fourth place for venture capital behind Munich, Hamburg (236 million euros) and the hip start-up Mecca of Berlin (854 million euros).
Fintechs have introduced many innovations in the financial sector in recent years. For example, they offer consumers new digital payment methods and help them save and invest with online asset management firms or provide comparison portals showing which banks are offering the best deposit accounts. A number of banks are cooperating with start-ups to better adapt to the needs of customers in times of digitalization.
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