Published on September 15th, 2016

Why Fintech in Berlin?

If you’ve seen a gap and want to join the Fintech world, Berlin is the place to be. As the capital of Germany, the city has the highest number of startups per capita in the country. In 2014, investments’ growth was more than 200%, enabling the Fintech world in Berlin to expand.

Surprisingly, unlike London, Berlin is not the home of major banks or venture capital firms. According to Dataconomy, since German banks have a certain instability, the German financial climate becomes perfect for Fintech. Shown by the creation of 139 Fintechs in Berlin in 2014, “Berlin has proven [to be] the perfect city for startups to enter the playing field.”

What makes Fintech companies in Berlin competitive is an efficient and quickBerlin roomway to simultaneously increase the access, transparency, and returns in the industry. According to The Fintech 2.0 Paper: Rebooting Financial Services, Fintech has two unique selling points: Better use of data and frictionless customer experience. Not only has the Fintech world become attractive to customers who are tired of dealing with banks, but the industry has also created innovational and lean operational set up for everyone.

Banks have waited long enough to start supporting Fintechs, and so DKB, Commerzbank, and Deutsche Bank among others have opened their arms to collaboration leading to a powerful mix of innovation, reliability, and information. According to a report from 2015 by the Economist Intelligence Unit titled “The Disruption of Banking”, the strengths of the Fintech industry as the limited product set, absence of legacy system, and flexibility outweigh the weaknesses as consumer trust, risk management expertise and capital because they can be gained over time. Consequently, according to The Financial Brand, “The overarching advantage provided by most fintech solutions is the ability to make consumers lives easier. By leveraging technology to deliver value and convenience, fintech firms have targeted those services with the most friction in the delivery process as well as those with the greatest financial margins.”

So why Fintech and why in Berlin? The atmosphere in Berlin is young, creative, and fresh combining an elaborate history with assorted culture which makes new ideas welcome to the market. As the city tries to make its mark on the Fintech world, it is providing more and more opportunities to entrepreneurs with innovative and marketable business strategies. With the widespread knowledge of English and low cost of living, the capital of Germany is attracting a very heterogeneous mix from all over the world. Furthermore Berlin has been chosen to host the IoT and fintech hub, as part of the national Digital Hub Initiative, a program developed to strengthen the digital market progression in Germany. As a Fintech key player in the city, finleap was selected by the Berlin government to run the hub and drive this national transformation. At the same time finleap serves as the perfect example for diversity. With employees from more than 30 countries, the company combines many ideas to successfully launch 4-6 startups per year. Learn more about finleap’s career opportunities here.

Who will benefit? According to a report titled The Future of FinTech: A Paradigm Shift in Small Business Finance by the World Economic Forum from October 2015, “The overall potential of FinTech for small business and thus for the economy as a whole seems tremendous. Opportunities exist for national governments, development finance institutions, entrepreneurs and investors to support and, at the same time, benefit from this trend. Incumbents have the option to cooperate with new players, innovate from within or strategically acquire companies.”