A “FinTech Federation” comprising technology groups from more than 20 cities around the world is being set up by British FinTech trade body Innovate Finance, and Innotribe, the innovation ARM of SWIFT, the financial communications provider.
Fabian Vandenreydt, the global head of Innotribe and the SWIFT Institute, described the proposed federation as “a group of equals, a group of people that globally support innovation for the benefit of the banks and the start-ups.”
The federation, which will be known as the Global FinTech Hubs Federation, or GFHF for short, is set to be formally launched at the Sibos banking conference in Geneva which takes place 26th – 29th September, and one of its first tasks will be to rank different global hubs according to criteria such as ease of doing business, amount of capital, talent available, and regulatory environment.
The overarching idea, however, according to a Reuters article on the subject, will be to promote co-operation, not competition, between the hubs – the results of the rankings will be used to help hubs improve in areas where they are perceived to be lacking.
Clusters to have signed letters of intent to join the federation so far include Shanghai, Nairobi and Istanbul, whilst the City of London has also signalled its support. Countries said to be participating include Canada, China, Germany, Mexico, Switzerland and the UK.
Each hub will have the opportunity to lead the federation for a year before another takes over and the federation expects many more countries or hubs to sign up in the coming months.
The GFHF “aims to fulfil the need within the international FinTech community to create a truly cross border and open platform that brings together established and emerging FinTech hubs”, according to a press release issued last week.
The release adds that the idea was first discussed at Sibos 2015, at an Innovate session dedicated to discussion concerning the increasing number of FinTech hubs claiming to be the “best in the world”, as well as the global battle for emerging FinTech talent and funds. 8 hubs were discussed at the session; Brussels, London, Luxembourg, New York, Silicon Valley, Singapore, Switzerland and Sydney. Ideas emerging from the initial discussion were crystallised during Innovate Finance’s Global Summit, which took place earlier this year.
“Coordination and cross border dialogue between emerging FinTech startups, established FinTech companies, financial institutions and policy makers remains key for long term success of our sector”, commented Lawrence Wintermeyer, Innovate Finance’s CEO.
“The launch of the GFHF will provide a platform for global FinTech players and hubs to share knowledge and build an inclusive community network that will help accelerate the growth and influence of global FinTech and help shape a better financial services future.”
The Federation’s stated aims include to “democratically support global engagement, best practices and to standardize knowledge across the sector, as well as build bridges and support member FinTech hubs.”
The Federation intends to publish an inaugural report later this year in collaboration with Deloitte, which will examine more than 20 emerging and established hubs.
FinTech focused associations, trade bodies and “organisations that directly support the advancement of FinTech in their region” are all invited to apply to the GFHF, to one of two distinct categories; Associations and Industry Bodies, which includes not-for-profits that nurture start-ups and further FinTech growth, and Network Partners, who are able to contribute expertise, insights and access to global networks.
Associations to have signed up to date include FinTech Mexico, Frankfurt Main Finance, China FinTech, Nest VC, the Swiss Finance and Technology Association and FinTech Istanbul.
The benefits of joining are summarised as giving organisations a “platform to vocalise the unique opportunities and concerns for the development of FinTech in their regions and globally”, having an “influential point of engagement with international stakeholders and like-minded organisations”, “the opportunity to connect and network with other innovators in the community”, and “exclusive access to knowledge and the opportunity to collaboratively benchmark the most pressing issues in FinTech from a regional and global perspective”.
According to a recent report from Ernst and Young, the UK is ranked number 1 amongst the world’s global hubs, with a market size in excess of $6 billion dollars, followed by New York, California and Germany. In terms of attracting investment however, California which attracted in excess of $3 billion of investment in 2015, leads the way, it’s nearest competitor, New York, attracted less than half as much investment. California, the report suggests, also employs the most FinTech staff, around 75,000, followed by the UK, with over 60,000.