A new report has found that London is still leading the way as the global hub for the FinTech sector, which saw 2015 investments in the industry amounting to $19 billion.
The report from Deloitte and All Street Research [PDF] looked at 21 of the major FinTech hubs around the world. After working through quantitative research and interviews with local FinTech subject matter experts, the research found there were five hubs that had a leading Index Performance Score of 25 or less, suggesting that they are more conducive to the development of FinTech. These were London, Singapore, New York, Silicon Valley, and Hong Kong.
The findings, however, may not be too surprising given that these hubs already have the right elements in place – progressive regulatory bodies, investment capital, and government support – and strong collaboration to create leading FinTech sectors within these countries.
While this may be the case, the research found that there is no reason why the hubs that scored an Index Performance Score of 26-150 could not develop and maintain their own FinTech market.
According to the analysis, London, followed closely by Singapore, were both rated 10 on the Index Performance Score. New York took the third spot by scoring 13, Silicon Valley scored 19, and Hong Kong scored 23.
London has the world’s largest financial services sector, which is supported by a growing technology industry. The research suggests that London is one of the best connected global cities with four ingredients helping its success: capital, talent, regulatory and government support, and demographic diversity.
Even though London ranked high in three main business areas: #1 in terms of global financial centre, #3 in global innovation index, and #6 in doing business, it highlights the city’s capacity to mix its status as a global financial centre with its booming technology startup scene.
Some key issues that the city faces, though, include high costs of labor, high costs of living, and high costs of office space.
And yet, while London is still holding on to the top spot, Singapore is proving quite a contender in the FinTech race.
Over the last year, Singapore has improved its FinTech stance, pushing New York to third place, which has been significantly aided through government support with S$225 million committed to the development of FinTech projects and proofs of concept.
Other initiatives that have helped boost Singapore’s standing include the launch of its accelerator program, FinLab, the Monetary Authority of Singapore’s (MAS) collaboration with South Korea to explore the development of blockchain and FinTech, and the collaboration of MAS and the R3 Consortium to launch of a blockchain lab in Singapore.
Of the 21 hubs, the bottom five include Belgium (118), Mexico (152), South Africa (184), India (238), and Kenya (261).
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