Global Fintech Rankings Will Singapore Pass UK As Global FinTech Number One Courtesy of Brexit?
The FinTech sector continues to develops and growing globally. It is creating a powerful competitive and innovative international community and gathering support from governments and cities that see this as a way to leverage their future assets and economy and fight for the best companies and talent.
On this subject the organisation Global FinTech Hubs Federation is bringing together a network of FinTech hubs to provide a neutral, cross-border platform to encourage greater collaboration, research, engagement and knowledge sharing in this growing global innovative and based on international talent community.
One of the conclusions you can take from this studies and of all things changing is that London the leading Fintech city is going through a major disruption with all the political challenges of Brexit and all the serious negative image and damage it is doing to its reputation of a global open and focus on best talent and immigration brains.
The Global FinTech Hubs Federation (GFHF), an initiative supported by Innotribe the powerful innovation unit from SWIFT and Innovate Finance the UK leading organisation for finance and innovation, is an independent and inclusive global network of emerging and established FinTech hubs that helps to foster innovation across the world’s financial services industry.
According to the report Connecting Global FinTech: Hub Review 2016 recently issued by Deloitte, the global top FinTech hubs in 2016 are:
- New York,
- Silicon Valley,
- Hong Kong.
- South Korea.
The report highlights that Hong Kong ranks fifth and Singapore has moved up to the second place, overtaking New York. South Korea comes sixth right after Hong Kong, and Shanghai is in the eleventh place. The report draws on three indicators for the ranking:
- Global Financial Centers Index (GFCI)- considers the business environment, financial sector development, infrastructure, human capital, and reputational factors.
- Doing Business (DB)- presents indicators on business regulation and the protection of property rights.
- Global Innovation Index (GII) – indicates the innovation of different cities.
Deloitte believes that Hong Kong, which is a long-established financial center, ranks highly on the GFCI yet lower than that of London, Singapore, and New York. Although higher than London and New York in terms of DB, Hong Kong has the lowest GII among the five cities. “In fact many small and medium-sized enterprises in Hong Kong may not be well served by banks and large financial institutions. Therefore, they may expect services from emerging FinTech companies, including e-commerce, payment, microcredit, crowdfunding, and other platforms,” said Freddie Chui, Deloitte China Southern Region FSI Leader.
He further explained that some small and medium-sized enterprises in developing countries, may find it very challenging to acquire loan financing. FinTech organizaitons such as P2P lending platforms can provide them with another cost-effective financing channel which brings them the required funds for sustainable business development. However, few FinTech organizations in Hong Kong are providing such services. Instead, they often follow their counterparts in Europe and the U.S. developing wealth management products based on Big Data Analysis and Robo-Advisory. Thus, founders of FinTech organizations often regard Hong Kong as a market with few opportunities, high costs, and conservative risk preference.
Deloitte believes that Singapore moving up to the second place surpassing New York is mainly attributed to the strong support from the Government, as evidenced by the S$225 million committed to the development of FinTech projects. Other initiatives include the Regulatory Sandbox, Strategic Electronic Payments, International Technology Advisory Panel and Talent Development. All these initiatives imply that Singapore may be a serious contender for the global No.1 spot in FinTech.
Dr. Paul Sin, Deloitte FinTech Consulting Partner holds that many disruptive innovative technologies such as blockchain will inevitably threaten the existence of some traditional financial organizations. Thus, support from the Government is necessary to sustain a leading position in the GFCI. Fully aware of this fact, the Singapore Government has taken some proactive measures such as the establishment of the blockchain platform for trade financing, skipping the time-consuming processes including private financing, educating the market, and individual sales.
“While market competition can effectively drive the development of enterprises in the industry, support from the Government for innovation is an effective accelerator for the development of FinTech. This explains why Singapore is leading Hong Kong in all the three indicators,” said Dr. Sin.
In addition to government support, business innovation is also critical for the development of FinTech. Deloitte believes that Hong Kong, with low innovation index, needs to catch up to maintain its position as one of the leading global financial centers, otherwise it will be less relevant to the global market soon and fall out of the global top five. Dr. Sin believes that high ranking requires the common endeavour of the Government and entrepreneurs. While the Government can provide regulatory and financial support, business innovation is a key factor for the development of FinTech.
Entrepreneurs must explore other potential businesses while continuing the development of familiar businesses in accordance with the requirements of the market and the rapid development trends of new technologies. Meanwhile, entrepreneurs should observe the structural changes of global and local economy and make frequent contact with potential clients, especially small and medium-sized enterprises which is a group that still remains to be explored. Through these initiatives, enterprises can provide distinctive products that meet the fast changing requirements of the market.
Source: http://thegfhf.org and https://www2.deloitte.com/cn/en/pages/about-deloitte/articles/pr-hongkong-rank-5-global-top-five-fintech-hubs.html
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist, he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.