The Emerging Fintech Hubs
The fintech industry has witnessed extravagant numbers in terms of growth, valuation, and participants. There have been rapid developments bringing both disruptions and definitions into the market. All this dynamism has powered an upsurge in the number of opportunities, and in turn, the number of participants. Amidst this transformation, a few cities got propelled towards becoming fintech hubs owing to some prerequisites and strategic benefits.
The dominance of Silicon Valley in technological developments invoked the origination of the major fintech stalwarts like PayPal, Intuit, Robinhood, and many more. Similarly, London has housed several startups and companies that have immensely contributed to changing the face of fintech over the years. The country-city of Singapore has followed these giant hubs closely, owing to the readily available talent, the timely influx of investments, combined with the right mix of opportunities, and a supportive regulatory structure.
But with more participants entering the arena, there has been an evident shift in the dominance of these hubs. More countries are steadily realizing the opportunities and benefits of being on the frontline of fintech. The countries and cities that are now looked at as the emerging hubs of fintech are:
Brazil – Sao Paulo
Talking about emerging hubs, the city of Sao Paulo in Brazil takes the cake. It has housed more than 270 startups, all of which are relentlessly working towards building innovative solutions that challenge traditional methods of banking and finance. Brazil has the highest number of startups in all of Latin America, because of which it has acquired the status of becoming the financial hub.
The Brazillian market has revved its supremacy because almost 40% of the country’s population has abdicated their trust in traditional banking methods. The roots of this mistrust in banks originated due to the prolonged financial crisis that took over the country.
NuBank has emerged as the shining star of the hub, followed by many others like C6 Bank, Unico, Creditas, etc.
Israel – Tel Aviv
The city has been known for its supremacy in science, engineering, and technology, due to which it is considered one of the emerging hubs of fintech. The country is equipped with knowledge and talent, and after receiving exemplary aid from its government, Israel has deservingly become a dominating market in InsurTech and Investment platforms. The culture of entrepreneurship, combined with easy loans from the Israeli government, help create an active ecosystem that accommodates and supports innovations, business, and growth.
Lithuania – Vilnius
Lithuania has already been ranked 19 out of 190 by the World Bank in the Ease of Doing Business Index. Post Brexit, Lithuania has witnessed an influx of British companies wanting to shift their operations to the country. This upsurge has occurred because of the favorable fintech environment that is supported by the country’s regulatory practices. The education level in the country is among the highest in Europe, which brings tremendous opportunities for the youth to advance in emerging fields like fintech.
The city of Vilnius alone has over 60 fintech startups, all of which are performing well. Out of these, the most prominent names that have made headlines are Kevin, Bankera, and Nordigen.
The Netherlands – Amsterdam
Amsterdam is home to more than 120 fintech startups, some of which have been applauded globally for their contribution to risk management, like Adyen. The environment of entrepreneurship in the country focuses on providing as much support as possible by giving tax benefits and allowances to startups.
India – Bengaluru, and Mumbai
Bengaluru, previously known as Bangalore, has gained immense traction in the past few years, attracting global attention. It is a tech-savvy city which has excelled in producing innovative fintech startups. It is one of the fastest-growing ecosystems that has been claimed to be the Silicon Valley of India. Zerodha is one of the biggest participants in this market.
In the past five years, the growth of fintech in India has been dramatic. By 2025, the valuation of the fintech market in India is expected to cross $150 billion. The country is housing several unicorns, like Groww, Razorpay, Paytm, and CRED, which have changed the way Indians are banking nowadays.
Norway
Norway is aiming to become the first country to go completely cashless in the near future. The fintech environment in Norway is seeing some of the brightest days, where there is immense support from the government coupled with a high level of education, making it one of the emerging fintech hubs.
South Africa- Johannesburg
Johannesburg is steadily advancing towards becoming an emerging fintech hub. In the past few years, investors have poured in from all over the world in South Africa, which has increased the rate of investment in the country by almost 50%. There are about 46 startups currently operating in Johannesburg, and the number is steadily increasing. Not only this, a large section of the population currently remains unbanked or underbanked, giving rise to tremendous opportunities for the fintech industry to step in.
Conclusion
Apart from these, there are quite a few other countries that are swiftly climbing the ladder of becoming fintech leaders and hubs like Malaysia, Estonia, the UAE, Argentina, Malta, Mexico, Luxembourg, and Frankfurt. All these countries have commonly shown tremendous opportunities, some due to their talent, some for their respective government aid, and some owing to a large section being unbanked or underbanked. Although the fintech giants are still predominant in the existing hubs, these countries are allocating significant resources to develop their fintech markets.
