Fintech firms must cash in on Frankfurt opportunities
The Brexit vote launched a conversation about the possible relocation of international banking services from London to other European cities. While Paris and Luxembourg have featured prominently, a leading narrative has positioned Dublin versus Frankfurt as location of choice.
It should not be a case of one city or the other, however. Regardless of the impact of Brexit, Frankfurt is too important a financial services hub for Irish fintech companies to overlook. It's the financial capital of the eurozone, home to the ECB, German Central Bank, and over 200 domestic and foreign banks.
As well as being the location for household software names such as SAP and Software AG, Frankfurt has seen international banks including UBS and Goldman Sachs announce the relocation of European operations to the city in the wake of Brexit.
Ireland is a globally-recognised centre for International Financial Services (IFS), with a 40-year track record in the fintech space. Fexco, which established in 1981, is now operational around the world. Newer success stories include financial services software company Fenergo and cross-border payments platform TransferMate.
The post-Brexit banking debate has shone valuable light on the strength of Ireland's financial services sector and, particularly, its cohort of innovative fintech companies. It is now time to capitalise on that.
The biggest opportunity facing fintech companies is not Brexit but PSD2. The EU's new Payment Services Directive is forcing traditional banks to digitise operations and open up to third parties, providing access to everything from customer data to payment infrastructure, to enable them to build innovative new services.
While initially fintech was viewed as a disruptor by banks, that view has changed dramatically. Today, legacy banks are in a race to source the best fintech innovators to help them improve services.
Niall Hogan, CEO of Irish payments fintech Touchtech, said: "While many older Germans are still quite conservative and use cash, the younger generation are like their Scandinavian and British counterparts and expect slick digital experiences. Our Germany-headquartered client N26 has over 850,000 customers across Europe and is doing very well in Ireland. Our experience working with German financial institutions is that they take time to come to a decision, but once that decision is made follow-through is guaranteed."
Enterprise Ireland tells Ireland's strong fintech story in Germany, building relationships with innovation managers at some of the world's best-known banks, and introducing them to innovative Irish companies that can partner with them to offer solutions in the areas of payments, security, compliance and data analytics.
The Irish Advantage website helps Enterprise Ireland to tell that story, encouraging international financial services buyers to source fintech partners established here.
With both banks and fintechs recognising that neither the 'fin' nor the 'tech' can succeed alone, Irish fintech companies serious about capturing global opportunities must consider Frankfurt.
However great your technology, building a strong value proposition and articulating the business problem you solve is key to securing time with buyers in the region. While using social business networks can open doors, Irish fintech professionals should be clear about the nature and purpose of their request or enquiry. While the fintech sector is international in nature, exceptional preparation for meetings is always a must in Germany.
Enterprise Ireland is organising an event in Frankfurt on May 8 on the theme of innovation in retail banking, which aims to further strengthen ties between members of the German and Irish Financial Services community. Enterprise Ireland clients that would like to attend should contact the author at jane.greene@Enterprise-Ireland.com.
Jane Greene is a senior market adviser for software and services at Enterprise Ireland, based in Dusseldorf
Sunday Indo Business