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All about the fintech and startups development in Germany

The Federal Government’s response to a “small inquiry” on fintech in Germany shows that already in 2019 42 new companies were founded in this area. This indicates a significant decline compared to previous years.

In the year 2017 96 fintechs were founded, in 2015 there were still 160 companies. In the United Kingdom and the United States, too, this development is reflected in fewer newly created fintechs.

Fintech market already well occupied

However, the trend does not mean that the fintech business in Germany is on the decline. On the contrary, it can be observed that fewer, but larger, more professional and more finan- cial and more stable fintechs are created. In addition, some fintech companies have already established themselves in their segment, making it more difficult for start-ups to occupy niches.

On the question of the insolvencies in the Fintech sector, the Federal Government in its answer can not give any information, as there is “no comprehensive knowledge”.

Development in Germany better than the EU average

The turnover and profit of the Fintechs shows a contradictory picture between Germany and the EU. While these indicators improved in Germany – the transaction volume was 1.3 billion euros in 2018 – the volume in the EU fell from 5.84 billion euros to 5.23 billion euros. The UK is also showing a positive trend, as opposed to the EU as a whole. In contrast, the volume in the USA fell by around two billion euros.

The Federal Government announced in its reply that it wanted to strengthen Germany’s role as a fintech location. As a concrete measure, the government wants to examine all laws for their digital suitability and make them fit for eGovernment.

What does the Federal Government says?

In addition, the Federal Government welcomes the so-called FinTech Action Plan of the European Commission, which will enable innovative business models in Europe. Fintechs should be given legal certainty in the European area and responsibilities of the national supervisory authorities should be clearly regulated. Better conditions could also benefit the crypto trade.


Also published on Medium.

Published inFintech

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