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Berlin Mitte Skyline – foto Next-Estate

Brexit and Fin Tech – Good news for Berlin………..and/or Frankfurt

It is still early and the verdict is still out on which one city will benefit most, however it is clear that Brexit means that in Germany, either Frankfurt or Berlin  [or Paris and Amsterdam outside of Germany] will benefit most from an increase in the Euro denominated bond trading moving away from London. We have written about this before on this blog.

FinTech , or financial technology, is an industry that uses new digital technology to leverage resources to compete in the marketplace of traditional financial institutions in the delivery of financial services. Fin Tech has also enabled large European Banks, [ along with insurance companies and financial institutions] to automate its services and thereby according to Bloomberg ’shedding‘ nearly 20,000 jobs.  The same Bloomberg article says „Headcount across 26 European, Swiss and Nordic banks has fallen by more than 150,000 to 2.1 million staff since the end of 2007“.

FinTech companies are mostly startups but also include established financial software and technology companies who want to enhance and upgrade their portfolio of financial services.

According to ‘FinLeap’ a Fintech company builder based in Berlin – „Shown by the creation of 139 Fintechs in Berlin in 2014, “Berlin has proven [to be] the perfect city for startups to enter the playing field.”

However the same arguments for and against Berlin and for and against Frankfurt could also be used for those looking to place a start-up Fin-Tech company in Germany. „In Frankfurt’s towering Pollux highrise, a recently launched project called TechQuartier brings together some 120 founders of finance technology startups – also known as FinTech – to share ideas with like-minded people.“

Start-up employees prefer Berlin!

But while commercial reasons play a determining role for Banks, start-up companies are another sort of entity entirely. While most are lauding both cities of Berlin and Frankfurt, if it were up to the Bank’s employees they would most likely prefer to make a move to Berlin!

But history has shown that large banking and insurance institutions rarely listen to the preferences of their employees as to where they place their offices. However this traditional relationship which exists between banks and their employees is anathema and a ’non-starter‘ to younger and well-paid IT start-up employees.

Berlin remains more affordable for housing and hiring and this makes it especially enticing for young talent and the city could easily overtake London, which is by many considered the present European Digital capital. And this because of Berlin’s low living costs, dynamic work culture and relative inexpensive commercial office space.