Global FinTech Hub Rankings
As we were looking for the latest rankings of global FinTech hubs, the Hochschule Luzern (Institute of Financial Services Zug, IFZ) helpfully published their annual IFZ FinTech Study, focusing on Swiss FinTech. Alas, this comprehensive work, clocking in at just under 200 pages, also includes their perspective on 35 global centers. While we do not believe that this type of ranking needs to be tracked on a real-time basis, with the IFZ study coming hot off the press, it is the most recent publication we can refer to.
The IFZ ranking is based on 74 different indicators from public sources, eleven at city level and 63 at country level, covering political/legal, economic, social and technological (“PEST”) dimensions that define a FinTech ecosystem in their analysis.
Singapore ranks first with a a significant lead over Zurich and Stockholm in positions two and three, respectively, as represented by the ranking score. From a regional perspective, half of the top ten FinTech hubs are located in Europe, three in North America, and two in Asia.
Since our primary interest is in the latter, the relative order of Singapore (#1) ahead of Hong Kong (#10) and Tokyo (#17) is hard to argue with, especially since the spacing between these centers is wide. Seoul at #15 is not quite consistent with other studies that we are aware of, but also here, the direction of travel might be more important than the absolute ranking: Seoul has moved up three places, while Tokyo has lost one rank, coming in for the first time below his regional neighbor. These relative moves provide some indication where digitalization has progressed and reforms are taking hold, something that is supported by other economic data (e.g., worker productivity, GDP per capita).
For comparison, Findexable, who published their Asia Pacific FinTech Rankings at the end of November 2021, see Hong Kong and Singapore as going head-to-head in Asia, but just in the top ten globally. Tokyo, while globally seen in about the same global range as in the IFZ study (#19 vs. #15), has a solid margin ahead of Seoul at #31.
Lastly, one of the most recognized and longest-running studies primarily focused on global financial center status, although a FinTech component to the rankings has been introduced a few years back, is Z/Yen’s aptly named “Global Financial Centres Index” (GFCI). Edition #30 has been published in September 2021, and the next update is scheduled for the end of March 2022.
Given the factor weighting in this study, New York and London come out on top, as clearly the leading financial markets globally, which is also reflected in a relatively wide spacing of 20+ points between the first and second, as well as the second and third rank. The centers taking places three to ten, by comparison, are separated by a mere 11 points, which leads to some volatility in ranking. However, it is obvious that all five Asian cities have taken a significant deduction in rating for this edition, no doubt due to the strict pandemic measures imposed. One would expect this to normalize again over the next year or so.
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