Helaba Annual Report 2016
Annual Report 2016
fintechs in Frankfurt

Hotspot

The Frankfurt financial centre is in a state of flux. Few places exemplify the new climate better than the recently inaugurated TechQuartier, an initiative launched with a clear vision to support fintechs working on the solutions for the banking industry of the future.

The glazed facade of the Pollux tower glows in the winter sunlight. Here, close to the city's exhibition grounds, Frankfurt is all about business and the fast pace of passers-by fits in well with the atmosphere of excitement and creativity that has been bubbling away inside the building since the TechQuartier arrived.

Everything is in motion, not just in the European financial market, but also in the universities and business incubators. Fintechs (the word is a portmanteau of finance and technology – digitalisation incarnate, in other words) are now often the source of solutions for the new challenges facing the sector. From smartphone-based payment systems to social trading, the products of the fintechs' imagination are very much in demand, so much so in fact that they are conquering a customer segment previously occupied by the traditional financial institutions. Inspired not least by the discussions surrounding Brexit, the question now on everyone's lips in this field is: where will fintech innovation take place in future?

"Brexit may well lead to Frankfurt becoming more attractive for fintechs wishing to work primarily within the euro zone," suggests Dr. Gerhard Kebbel, who heads up Helaba's Digitalisation strategy project. The combination of essential structures and the right timing is instrumental to the success of the centre. Andreas Hackethal, Professor of Finance at the House of Finance, Goethe University Frankfurt, and one of Dr. Kebbel's fellow mentors at the TechQuartier, confirms the advantageous time window: "There are clear trends in favour of Frankfurt. The ecosystem provided by the TechQuartier is ideal: it has just the blend of sponsors like Helaba that operate in the region and investors from further afield that it needs in order to attract exciting fintechs." Managing Director Dr. Sebastian Schäfer also speaks from experience with his conclusion that, "The TechQuartier was overdue." Dr. Schäfer, a lecturer, partner in young companies and juror in start-up and innovation competitions, has been promoting the Frankfurt region as a hub for innovative new businesses for many years.

Fintechs and their new solutions are conquering a customer segment previously occupied by the traditional financial institutions. The obvious question in these circumstances is: where will this innovation take place in future and how can the benefits be made to work for all?
"The TechQuartier is a meeting place, a space where people can network and an important incubator for developing and launching new ideas." Dr. Sebastian Schäfer,
TechQuartier Managing Director

One successful start-up to have based itself at the TechQuartier is vaamo, a fintech behind a robo-advisor designed to simplify digital asset management. Co-founder and CEO Dr. Thomas Bloch values the direct dialogue made possible by the TechQuartier: "Here we can work in the way that suits us and count on co-operation rather than confrontation with the established financial institutions. This is very much the spirit of the TechQuartier, as the active support we receive from sponsors like Helaba clearly illustrates."

Bloch is by no means alone in his appreciation for the initiative, as the presence of some 15 start-ups and two accelerator programmes drawing in additional fintechs ably demonstrates. Common to all of the solutions involved, which include an exchange for receivables, an asset management app and a payment system, is their reliance on digital technology. A team of over a dozen top-level mentors drawn from academia, consulting houses and the financial sector is regularly on site and their presence is much appreciated. The result? An informal congress of established financial expertise and passionate digital innovation.

Co-operation not confrontation

Dr. Sebastian Schäfer

From scheduled counselling sessions to a brief exchange at the coffee machine, new ways of working paired with more dynamic structures open the door to novel results. The TechQuartier has been fitted out with this recognition very much in mind. Lively green carpets serve as a bright counterpoint to the modern industrial character of the exposed ceilings. There is much more atmosphere here than in a conventional open-plan office. The spacious floor with a wonderful view over Frankfurt accommodates 120 workstations and work to prepare a second floor is currently ongoing. Demand among start-ups for the inexpensive office space is running high.

Quirky meeting spaces like this underline the difference: effective dialogue can flourish far from the formal conference room setting.

A glance into the open-plan office for partners and sponsors reveals that they are still in the process of moving in and finding their feet in this new environment. What is most striking, however, is the ever-present willingness to engage with the new. "Representatives of Helaba work at the TechQuartier one day a week. They are physically present, they go out and say hello, discuss issues of interest and are open and available to meet people and listen to their inputs and ideas," says Gerhard Kebbel, keen too to emphasise the importance to the sponsors of dialogue with the start-ups.

"It is easy to imagine the informal atmosphere proving much more productive than the umpteenth meeting in the same old conference room." Dr. Andreas Hackethal, Professor of Finance at Goethe University Frankfurt and TechQuartier mentor
Dr. Andreas Hackethal
Dr. Thomas Bloch

Asked to summarise the role of the TechQuartier, Managing Director Sebastian Schäfer responds: "We are a meeting place, a space where people can network and an important incubator for developing and launching new ideas." Prof. Hackethal also flags up the community aspect: "Co-operation between established financial institutions and highly innovative fintechs can spawn important solutions, not least in the context of regulation. And it is easy to imagine the informal atmosphere proving much more fertile than the umpteenth minuted meeting in the same old conference room."

"Here we can work in the way that suits us and count on co-operation rather than confrontation with the established financial institutions." Dr. Thomas Bloch, vaamo co-founder and CEO

The place to be

The TechQuartier as it exists today is clearly generating plenty of enthusiasm, but where does it go from here? What does it need to do to keep the momentum growing in future? Andreas Hackethal has a number of items on his wish list. He would like to see even more regional business angels active in the TechQuartier, for example, and would very much welcome more of an international flavour. While seconding the point about making the initiative more international, Sebastian Schäfer and Thomas Bloch also stress the importance of vigorous dialogue, explaining that they would like to see not just start-up-hubs in other German cities but also global players using the TechQuartier as a base from which to build up their German or European business.

Leaving the building and wandering out into the Frankfurt afternoon, the all-around feel-good factor is hard to miss: everything seems to be in place for the TechQuartier to become Europe's fintech hotspot.

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