FinTech is in the spotlight nowadays due to its intention to “disrupt” traditional financial activity. Blockchain technology has become one of its fastest growing areas thanks to its ability to clear and settle such securities as stocks and bonds without the need for intermediaries such as banks.
Blockchain adoption for financial sector potentially offers cheaper, faster, and easier-to-use services. Multiple financial institutions all over the world launch research groups to study the technology underpinning bitcoin. However, so far the development of blockchain has been in a somewhat disjointed manner. World’s leading financial and technology centers such as London, New York, Silicon Valley, and Singapore have been competing for supremacy in the fast-emerging sector.
Today, it was reported that financial technology groups from more than 20 cities across the world aim to launch a federation of fintech hubs this year funded by sponsorship from professional services firms. The initiative becomes the first attempt to coordinate and globalize web-based innovation transforming the financial industry. The new federation will be cooperative rather than competitive. The official launch is scheduled for next month’s Sibos banking conference in Geneva.
The Global FinTech Hubs Federation has been organized by Innotribe, the innovation arm of financial communications provider SWIFT, and Innovate Finance, the trade body for Britain’s fintech sector. Both organizations believe that it is necessary to impart business knowledge, provide new markets for startups, and give global voice to fintech.
“It’s a group of equals,” Fabian Vandenreydt, global head of Innotribe and the SWIFT Institute, told Reuters. “It’s a group of people that globally support innovation for the benefit of the banks and the startups.”
The federation will take into account various criteria while ranking tech hubs – the ease of doing business, the amount of capital and talent available, and the regulatory environment – so that those centers could define where to make improvement.
According to Innovate Finance, bodies representing more than 20 fintech clusters from all over the world including Shanghai, Nairobi, Istanbul and London have signed letters of intent to join the federation.
“If you’re looking for scale in LatAm, we want to connect you directly to the Sao Paulo hub,” said Innovate Finance CEO Lawrence Wintermeyer. “We’re hoping to really be able to accelerate the connection of fintechs (startups) and institutions to the source of knowledge.”
The federation has an annual revolving chair so that each member hub can get a chance to lead it.
“Fintechs play an increasingly critical role in the finance industry and therefore, their advancement is of the utmost importance,” said Hubertus Vaeth, head of trade association Frankfurt Main Finance, which will be a member of the federation.
The development of fintech has boosted recently due to the wide spread of smartphones and consumers’ distrust in traditional banks against the backdrop of a crisis. It makes perfect sense that people start searching for alternative financial services.