Deloitte has published its annual FinTech hub review, which analyses data from 44 markets across the world, revealing a number of regional FinTech themes.

The ‘Tale of 44 Cities’ research found that emerging FinTech centres in Europe tend to agree that there is good access to talent in their hubs, while the majority of these 12 new European hubs also rate regulation negatively and cite regulatory barriers as a common challenge.

Furthermore, an analysis of regulatory sandboxes and regulator collaboration showed that in Europe, only the UK, Netherlands, Russia, Switzerland and Norway have committed to a regulatory sandbox and only the UK, French and Swiss regulators have signed FinTech co-operation agreements with other regulators across the globe.

Regulation was seen as more of a positive in Asia-Pacific, where there has been positive developments from regulators across the region and the pace of change was described as “extremely encouraging”. Of the 16 global regulators who have either set up or committed to setting up sandboxes, seven are in Asia. The Monetary Authority of Singapore has signed more FinTech co-operation agreements than any other regulatory body in the world.

In the Gulf region, Deloitte’s research only included two hubs – Abu Dhabi and Manama – both of which claim excellent government and regulator support for FinTech, shown through a range of initiatives that the governments and regulatory bodies are driving together. These include the RegLab in Abu Dhabi, the FinTech Hive and 2020 blockchain ambition in Dubai, and the FinTech work driven by the EDB in Bahrain.

In Africa, FinTech developments continue to be concentrated around mobile and social payments. Highly successful FinTechs are rare as low levels of government and regulatory support and a lack of quality infrastructure continue to be barriers to growth, Deloitte noted.

Meanwhile, Brazil is leading the pack in the Central and South America region, with investment and the number of FinTechs much higher than anywhere else. Citing Mexico’s new financial inclusion strategy, the report found that there were positive signals that government and regulator support for FinTech in the region is increasing.

With regards to North America, the report found that there are a number of emerging hubs (such as
Chicago and Charlotte), which are growing to challenge the undisputable top hubs of Silicon Valley, New York and Toronto. The fragmented nature of regulation in North America was cited as a hurdle for FinTechs during the research.

For London specifically, the report stated: “Over the next 12 months the UK will forge greater global FinTech connections to support the developed ecosystem in the UK. FinTech is global and UK FinTech firms have global ambitions which require global capital, talent and partnerships to ensure long-term success.”

The review added: “Worldpay raised an IPO in 2015, becoming the largest UK FinTech IPO to date and became the largest tech IPO of 2015. This demonstrated that the UK is not only a great place to start a FinTech business, but that the UK has all the resources to help companies to scale, be successful and achieve a world-class exit.”

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