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FinTech Hubs: Munich’s Winning Formula

FinTech Hubs: Munich’s Winning Formula

At the risk of stating the obvious, half of the fintech equation is technology. For financial innovation to progress, technology needs to be a strong presence.

And with a solid technological foundation, Munich has emerged as a global fintech hub.

A couple of years ago, the European Commission’s Joint Research Centre released a report, naming Munich as the top tech centre in Europe, above London and Paris.

The report, “Mapping the European ICT Poles of Excellence: The Atlas of ICT Activity in Europe”, looked at ICT (Information Communications Technology) R&D, innovation and economic activity, including which locations are attracting new investment in the ICT sector.

It found that Munich dominated in activities such as agglomeration, internationalisation and networking.

Apart from a booming tech sector, other qualities that make Munich a great fintech hub include a strong economic environment, highly qualified workforce, and a centralised location.

However, you can’t talk about Munich fintech without singling out its insurtech industry.

Munich Insurtech

Insurtech is a subcategory of fintech and refers specifically to the innovation and disruption within the insurance market. Munich has a particularly strong presence in this field.

As part of its Digital Hub Initiative, the government chose Munich as the prime location for its InsurTech hub. The reason the government chose Munich is that it provides a perfect combination of top tech companies, academic pedigree and a large number of insurers.

InsurTech Hub Munich is a world-class platform that nurtures innovative solutions aimed specifically at the insurance market.

Munich is also the chosen location for WERK1, an incubator and coworking space catered towards insurtech start-ups, helping them to grow and succeed with their ideas. The programme has some big-name backers, including Allianz and MunichRe. Participating startups benefit from training and networking through the coworking space.

Some of the startups that took part in the inaugural 2016 round include Snapsure, an insurance platform that leverages image recognition and AI to generate insurance proposals, and Minnosphere, which also uses AI in its “Next Generation Underwriting”, including smart contracts that give customers greater insights into the risks they face.

Munich Re is also looking beyond the city’s borders, investing in a number of global insurtech companies. Earlier this year it led a $45 million investment into Trov, an on demand insurance platform that aims to make insurance simple and flexible, without confusing fine print and rigid policies.

It also invested £7.5 million in Bought By Many, an insight-driven insurer that uses search data and social media for individually tailored insurance policies.

Economic Environment

Munich has a strong economy with 11% of German’s start-ups located here. That’s not bad if you compare it to the Bavarian region as a whole, where the number of startups equates to 16% of the German total.

We mentioned Munich’s prominent insurance industry but another factor that adds to the city’s economic environment is its strong banking sector.

Some of Europe’s most innovative banks are found in Germany. Fidor Bank, located in Munich, is a digital bank that actively encourages customers to take part in the banks’ decision making.

Wirecard Bank is a specialist in online payments and provides a wide range of products to B2B and B2C clients.

Both these banks have been around long before fintech became a buzzword. Their innovative solutions and digital approach cemented their reputation as thought leaders within the industry.

One of the biggest success stories to come out of Munich though, is Finanzchef24, a comparison site and online insurance broker. The company has raised €16 million in funding since founded in 2012.

Highly Qualified Workforce

With a population of around 1.5 million, Munich is Germany’s second largest employment hub. It is especially attractive to well-educated young adults, looking to work and live in this exciting and diverse city. It’s open-minded and tolerates with over 27% foreign nationals from 180 different countries.

Diversity and top talent have been shown to go hand-in-hand with world class fintech hubs.

Munich holds a particularly strong attraction for software developers and programming language experts. Germany as a whole is a world leader in software development and Munich is an exciting city for individuals involved in this industry.

With a wide range of fintech corporates and startups to choose from, employees can benefit from above average wages (higher than in Berlin) due to the willingness of employers to pay for the quality talent that they need.

Programming languages like PHP, Java and Python are also in high-demand in Munich.

Another big attraction is the city’s overall location within Europe. It’s easy for workers to enjoy Germany’s neighbouring countries, with easy access into Austria, Switzerland and Italy, an unforgettable holiday is just a short trip away.

Incubators and accelerators

Munich hosts various incubators and accelerators that support fintech start-ups to grow into their potential.

The FinTech/InsurTech Meetup is a networking event that puts startups in contact with prominent political figures and established industry leaders.

TechFounders focusses on technology driven companies and offers start-ups an initial investment of €25,000. They also provide access to world class development tools

The FinTech Munich Meetup gives information on the latest technical developments and serves as a platform for cross-sector networking. It brings together like-minded individuals from new and established organisations to find tech solutions for pain-points within the financial services industry.

Further Munich Success Stories

Germany’s third largest city has produced some of the world’s leading fintech solutions.

PAYMILL is an easy and secure online payment provider. Doodle and Freeletics are counted among their clients and the platform is available in 34 European countries. It reported a growth rate of 250% during 2015 and is one of the fastest growing fintech startups.

Scalable Capital is a digital wealth managing firm that launched in Munich in 2016 and expanded into London the same year. The startup was attracting close to €4 million in deposits every week within just a few months of launching and has an estimated €100 million of assets under management.

Another innovative startup from Munich is Lendstar, a social finance app that enables users to transfer funds, collect money and divide bills directly from their bank account.


With around 22,000 high-tech companies, Munich is the frontrunner in Germany’s tech industry. The city is situated in a great location that attracts a diverse and skilled workforce. In addition, the Bavarian capital has a strong insurance sector that forms the cornerstone of its economic stronghold.

Combine this with the various programmes that support the growth and stabilisation of the city’s startup scene, and Munich has all the elements to complete its winning fintech-hub-formula.