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Only One in Five Fintech Companies Would Choose Germany as a Location Again

A study by Bitkom reveals dissatisfaction among Germany’s fintech companies, with only 19% choosing Germany again as a business location. Just 18% find sufficient venture capital, and 19% view the financing ecosystem positively. Challenges include bureaucracy, financing, and regulatory hurdles. 82% criticize Germany’s focus on risk avoidance over innovation, advocating for harmonized EU licensing processes.




Germany’s fintech companies are very dissatisfied with the conditions under which they have to operate in this country. This is the result of a study entitled “Germany as a business location: Fintech companies take stock”, for which the digital association “Bitkom” surveyed 54 fintechs.

After that, only 19 percent would choose Germany as a location to start a business again. Only 18 percent believe that there is enough venture capital for fintechs in Germany, and no more than 19 percent rate the financing ecosystem for fintech companies in this country positively.

Criticism of the Federal Government of Germany

The work of the federal government did not come off particularly well in the survey. The efforts of the SPD, FDP and Greens, who had set themselves the goal of making Germany the leading location for fintechs in Europe in their coalition agreement, were given a grade of “sufficient” by the fintechs.

The respondents described bureaucracy and administrative burdens as the biggest challenge to growth (46 percent). A fintech that received a license from BaFin for banking and financial services had to wait an average of two years for this.

Risk avoidance instead of innovation

Other challenges mentioned were financing (33 percent), difficult cooperation with established players (22 percent), obtaining a regulatory license (19 percent), ongoing supervisory obligations (17 percent) and a weak fintech ecosystem (17 percent). Only seven percent see competition in Germany as a problem.

Are banks losing interest in fintech companies?

65 percent describe financial market regulation in Germany as restrictive. 82 percent complain that in Germany the focus of implementing regulatory requirements is on risk avoidance rather than innovation, with 67 percent feeling disadvantaged in global competition and 53 percent in European competition.

Accordingly, 72 percent are calling for a clear and harmonized licensing process in all EU member states. This would make it easier for fintechs to access the market because they would have to meet the same requirements and standards in every EU country.

According to insiders, the federal government wants to get concrete commitments from the financial sector for more involvement in startups and venture capital. A corresponding initiative under the leadership of the FDP-led Finance Ministry is expected to draw up an interim report.


(Featured image by Makeshkumar Painam via Unsplash)

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First published in FINANZBUSINESS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Valerie Harrison is a mom of two who likes reporting about the world of finance. She learned about the value of investing at a young age upon taking over her family's textile business when she was just a teenager. Valerie's passion for writing can be traced back to working with an editorial team at her corporate job, where she spent significant time working on market analysis and stock market predictions. Her portfolio includes real estate funds, government bonds, and equities in emerging markets such as cannabis, artificial intelligence, and cryptocurrencies.