While traditional financial centres like Toronto rank among the top locations for fintech, upstart cities are climbing the charts.
The inaugural Global Fintech Index City Rankings, from London-based fintech research firm Findexable Ltd., found that several leading financial centres — including Frankfurt, Zurich and Shanghai — have been usurped by emerging centres, such as Sao Paulo, Bangalore, Mumbai and New Delhi.
The San Francisco Bay Area led the global rankings, followed by financial sector strongholds London, New York and Singapore. Sao Paulo rounded out the top five. Toronto was the only Canadian city in the top 20 at 12th.
“The rankings are evidence of a worldwide de-coupling between the financial strength and the commercial domination of traditional financial centres. Financial wealth is no guarantee of a city’s status as a fintech hub. You might call this the rise of non-traditional finance,” said Simon Hardie, CEO and founder of Findexable.
The report also found that a healthy environment for startups doesn’t necessarily translate into fintech strength. For instance, Vancouver ranked 36th in the fintech index, well below its 25th-place status as a startup centre.
Conversely, the index placed Calgary in 84th position as a global fintech hub, which is up 27 spots from its startup ranking.
As a result, Calgary was among the top 20 up-and-coming fintech hubs in the report.
“These 20 hubs are in the top 120 fintech cities worldwide and are the fastest climbers up the global start-up ecosystem ranking table,” the report said. “They present a global mix of cities with a good or improving quality of life, deep talent pools or proximity to a thriving start-up scene inspiring local innovation.”
The overall index is based on factors including the size of the local fintech ecosystem and infrastructure; the performance of the fintech sector in terms of investment, value generation and more; and the competitive environment (regulation, tax policy, etc.).
“There are some common features of winning fintech hubs around the world. Fintech-friendly regulations incentivise entrepreneurship and encourage investment. A strong talent pool is also key to fintech success, together with an ecosystem where people can connect easily,” Hardie noted.
By country, the U.S. led the way, followed by the U.K. and Singapore.
Lithuania was fourth on the global ranking “thanks to its active encouragement of fintech companies and regulatory approach,” the report said.
Switzerland rounded out the top five.
Canada was ninth, with five cities among the top 100 — alongside Toronto, Vancouver and Calgary, Montreal ranked 48th and Ottawa 90th.
The report said Canada’s fintech strengths include crypto and blockchain, lending and insurance.