Modern office Building in Frankfurt, Germany | © Nikada/Getty Images
Financial Services Sector
The financial sector enjoys great importance in Germany and is an important sector in the domestic economy. The financial services industry plays an important role in the economic development of a national economy, for example, in the financing of entrepreneurial activities and expansions.
Financial services and insurance providers contributed around EUR 111 billion to GDP in 2017 – equivalent to almost four percent of total domestic GDP. The financial services and insurance sector employs a workforce of around 1.2 million people in Germany.
Banking and Insurance Centers in Germany
Financial Industry in Germany | © der Finanzplatz Stuttgart in Baden-Württemberg, Deutschland und Europa 2017
Of global importance here are the cities of Frankfurt, as one of the most important financial centers in the world, and Munich as an important insurance and reinsurance location.
The rise of digital technology is the top trend in all industries and is also important for the financial sector. The technological transformation of the financial sector is largely being driven by FinTechs and InsurTechs as well as internet companies. Germany is performing well in these areas. As part of an initiative of the Federal Ministry for Economic Affairs and Energy, a series of regional digital hubs have been established in Germany. Start-ups, science, SMEs, industry, and local administrations join together to become centers of digital transformation. The cities of Frankfurt and Berlin are home to one FinTech hub each and the cities of Munich and Cologne each have an InsurTech hub. The underlying idea of establishing hubs is that cooperation between companies and business start-ups within a confined area will boost innovation in the digital age.
The open dialogue between regulators and FinTech/InsurTech companies ensures that new business models are included in regulatory initiatives at an early stage. The German supervisory bodies are open for discussion, also in English. Documentation can mostly be submitted in English. The supervision is regarded as being highly reliable and consistent in their statements and promises.