US and Chinese cities lead global fintech hub rankings
By Busch Pu
In the recently released Global Fintech Hub Report 2021, Beijing was named the best fintech hub, followed by San Francisco, New York, Shanghai, Shenzhen, and London.
- US and China dominate the Global Fintech Hub ranking, with eight and nine cities respectively placed in the top 50
- Beijing solidified its leadership among fintech hubs, while Singapore emerges strongly and enters the tier 1 fintech hubs for the first time this year
- As developing countries continue to lead the consumer experience ranking, developed countries have maintained their significant edge in the fintech ecosystem
Beijing has topped the Global Fintech Hub ranking for three consecutive years. Singapore has entered the first tier (top nine) for the first time by overtaking Chicago.
The report was released at the China International Fair for Trade in Services, which was opened by President Xi Jinping in Beijing in early September. The report was jointly published by the Beijing Frontier Institute of Regulation and Supervision Technology, Zhejiang University and Zhejiang Association of Internet Finance.
The report is based on the Fintech Development Index developed by Sinai Lab from Academy of Internet Finance, Zhejiang University. It selected the top 50 cities in the world in fintech development out of about 80 cities through a comprehensive index based on three elements, namely fintech industry, consumer experience, and ecosystem, to present a global fintech map and its future trend.
US and China dominate global fintech hubs ranking
In the overall ranking, the US and China dominated the global fintech hubs ranking by having eight and nine cities respectively in the top 50. The positions of the leading cities remain largely unchanged. The top three global fintech hubs in the past three years were Beijing, San Francisco, and New York. Shanghai has ranked fourth since 2019. The newest entrant to the tier 1 fintech hubs, defined as the top nine of the ranking, is Singapore, which surpassed Chicago this year.
Outside the tier 1 cities, the competition has intensified. Seventy-eight percent of the top 50 cities have changed rankings. Seoul and Jakarta made the biggest progress. The two cities went up four places due largely to strong policies, the public listing of fintech companies, and the increase in the proportion of fintech users.
In the Global Fintech Hubs by Industry ranking, China and the US each have 5 cities in the top 20. Toronto and Bombay are in the top 20 for the first time. India became the second developing country after China to enter the top 20.
The report concludes that Beijing has topped both the overall and fintech industry rankings for incorporating the synergy of “effective government” and “efficient market”. The city hosts the most listed fintech enterprises globally that are supported by active industry associations or alliances. Together with various forward-looking regulatory policies and pilot programmes, Beijing is solidifying its leadership role in the fintech industry.
Developing countries lead the consumer experience ranking, while developed countries have significant edge in the fintech ecosystem
Developing countries continue to lead the Global Fintech Hubs by Consumer Experience ranking. The top 10 cities are from developing countries in Asia, nine of which are in China. Hangzhou, the headquarter of Alibaba, has ranked first for three consecutive years. Meanwhile, San Francisco, London, Sydney, and Singapore in developed countries are in the top 20 and have improved their rankings. Australia made the most significant progress, with Sydney and Melbourne both moving up three places.
Developed countries have significant edge in the fintech ecosystem. Seventy percent of cities in the top 20 Global Fintech Hubs by Ecosystem ranking are from developed countries. In this year’s ranking, Chinese cities have improved the most with all five Chinese cities in the top 20 rising in the ranking. Notably, Beijing has overtaken New York and Shenzhen, and Shanghai has overtaken Tokyo. Singapore ranks eighth for having a strong financial and technology industry base, excellent research and innovation capabilities, and good policy and regulatory environment.
Challenges and opportunities ahead for the global fintech hubs
Though the rankings are dominated by US and China, the report still displays a vibrant landscape of global fintech hubs. New entrants to the rankings and the vibrant competition signal that the US and China’s dominance of the rankings is not permanent.
A new wave of fintech development globally has arrived. More developing countries and hubs have made it to the list, and promising cities such as Singapore, Seoul, and Jakarta are moving up quickly.
On the one hand, recent crackdown on internet platforms in China, of which Ant Financial and Tencent are leading fintech champions, might paint a gloomy future for the country’s fintech hubs in the coming years. On the other hand, the Chinese tech crackdown might offer some of the fintech enterprises, especially those in Southeast Asia that have lived under the shadows of the region’s fintech giants, fresh opportunities to prosper. This will in turn foster more diverse and vigorous fintech hubs in the region.
Institution: Global Fintech Hub, Beijing Frontier Institute Of Regulation And Supervision Technology, Zhejiang University