The German financial sector: Backbone of the Economy, at home and abroad
We will do everything possible in order to create attractive conditions for Germany as a financial centre,
Chancellor Angela Merkel
Top 5According to the World Economic Forum Germany is rated in the top 5 worldwide for quality of infrastructure.
Stable labor costsAccording to a 2018 Eurostat report, German labor costs are some of the most stable in Europe.
Labor productivityAs of 2017, Germany ranked in the top 5 in Europe for labor productivity.
FDIDue to attractive conditions, Germany has over EUR 700 billion of FDI.
SME economyA high demand for financial services ensures a healthy market, due in part to the German SME economy (known as the Mittelstand).
Partner and facilitatorThe financial industry acts as a partner to of the real economy.
AAA ratingThe German financial sector is an internationally recognised, attractive market with a very good financial infrastructure and an AAA rating.
Proven structureBaFin and the Deutsche Bundesbank provide proven structure, reliability and security.
Financial and insurance activities contributed EUR 122.6 billion to the German GDP. They are part of the service sector which accounts for about 70 percent of the German GDP.
There were 1,823 credit institutions active in Germany in 2017. The banking sector has a workforce of nearly 600,000. The total assets of the German banking industry amounted to EUR 7,927 billion in 2017.
Germany’s banking sector is varied, offering much more than just private banks. Along with public banks – Germany’s decentralised network of independent regional commercial and savings banks – German cooperative banks contribute to a diversified banking landscape. Germany’s banks themselves are also diversified, supported by the country’s renowned universal banking system.
Global relevanceFrankfurt is ranked 10th in the world.
SignificantFrankfurt is listed as the 3rd most significant financial centre in Europe for 2019.
DevelopmentFrankfurt is no. 3 in the GFCI list of global financial centres likely to become more significant.
European leadersFrankfurt is listed right behind only London and Zurich.
Frankfurt is not only a prominent financial centre in Europe and beyond – it’s also a source of financial stability. A point of contact for all 28 EU member states, Frankfurt’s network of 199 banks, 7,900 financial service companies, 34 higher education institutions, and numerous supervisory bodies places the city in a unique leadership role. Its 100,000-strong workforce in the financial industry fuels growth, and is highly international, with people from almost 200 countries.
Frankfurt is the centre for euro clearing for banks from non-euro countries. Eurex is the leading derivatives market in Europe and Eurex Clearing serves more than 175 clearing members in 17 countries and administers a collateral pool accounting for around EUR 50 billion. Frankfurt is also the location in the EU for renminbi clearing.
The German financial sector benefits from investment opportunities in the multifaceted and robust insurance and reinsurance sectors.
Alongside banking, Germany’s insurance industry leads both in Europe and globally. The industry is healthy, with EUR 88 million in life insurance contracts, 71 million in pensions, 17 million in risk coverage, and 25 million in supplementary contracts, along with a robust private insurance market, with 9 million people covered by private health insurance.
Germany’s insurance market is the second-largest insurance market, alongside France, in EuropeShare of global premium income in primary insurance in percent:
Germany dominates the reinsurance sector in Europe and is the second largest reinsurance market in the worldShare of global premium income in reinsurance policies in percent:
The German insurance industry benefits from its diversification:
|200||Accident and indemnity||reinsurance providers|
The future is FinTech: An innovative sector Linking the German financial sector to various industries
GrowthFinTech cooperations have almost doubled since 2014.
PartnersThe most popular cooperation partners are banks and insurance companies.
FinTech centresThe key FinTech cities are Frankfurt, Munich, Berlin and Cologne.
CategoriesCooperation types comprise operational (66 percent), financial (27 percent), and other (7 percent).
FinTech on the rise: Second in German venture capital investmentFinancing amounts per sector in Germany in EUR millions:
|671||Software & Analytics||EUR millions|
The FinTech sector is boomingMulti-Million Euro deals for many companies in EUR millions:
|25||Coya AG||EUR millions|
|88||Deposit Solutions||EUR millions|
Germany is highly attractive to foreign FinTech companies and has been named one of the top 10 global FinTech hubs. More than 83 international FinTech companies have started business activities in Germany.
What is driving the FinTech boom?Financing totals per sub-sector in Germany in EUR millions:
InvestmentsAlmost 10 times more invested in FinTech in 2017 as in 2012.
BerlinIn 2017, Berlin boasted 27 percent of Germany’s approximately 800 FinTech organisations.
Responsive approachesGerman financial institutions welcome FinTech with responsive approaches.
SynergiesCooperation and partnerships are on the rise, both within the FinTech sector and between FinTech and other industries.
Germany offers ideal conditions to investors in private equity
InvestmentsApproximately 300 associated companies invest in 1,100+ German companies every year.
Portfolio management5,000+ companies are managed in portfolios.
Attractive location71 percent viewed Germany favourably as a private equity investment location, compared to other countries.
GrowthIn 2018, PE investment reached EUR 9.6 billion with investments in 1,122 companies.
Leaders in private equity investmentInvestment volume in 2018 per region in EUR millions:
Private equity funds several sectors all over GermanyInvestment volume in percent:
|24||Business products and services||%|
|24||Communication, computer, electronic||%|
|13||Energy and environment||%|
|8||Consumer goods and services||%|
Venture capital plays a decisive role for innovative companies and for the future of Germany as a business location.
Federal Minister for Economic Affairs and Energy Peter Altmaier at the 20th German Equity Day
A great location for FDI
Stable locationPolitical stability and predictability distinguish Germany as well as its location between market centres in the US and Asia.
PassportingEU-passporting in the financial industries for easy access up to the 28 member states.
FrameworkGermany has the largest GDP in Europe, plus a skilled workforce, due to dual education system.
Living standards5 german cities in the top ten worldwide for quality of life.
Germany’s financial industry is trusted throughout Europe, with high certification standards managed by BaFin, the Federal Financial Supervisory Authority. BaFin supports the function and integrity of the German financial system, supervising more than 1,600 banks, 700 financial services institutions, 500 insurance companies, 6,000 domestic investment funds, and numerous other organisations and institutions (as of Dec. 2017). Overall, BaFin maintains trust in the German financial system.
European FDI leaderDevelopment of FDI projects in financial services in Europe (by number, 2010-2018)
Germany is an excellent location for investment and trade in the financial industry–whether in banking, insurance, private equity, clearing or FinTech sectors, among others. A solid, educated workforce, openness to foreign collaboration, along with stable regulation paired with groundbreaking innovation make Germany the choice for forward-thinking financial leaders, both in Europe and beyond.