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
Germany is a great place to do business, in the financial sector and beyond
Top 5
According to the World Economic Forum Germany is rated in the top 5 worldwide for quality of infrastructure.Stable labor costs
According to a 2020 Eurostat report, German labor costs are some of the most stable in Europe.Labor productivity
Germany is ranked among the countries with the highest labor productivity.FDI
Due to attractive conditions, Germany has over EUR 800 billion of FDI.Germany’s financial sector is world-renowned
SME economy
A high demand for financial services ensures a healthy market, due in part to the German SME economy (known as the Mittelstand).Partner and facilitator
The financial industry acts as a partner to of the real economy.AAA rating
The German financial sector is an internationally recognised, attractive market with a very good financial infrastructure and an AAA rating.Proven structure
BaFin and the Deutsche Bundesbank provide proven structure, reliability and security.Financial and insurance activities contributed nearly EUR 120 billion to the German GDP. They are part of the service sector which accounts for about 70 percent of the German GDP.
There were 1,717 credit institutions active in Germany in 2019, of which 276 were private banks. The banking sector has a workforce of around 500,000 people. The total assets of the German banking industry amounted to EUR 8,359 billion in 2019.
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.
According to the Global Financial Centres Index (GFCI) Frankfurt is a leading European financial centre
Global relevance
Frankfurt is ranked 9th in the world.Significant
In total 5 German cities are listed in the GFCI 29 Top 50: Frankfurt, Hamburg, Berlin, Stuttgart and Munich.Development
The developments of Frankfurt and Stuttgart are listed in the GFCI list of global financial centres likely to become more significant. Stuttgart ranks third.European leaders
Frankfurt is listed right behind London and above 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 27 EU member states, Frankfurt’s network of over 200 credit institutions, 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 the non-euro countries. With market participants connected from 700 locations worldwide, trading volume at Eurex exceeds 1.8 billion contracts a year and makes it the market place of choice for the derivatives community worldwide. 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.
Germany dominates the reinsurance sector in Europe and is the second largest reinsurance market in the world
Share of global premium income in reinsurance policies in percent:| 11 | Switzerland | percent |
| 6 | Bermuda | percent |
| 6 | Great Britain | percent |
| 27 | USA | percent |
| 19 | Germany | percent |
The future is FinTech: An innovative sector linking the German financial sector to various industries
German FinTech companies rely on cooperation instead of disruption
Growth
FinTech cooperations have almost doubled since 2014.Partners
The most popular cooperation partners are banks and insurance companies.FinTech centres
The key FinTech cities are Frankfurt, Munich, Berlin and Cologne.Categories
Cooperation types comprise operational (63 percent), financial (31 percent), and other (6 percent).FinTech ranks among the TOP 5 in German venture capital investment.
Financing amounts per sector in Germany in EUR millions:| 976 | E-commerce | EUR millions |
| 1040 | Software & Analytics | EUR millions |
| 1158 | Mobility | EUR millions |
| 757 | FinTech/ InsurTech | EUR millions |
| 670 | Health | EUR millions |
Germany is highly attractive to foreign FinTech companies and has been named one of the top 10 global FinTech hubs. More than 100 international FinTech companies have started business activities in Germany.
Germany offers ideal conditions to investors in private equity
Private equity in Germany: A growing market
Investments
Approximately 400 associated companies invest in 1,000+ German companies every year.Portfolio management
5,500+ companies are managed in portfolios.Attractive location
70 percent viewed Germany favourably as a private equity investment location, compared to other countries.Growth
In 2020, PE investment reached EUR 12.6 billion with investments in 1,500 companies.Private equity funds several sectors all over Germany
Investment volume in percent:| 16 | Business products and services | % |
| 39 | Communication, computer, electronic | % |
| 4 | Construction | % |
| 2 | Energy and environment | % |
| 6 | Financial and Insurance Industries | % |
| 15 | Biotech and Healthcare | % |
| 2 | Transportation | % |
| 14 | Consumer goods and services | % |
| 2 | Others | % |
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
Germany: An ideal place for foreign investment
Stable location
Political stability and predictability distinguish Germany as well as its location between market centres in the US and Asia.Passporting
EU-passporting in the financial industries for easy access up to the 27 member states.Framework
Germany has the largest GDP in Europe, plus a skilled workforce, due to dual education system.Living standards
Germany is home to 7 of the 30 most attractive cities worldwide (and offers a high quality of living throughout the entire country.)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. Overall, BaFin maintains trust in the German financial system.
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.