Daniel Maier started his career in the financial center of North Rhine-Westphalia in 2005 at what was then WestLB in Düsseldorf, later moving to HSBC Bank on Königsallee. Today, the 44-year-old business economist resides with his company Chartered Investment in a building in Düsseldorf’s Friedrichstadt that previously housed parts of WestLB. “We are a kind of machine room,” says Maier, explaining the concept of the company, which offers products such as bonds and certificates as a technical platform for its customers. “Our issuance platform is the engine of many transactions.” The employees are “engineers” who ensure that the financial products meet all the technical and legal requirements of the customers. “This is how we open up new investment opportunities: We turn our customer’s idea into a bankable, fully regulated security.”
The company, which was founded in 2013 with Japanese partners, among others, is one of around 70 fintechs that have now settled in NRW. The term stands for the short form of the term “financial technology” and generally describes companies that offer innovative, technology-based application systems related to the topic of “finance”, according to the Deutsche Bundesbank, with which certain transactions are registered and also approved Need to become. Other major fintech players include crowd-funding provider Auxmoney and Compeon, a credit broker that works with around 200 banks. And it is highly digitized, without any branches.
Düsseldorf was once the most important German banking centre, ahead of Frankfurt/Main. Deutsche Bank had its own board office on the “Kö”. But the once proud location had to lose its feathers, partly because of the dismantling of WestLB, which had been so powerful for so long. And in Cologne, where the insurance industry in particular is strong, the traditional bank Sal. Oppenheim, founded in 1789, was only able to avoid its insolvency in 2009 by selling it to Deutsche Bank, which ceased its business operations in 2018. This decline is also reflected in the number of employees, which fell by around 11,000 across NRW from 2010 to 2021.
With new players such as Chartered Investment and Auxmoney, the financial center could gain in importance again, this time with a digital focus and innovative solutions. The Fin.Connect.NRW initiative, which was founded two years ago by the Ministry of Economic Affairs under the then department head Andreas Pinkwart (FDP), is also committed to this. This is backed by the credit industry associations (banks and savings banks), the head office of the Deutsche Bundesbank in North Rhine-Westphalia and the Chambers of Industry and Commerce (IHK). In order to strengthen the insurance industry and advance digitization, the industry initiative InsurLab Germany was founded in Cologne in 2017, supported by the city, IHK, university and TH Cologne as well as established insurance companies and start-ups. The association now has almost 90 members.
Until 2020 there was no financial center initiative in the decentrally structured NRW, unlike in Bavaria, for example, where almost all companies are based in Munich. As a result of the Corona crisis, however, the four NRW bank and savings bank associations also found that many things are now possible digitally and that closer cooperation would make sense in order to strengthen the financial center. And to support the necessary digital and climate-neutral transformation of companies and their financing in NRW. The Institute of German Economics (IW) in Cologne estimates that up to 70 billion euros would have to be invested annually in North Rhine-Westphalia for this transformation. Small and medium-sized companies in particular, but also financial institutions, are therefore facing new and major challenges. For this transformation and sustainable management, business models must be developed further quickly.
The new state government made up of the CDU and the Greens is obviously focusing on continuity. “Innovation and cooperation open up new opportunities for the financial sector, companies and for better mobilization of capital for transformation financing – especially for a climate-neutral economy,” said Economics and Climate Protection Minister Mona Neubaur (Greens) WELT. “That’s why we agreed in the future contract for North Rhine-Westphalia to further strengthen our financial center initiative Fin.Connect.NRW.”
For Steffen Pörner, Managing Director of the NRW Banking Association based on Düsseldorf’s Königsallee, fintechs are innovation drivers. “But they will not replace the classic banks.” Rather, both sides could work well together and benefit from each other. Numerous banks are already keen to cooperate with fintechs because they can implement innovations more quickly. Sometimes there are also takeovers in order to bring the know-how in-house, for example in programming.
At the same time, Pörner emphasizes that the banking center of NRW is still one of the strongest in a nationwide comparison. “We alone have 70 members of the private banks, 33 of which have foreign parent companies.” This also speaks for the internationality of the location. According to Pörner, the private institutes account for 90 percent of export financing in NRW and employ around 24,000 people here. There are also the cooperative banks, which have a similar number of employees, and the NRW savings banks (see chart). As Pörner emphasizes, with around 755,000 companies, NRW remains an important market in which some major banks generate up to a quarter of their German corporate customer business.
For Pörner, the really big competitors for the local financial markets are less the new fintechs. Rather, the real challenge is the so-called “GAFA” companies, as the European Union describes the US companies Google, Apple, Facebook and Amazon with their enormous capital and market power.
As far as fintechs are concerned, they have so far been more strongly represented in Berlin and Frankfurt/Main than in NRW, mainly because of the many start-ups in the capital. In NRW, however, these young companies would find the customers they need for their growth, which other locations would not offer, says Stefan Pörner from the banking association.
NRW is also a good business location for Daniel Maier, who comes from Bavaria. According to his own statements, his company Chartered Investment has so far launched products worth more than four billion euros for around 100 financial service providers. The company is now internationally active, in addition to the German branches in Frankfurt and Berlin, there are representative offices in Luxembourg and Singapore. A new subsidiary in the important financial center of Zurich is to further expand the business. The more than 30 employees include bankers, lawyers and IT specialists, six of whom, like Maier, have previously worked at WestLB. “So we are no longer a venture company,” says the entrepreneur. After the foundation, no further rounds of capital were necessary. “We were able to finance our growth ourselves.”