A decade ago, cities fought to be financial hubs; today they fight to be financial technology (fintech) hubs. While centres such as London, New York and Silicon Valley claim a strong status as pre-eminent fintech hubs, there are plenty of emergent centres snapping at their heels.

This expansion in fintech globally is illustrated by the Startup Challenge held by Swift’s Innotribe arm. Each year, Innotribe hosts a series of Startup Challenges, seeking to identify the best ideas around the world. Along with North America and Europe, startup challenges are now held in Africa, Latin America, Asia Pacific and Russia.

Deloitte’s Top 5 Fintech Hubs Global Report of 2017 cited Statista research that the total transaction value of fintech would reach US$3,300,958 million in 2017. In A tale of 44 cities Connecting Global FinTech: Interim Hub Review 2017, Deloitte assessed 44 cities that have established fintech hubs. These range from ‘old hubs’ such as Amsterdam, London, New York, Singapore, Sydney and Silicon Valley, to new hubs such as Abu Dhabi, Auckland, Moscow, Lagos and Edinburgh. All 44 cities in Deloitte’s report are members of the Global FinTech Hubs Federation (GFHF). The Federation is bringing together fintech hubs to provide a “neutral, cross-border platform to encourage greater collaboration and engagement”.

It’s sometimes too easy to assume that the most advanced fintech development will be taking place in the Western world. But this isn’t the case. Take Africa, for example, which has an old hub in Johannesburg and a new one in Nigeria’s commercial centre, Lagos. The latter holds promise as Nigeria’s largest city and commercial capital. With a population of around 190 million, Nigeria is the most populated country in Africa and has “a large number of vibrant and innovative young people”, says the Deloitte report

The top fintech companies in Nigeria include Interswitch, Systemspecs Remita, Paga, Paystack, Appzone, eTranzact, PayPal Nigeria, PiggBank.Ng, Flutterwave, NIBSS, Jumia paycard, OneCare ditch and Niarex Bitcoin. Areas of focus include cloud computing, mobile, social media, banking as a service and messaging.

Johannesburg hosts a many bank headquarters and is therefore something of a fintech magnet on the African continent. Fintech innovations tend to be aimed at creating better services for low-income consumers, as well as for the banked and under-banked, says Deloitte. Among the success stories are SnapScan, RainFin, Yoco, Peach Payments, WizzPass, PriceCheck and PayU.

Innotribe’s Africa Startup Challenge coincides with Swift’s annual Africa Regional Conference. At last year’s event in Abidjan in Côte d’Ivoire, three winners were selected, including Lagos-based Irofit Technologies. The company provides a mobile point of sale system that helps small retailers process card payments in real time, even in settings where internet connection is poor.

Other winners include Kenya-based Sokowatch, which is a ‘last mile’ distribution channel for consumer goods companies. Its SMS ordering system helps the companies to better reach and sell more to small retail shops.

Finally, Rwanda-based Vugapay won for its system, which helps mobile money merchants to get paid across Africa.

Africa has a healthy fintech landscape and fintech is not a new concept in the region, according to Suzanne Prosser, group general counsel at MicroEnsure, a developer of emerging markets insurance products. She told a Hogan Lovells conference in London in 2016 that: “Innovation is part of the DNA of Africa.” African consumers embraced mobile payments technology well before it gained traction in more developed economies, for example.

At the same event, Edward George, head of group research at pan-African bank Ecobank, said there are “endless start-ups” investigating the application of technology to address unbanked people in the region. Companies that are using disruptive technologies such as blockchain are forging ahead in financial services in Africa and “unless banks get their heads around this” they could lose around one third of their business in the region during the next five years.

Last year Russia was added to the Innotribe Startup Challenge club. Russia’s Swift community is one of the cooperative’s largest user groups and had approached Innotribe to help foster collaboration between financial institutions and fintechs. An array of fintechs are emerging from the country, including a significant number of payments, lending, personal financial management and blockchain-related start-ups.

Lev Khasis, chief operating officer and first deputy chief executive of Russia’s Sberbank, says many Russian banks began innovative fintech developments in the early days of the internet era, unburdened by the significant legacy IT investments that Western financial institutions faced.

“There are quite a few banks in Russia that may be considered state of the art in technology and innovation. Sberbank probably was the only Russian bank facing legacy issues and massive non-digital infrastructure. During the past eight years we have been catching up, aggressively investing in technology and building up digital banking,” he said.

An attitude of ‘mobile first’ was in the technology DNA of Russia since the beginning of the internet and mobile era, he said, and is one reason Russia is one of the most “internet addicted” countries in Europe. “We therefore have both opportunities and challenges: there are early adopters here, but they are quite mature, demanding and have high expectations.”

inning startups receive a cash prize and the opportunity to share their insights about FinTech innovation in Russia with the global financial community during Sibos

The Russian Startup Challenge was held in Saint Petersburg in July 2017. All three winners were based in Moscow, which the Deloitte report describes as a new hub and well-recognised for its technological talent pool, especially in areas such as cyber security, data analytics and web programming. “With the ambitious state plan to turn Moscow into a global financial centre and strong government support for innovation, the fintech industry is quickly gaining pace both in terms of the number of startups and venture capital investments. Moreover, being one of the largest consumer markets in the world, Russia has a great scope to increase financial inclusion,” says the Deloitte report.

The Challenge winners were Oz Forensics, Scorista and Talkbank. Oz Forensics helps financial institutions to reduce digital fraud risks and costs by automating know your customer processes with image, video and biometric analysis. The company says its face recognition technology is 98 per cent accurate and delivers savings of 20 per cent to users, with return on investment from the first month.

Scorista provides risk management assistance for non-bank lenders, specializing in the microfinance market. The system is aimed at large and small lenders. For big companies that have their own risk department, Scorista can help large companies with their own risk departments to create scoring models more quickly and effectively. For medium-sized lenders, the company can provide support in workflow automation, providing risk managers and underwriters with speedier applications approval and more accurate scoring. Scorista also targets new companies about to enter the microfinance market.

TalkBank aims to foster fundamental research in the study of human communication. It will construct sample databases within each of the subfields studying communication. It will use these databases to advance the development of standards and tools for creating, sharing, searching and commenting upon primary materials via networked computers.

In late 2016, the Bank of Russia approved the establishment of an association for Financial Technology Development (Fintech Association). The Association includes founding members such as Alfa Bank, VTB Bank and JSC National System of Payment Cards. The Association’s objective is to study, research and implement practical solutions within the fintech sector. Technologies to be explored include distributed ledger and open application programming interfaces.

Financial technology is big business: globally, $17.4 billion was invested in 1436 deals in 2016, says the Deloitte report. The mania for investment in fintech continues: it was the leading sector for investment in 2017 in the UK technology sector, according to a Pitchbook report. UK fintechs

attracted £1.34 billion in venture capital funding during 2017. London’s startup economy led the way, accounting for over 90 per cent of all money raised by UK fintech firms.

With such significant levels of investment up for grabs, it is likely that many more cities will vie to become fintech hubs. Which ones come out on top remains to be seen.