Digital money, green fintech and cyber protection: Where the German fintech scene needs to go now

The situation is good: Germany remains one of Europe's largest fintech markets. Now it's important not to squander this opportunity. The pressure is on, especially when it comes to AI. 5 Key Takeaways from Bafintech

There's a consensus: Germany remains one of the largest fintech markets in Europe. The funding climate has returned to normal after the lows of recent years. Furthermore, Germany is a leader in AI research – but so far, it has barely managed to transfer this strength to the financial industry.

These were the key points discussed by experts at the Berlin Fintech Conference Bafintech on July 2 and 3. Bafin and the Bundesbank jointly hosted the conference at the EUREF Campus in Berlin-Schöneberg, where research usually focuses on energy, sustainability, and energy. Instead, the focus was on questions such as how AI, quantum computing , and regulation should converge in the financial industry of the future.

1. German fintechs need a core competency : Simply being a fintech isn't enough. In Poland, the focus is on cybersecurity, while in Southern Europe, it's on ESG. The German fintech scene also needs to position itself in the market.
2. Fintechs and established financial companies must think more from the customer's perspective. According to the panelists, customers expect holistic solutions that allow them to manage their entire finances in a single app. Players like Trade Republic , N26 , and Scalable Capital demonstrate how this can be done by constantly expanding their product portfolios. Platform models are essential because they build the financial infrastructure.
3. Embedded finance plays a significant role: Embedded payments and embedded insurance have long been established, and embedded wealth—the integrated accumulation of wealth—is gaining increasing importance here as well. According to a McKinsey study, experts expect that by 2030, embedded finance will account for 10 to 15 percent of the banking sector's total revenue.
4. The trends that will shape the fintech scene in the coming years include digital money, green fintech, and cyber protection. AI-supported financial consulting, i.e., the optimization of insurance and portfolios using AI, will also become a topic.
5. Germany lacks growth financing: Creating a "Global Category Leader" from Germany requires large amounts of financing – in the range of 50 to 100 million euros. But there is a lack of growth financing in this country to fill this gap.

Antonia Remmerbach

"Finance is increasingly becoming a tech business. Digital technology is defining what is possible in the financial sector," says BaFin President Mark Branson. Regulation is not a hindrance, but an important building block for functioning markets. Innovation and stability must go hand in hand if Germany wants to remain competitive as a financial center.

Technologies such as distributed ledger (DLT) and tokenized securities could completely transform business models. At the same time, the financial sector must take the risks of artificial intelligence and quantum computing seriously.

Peter Heidkamp, ​​Vice President of the Financial Services Industry at Aleph Alpha, made it clear: "The technology is there. We have DORA, the AI ​​Act, and management frameworks – now companies simply have to get started." At the same time, he warned against false expectations of absolute data security and called for more transparency. AI systems must be explainable and traceable to prevent manipulation and hallucinations.

Nicole Plich

Naturally, these technologies also affect German fintechs. In a panel discussion, Laura Macchioni (European University Institute), Nadine Methner (ING Group NV – ING Bank of Italy), Jan Rosam (EY Consulting), and Sebastian Schäfer (House of Finance & Tech Berlin) discussed the challenges and prospects of the German fintech scene.