Where Next? - Fintech Talent

Emerging markets have proven to be fertile grounds for developing Fintech talent.

When you think of Fintech hubs you usually think of hubs with a strong start-up culture or locations with established links to the finance or tech sectors.  However, emerging markets have seen rapid growth in the use and development of Fintech, which in itself has also helped to develop new clusters of Fintech talent around the world.

The continued growth of the Fintech market

Fintech continues to transform banking, insurance, and other financial service markets around the world, especially in emerging markets.  The growth of mobile phone coverage and usage has allowed access to financial solutions for large parts of the population in developing countries where poor infrastructure led to low penetration levels for traditional banking services.

The Fintech market has evolved dramatically over the last decade, and the pandemic saw exponential growth in areas such as digital payments.  This led to a period of increased competition for skilled talent with steep rises in attrition rates and double-digit salary growth across many locations.  Recently, levels of salary arbitrage between existing fintech locations have narrowed and access to talent, rather than cost, has become the key driver behind strategic location decisions.

Emerging markets offer access to new pockets of Fintech talent – some of these clusters may start off specialising in one sub-sector of Fintech but the transferability of skills means that they offer potential to expand into other verticals.  Below we’ve highlighted a couple of the high growth clusters in Latin America, Africa and Asia.

Source: FinTech Magazine

Latin America

The rapid expansion in digital banking and payments in Latin America in the last decade has led to a growing eco-system of Fintech companies - especially in Brazil and Mexico. One of the largest digital banks in the world, Nubank is headquartered in Brazil and serves over 70 million customers in Brazil, Mexico, and Colombia.

São Paulo

Brazil’s Fintech growth has been driven by companies based in São Paulo for a number of years and is one of the world’s fastest growing Fintech hubs. The city is home to a number of digital banks, including Nubank, alongside companies focused on Insurtech, payment platforms and digital identity.

Mexico City

The use of banks and digital payments is still low compared to other markets in the region - cash is still king for much of the population.  However, there are signs of change, including increasing investment in international and national start-ups - Mexico now has the second largest number of Fintech start-ups, after Brazil, in the Latin America market.  There are close to 200 fintech startups, predominantly based in Mexico City.  Growth in the Fintech sector in the city has been driven by companies focused on crowdfunding, payments, financial education and business finance management.

Africa

Sub-Saharan Africa has the largest regional share of adults with a mobile money account according to the World Bank in 2021 and the region accounted for more than half of global mobile money service transactions.  However, the continent as a whole, still has the biggest population of adults without a bank account, which will continue to fuel growth in Fintech adoption for the region.

Nairobi

Kenya has the third largest financial sector in Sub Saharan Africa and high levels of mobile penetration.  The country has been building it’s Fintech sector for over 15 years and M-Pesa, which launched in 2007 and provides mobile money transfer services, is Africa’s largest Fintech provider.  Nairobi is often referred to as ‘Silicon Savannah’ and has developed a significant tech and Fintech labour pool.  The city has its Fintech strengths in payments and remittance, lending, blockchain, Investech and Wealthtech.

Cape Town

South Africa is an established trade and commercial hub for Africa with a proven financial services ecosystem.  Compared to the rest of Africa, the country has a high number of insured and banked population.  The Western Cape is home to nearly half of the tech start-ups in South Africa and over a third of tech start-up in Cape Town are focused on e-commerce and Fintech.  With its strengths in more traditional finance sector, the key Fintech subsectors in Cape Town are payments and remittance, lending, Investech, Wealthtech and Insurtech.

Asia

Asia already has established Fintech hubs closely linked to the financial hubs such as Singapore, Hong Kong and Tokyo, however the region has seen some of the highest rates of Fintech adoption over recent years and markets such as China, Vietnam and India have seen rapid uptake of Fintech tools amongst consumers and small businesses.

Mumbai

India has one of the world’s largest pool of tech talent and Mumbai is often bypassed in favour of cities such as Bengaluru, Chennai and New Delhi for traditional tech projects.  For Fintech, however, the city’s strong financial base has led to strengths in alternative lending, B2B Fintech, digital payments, Insurtech and Wealthtech.

Ho Chi Minh City

The Fintech market in Vietnam is relatively nascent compared to some of its larger neighbours in the region, but the last few years have seen a step change in growth.  The number of Fintech start-up in Vietnam nearly doubled during the pandemic and Ho Chi Minh City is home to close to 150 companies supporting a broad range of services from digital payments to wealth management, peer-to-peer (P2P) lending, and blockchain-based solutions.

What next?

The Fintech market is very dynamic and is set to continue expand across the globe.  Emerging markets offer considerable opportunities to access both talent and growth. 

In more traditional Fintech markets - 2023 has seen a number of Big tech companies such as Amazon, Meta, Alphabet and Microsoft reducing their global workforce – this could present an opportunity for Fintech companies to tap into an experienced pool of talent in what is a notoriously a tight labour market.

For more information on these and other emerging destinations, please connect with a Hickey EMEA Location Strategy & Incentives expert today: