The Geography of a FinTech Hub. A study of the FinTech hub in Stockholm

Abstract

FinTech is a relatively new industry, a sector where traditional finance industry meets hightech firms which has led to new financial products and altered the way we today make payments, borrow, lend and invest. In addition, the rise of the FinTech sector has produced many new firms and startups. The objective with this report was to study the FinTech cluster in Stockholm. The two research questions were firstly to define the shape of the FinTech cluster and how it relates to the incumbent FABS cluster, secondly to find forces that shape the financial geography of the Stockholm FinTech hub. Based on a spatial mapping of the visiting addresses from 66 FinTech and financial firms (FABS) located in Stockholm two distinct cluster were identified. The result of the mapping suggests the financial geography of the Stockholm FinTech cluster is highly concentrated with firms located in a condensed area in the centre of Stockholm. Furthermore, the FinTech cluster is located outside, but still very much adjacent to the FABS cluster. Using prior empirical studies, the framework of cluster theory, and an interview with a successful FinTech firm in Stockholm, this report suggests a few factors shaping the Stockholm FinTech cluster. Consistent with prior studies, the finding in this report is that a important force driving the spatial development and growth of the FinTech cluster is customer proximity and personal relations. Being closely located to the FABS cluster enhances the opportunity for knowledge spillover between new technology and old finance which can lead to new innovative products, new firms and economic growth.