Shanghai maintains its 3rd place as a global financial technology hub

Shanghai remains third in the 2024 Global Financial Technology Center Development Index, released Friday.

Released for the second consecutive year, the list was released during the sixth Shanghai International Financial Technology Forum, which kicked off on Friday. New York continues to be at the top of the list, when it comes to indicators of the level of fintech development, growth potential and overall development environment.

London maintains its second place, followed by Shanghai, Beijing, Shenzhen, Tokyo, Chicago, Hong Kong, Singapore and San Francisco. Even though the top five positions remain unchanged, it can be seen that the fintech development gap between these cities has narrowed, which shows increasing competition in this sector, according to experts present at the forum.

Shanghai has made significant progress in the application of fintech, dislodging all other cities on this metric. The city has also surpassed London in terms of research and development investment, innovation outcomes and the size of the information technology industry. In addition, Shanghai venture capital has seen rapid growth over the past year, allowing it to climb one place to fourth this year in terms of fintech growth potential. , according to the list.

Chen Yun, professor at the School of Public Economics and Administration at Shanghai University of Finance and Economics, said at the forum that investment in fintech has cooled globally, artificial intelligence having attracted the most attention.

Furthermore, the development of fintech centers has diversified. Major cities in North America, Western Europe and Southeast Asia have taken the lead in financial technology development globally, while China and the United States are more active in innovation in financial technology, she added.

The White Paper on Shanghai Fintech Development (2023-2024) was released by the Shanghai Fintech Industry Alliance at Friday’s forum.

Shanghai is home to around 2,000 fintech companies. Shanghai-based commercial banks, such as Bank of Communications and Shanghai Pudong Development Bank, have taken the lead in fintech development nationwide, although the investment growth rate has slowed over the past year, said Li Feng, vice dean of Shanghai Jiao Tong. Shanghai University Advanced Institute of Finance.

Among the 12 securities brokerages in China that have invested more than 1 billion yuan ($137 million) in fintech development, four of them are based in Shanghai. Fintech innovation projects in Shanghai generally include the participation of various institutions and the integration of different technologies, such as the integration of AI, blockchain and cloud computing, Li said.

Under closer scrutiny, Pudong enjoys many advantages in terms of fintech ecosystem, as a large number of financial service providers have set up shop in this district. Xuhui District in southwest Shanghai has taken the lead in applying AI foundation models. Xuhui also hosted a large number of industry leaders specializing in software system integration, confidential computing and network security, he said.

Huangpu District in central Shanghai is more competitive in terms of asset management and insurance technologies. Hongkou District, in the northeastern part of the city, has a greater competitive advantage when it comes to innovative financial companies, asset managers and financial management service providers, Li added.

In September, the Shanghai municipal government released an action plan aimed at building Shanghai into a higher-quality international financial technology center. The development of financial IT and the construction of corpus infrastructures, which are crucial for the development of AI, were highlighted in the action plan.