Prime financial centre – Prime talent

As continental Europe’s number 1 financial centre, Frankfurt can offer AMLA a location that ranks among the world’s leading financial hubs. Following Brexit, Frankfurt has recorded by far the largest number of new license applications for banks and other financial services firms.

The Frankfurt area is also home to Deutsche Börse Group including Eurex, Europe’s leading derivatives exchange. In 2022, the average monthly trading volume on Deutsche Börse amounted to approximately €130 billion, and Eurex’s average monthly capital volume for derivatives amounted to €11.3 trillion.

A large proportion of the entities to be directly supervised by AMLA will be located in Frankfurt

Approximately 280 domestic and foreign banks are located in Frankfurt. Together with over 1,000 financial services firms and a large selection of international consulting companies, this creates an unparalleled ecosystem. It is anticipated that a large proportion of the entities to be directly supervised by AMLA will be located in Frankfurt – a considerable advantage for AMLA in organisational terms. Approximately 81,000 people are employed in Frankfurt’s financial sector today, thereby offering a deep talent pool for the region.

Where an innovative tomorrow is made

Frankfurt is an innovative financial hub integrated into a broad fintech network in Germany. The investment volume in the fintech sector in Germany in 2021 was higher than ever before. In addition to newcomers, established financial institutions such as Deutsche Börse are also driving the digitalisation of the financial sector from the Rhine-Main region.

With over 100 fintech firms located in the region, many of them with a focus on aspects of AML, the Frankfurt area can pride itself on a young, fast-growing ecosystem and great potential for B2B commerce. Firms in the Frankfurt Rhine-Main area have built an extraordinary network with other finance and fintech hubs worldwide – 75% of the start-ups in the region are cooperating with established firms. These partnerships will be an immense advantage in AML efforts. Frankfurt’s incubator for fintech initiatives, the TechQuartier, is driving innovation in the areas of artificial intelligence, blockchain, InsureTech, PropTech, GreenTech and RegTech. In addition, the Innovation Hub of the Bank for International Settlement (Eurosystem Centre) opened in Frankfurt one year ago.

The International Sustainability Standards Board (ISSB), a flagship institution that will set tomorrow’s global sustainability standards, has also chosen to locate in Frankfurt.

Germany is a pioneer in fintech – among the top 3 in the EU and among the top 10 worldwide

Supervisory experience and synergies

Frankfurt has a unique ecosystem of supervisory knowledge and infrastructure: It is home to the European Central Bank (ECB) and its supervisory arm (SSM), the European Insurance and Occupational Pensions Authority (EIOPA), the European Systemic Risk Board (ESRB), the Deutsche Bundesbank and the Federal Financial Supervisory Authority (BaFin).

Home to the ECB and the SSM: Information-sharing between authorities is key for effective supervision

Establishing AMLA within this outstanding environment of supervisory expertise will create synergies and a unique head start. Information-sharing between authorities is key for effective supervision.

During its set-up phase, AMLA will benefit from the ECB’s experience in direct and indirect supervision. Frankfurt’s short distances allow for enhanced interaction between authorities and can thus contribute to strengthening the European financial system. Ongoing cooperation between the ECB’s prudential supervision and AMLA’s AML supervision with regard to directly supervised entities as well as on emerging issues – especially the development of a possible “digital euro” – will further strengthen both authorities and increase the efficacy of banking and AML supervision over time.

Numerous cooperation opportunities in Frankfurt and the Rhine-Main region

Located in Frankfurt, AMLA will also benefit from the close proximity to other authorities and institutions with links to AMLA’s tasks. For example:

• Federal Financial Supervisory Authority (BaFin) with its role in the prevention of money laundering in the financial sector
• Federal Criminal Police Office (BKA) and the Hessian State Criminal Police Office as security authorities with overriding strategic and planning tasks
• Anti Financial Crime Alliance (AFCA), a flagship project where public authorities and private companies (in particular, banks located in Frankfurt) cooperate strategically in combating money laundering and terrorism financing
• The Frankfurt office of the Global Legal Entity Identifier Foundation (GLEIF), which is responsible for the GLEIF’s main operating activities and provides open, standardised and high-quality reference data on legal entities.