A global guide to the SMB market for fintechs and financial service providers

Germany

Read on to learn about:

• The size and composition of the small business market in Germany
• The fintech ecosystem and regulatory environment
• The top financial platforms in the region

The market at a glance

Size & make up of the market

Germany has a higher proportion of larger SMBs than average, and accordingly, a higher number of profitable SMBs.

International trade

German SMBs are almost half as likely as the OECD average to be engaged in international trade: 19% export; 28% import.

Most popular financial software

Datev, a desktop package, is the market leader in ERP software, and is particularly popular with larger SMBs. Shopify and Ecwid lead the way in eCommerce, with similar market shares.

The fintech ecosystem

The fintech sector is growing. Outside of payments, however, it’s hampered by conservative financial services regulation. For instance, fintechs need to rely on the licenses of traditional banks.

Top financial software platforms

77% 2M German SMBs have specialist bookkeeping or ERP software
9% of German SMBs use spreadsheets in place of accounting software
14% fully outsource bookkeeping to accountants

SMB tech readiness and the fintech ecosystem

Tech readiness and regulatory environment

Although the infrastructure is in place for high adoption of technology, i.e. availability of high speed internet, SMBs have been slow to adapt to selling online and using cloud computing.

Recently, the German government has introduced measures to address this, such as creating 26 Mittelstand 4.0 Competence Centers where SMBs can find out what tech & capabilities are available to them and 'Digital Now', a program where SMBs can apply for the government to cover up to 40% of their new technology.

Fintech ecosystem

Germany's fintech ecosystem is maturing. There are currently over 10,00 active companies in the sector, and in 2021, they received more investment than any other area of technology.

EY reported in 2019 that Germany's fintech adoption rate was 64%, equal with the global average but lower than other European nations like the Netherlands and the UK.