Q&A: Hendrik Hertel, Senior Manager Financial Services at KPMG

In this exclusive Q&A blog post, we delve into the insights of Hendrik Hertel, a Senior Manager at KPMG who is deeply involved in the realm of Digital Finance, particularly in Frankfurt. As a pivotal financial hub in Europe, Frankfurt boasts unique advantages that foster innovation within financial services. Our discussion highlights the city’s strategic position, regulatory expertise, and vibrant startup ecosystem, supported by initiatives such as TechQuartier's TQ Accelerator: Digital Finance program. This program, with KPMG as a key partner, plays a crucial role in nurturing FinTech startups and reinforcing Frankfurt's status as a leading financial center. Additionally, we explore the impact of Open and Embedded Finance on traditional financial institutions and how KPMG leverages technology and partnerships to drive secure and efficient financial data aggregation and innovative solutions in digital finance.

>> Find more details on the TQ Accelerator: Digital Finance program.

Q: As a Senior Manager at KPMG, deeply involved in the realm of Digital Finance, particularly in Frankfurt, what do you see as the city's unique advantages in fostering innovation within financial services? 

A: Having spent 15 years in the financial industry and most of my career in the city I can say: that Frankfurt, in the heart of Europe, is the leading financial hub in Germany and a leading financial center in Europe. By the way it is the only one worldwide housing two central banks: European Central Bank and German Federal Bank. Moreover, Frankfurt is home to many other important financial institutions, regulators and authorities, including AMLA, ISSB and BaFin, which makes it a hub for financial regulation and policy-making. It hosts a vibrant start-up ecosystem. What is often overlooked: Frankfurt is also the digital capital of Europe housing the world’s leading Internet Exchange and a significant number of Data Centers. And the area is a center for financial and technological science: public and private institutions offer cutting-edge research and future thinking.

Altogether, to me Frankfurt is the perfect place to combine regulatory expertise and finance know-how with access to capital, a modern digital infrastructure and talent from various top universities in the Rhine-Main-Area. 

"We observe that despite economic constraints, traditional financial institutions continue to invest not only in artificial intelligence but also in Open and Embedded Finance to unlock these opportunities and advance their business models."
- Hendrik Hertel, KPMG

Q. KPMG is a partner for TechQuartier’s TQ Accelerator: Digital Finance program. Could you elaborate on its significance in nurturing FinTech startups in Frankfurt? How does the program contribute to the city's status as a leading financial center? 

A: Frankfurt attracts talented entrepreneurs and innovators from all over Europe. They all know that the city will leverage their flexibility and agility in implementing new technologies to create tangible solutions for the finance industry. With its clear focus on bridging the gap between corporates and startups, it fosters a lively dialogue and collaboration in the finance sector and helps strengthen the city’s ecosystem, which is the hallmark to Frankfurt’s reputation as a leading financial center. 

Q. In the landscape of Digital Finance, we often hear about Open and Embedded Finance. How do these concepts influence traditional financial institutions, especially those based in Frankfurt? 

A: Open and Embedded Finance has the potential to significantly influence the business model of traditional financial institutions by fundamentally transforming how consumers access and use financial products. From online retailers providing 'buy now, pay later' (BNPL) options to food delivery apps offering personal loans, non-financial companies embed finance into their transaction processes and speed up the customer journey. However, traditional financial institutions are not only facing increased competition from new players in the market. They are also provided with growth opportunities: The integration of financial products and services into other companies' platforms can open new revenue streams. It also gives financial institutions access to a broader customer base and can provide valuable data that can help to extend the value they can provide to their customers. Accordingly, we observe that despite economic constraints, traditional financial institutions continue to invest not only in artificial intelligence but also in Open and Embedded Finance to unlock these opportunities and advance their business models. 

Q. From your perspective, how is KPMG in partnership with TechQuartier leveraging technology to ensure secure and efficient aggregation of financial data for its clients? 

A: KPMG utilizes technology to ensure secure and efficient aggregation of financial as well as other sorts of data for its clients. This includes, for example, the use of cloud platforms and the use of data analytics tools. Technology is evolving rapidly, and so in collaboration with TechQuartier, KPMG is permanently seeking to develop and implement new innovative solutions for clients and thus create value for the financial industry.

Q: Could you discuss some innovative approaches or technologies KPMG is deploying in Frankfurt to address challenges in Digital Finance effectively? What role does the partnership with TechQuartier play here?

A: KPMG utilizes various innovative approaches and technologies to effectively address challenges around digital finance. These include, for example, the use of blockchain technology, the implementation of AI and machine learning tools and the development of digital identity solutions. The partnership with TechQuartier plays an important role here, as it provides KPMG with additional options to collaborate with other innovative companies and start-ups and benefit from their expertise and experience.