Over the past half-decade, the word “fintech” has evolved from an apparent spelling error to a word that is on everyone’s tongue. And in the United States and globally, New York is quickly becoming the center of fintech innovation. In the first quarter of 2016, New York received more financial fintech venture financing than Silicon Valley for the first time.
was invested in New York's fintech sector in 2015.
of fintech investment in 2015 went to New York companies.
From Competition to Collaboration
Fintech investment in North America has shifted away from ventures that compete against financial institutions and toward those that partner and collaborate with them.This shift was especially pronounced in New York: 37% of New York investment dollars went to fintech ventures that collaborate with financial institutions in 2010; that number had increased to 83% in 2015.
The reality of the U.S. regulatory landscape—combined with surging demand for digital innovation—makes the fintech venture investment boom a golden age for banks. As the changing regulatory environment makes it difficult for fintechs—particularly in the U.S.—to grow and scale on their own, many financial institutions are now structurally ready to adopt new technologies that could, in the long run, save banks time and money and rebuild profit margins.
Financial institutions need to continue to open up to startups and bake venture funded innovations into their business plans. Innovation and fintech shouldn’t just be something that takes place in a far-away incubator, it should be part of the fabric of every financial institution.
The Partnership Fund for New York City, in collaboration with Accenture, co-founded the New York FinTech Innovation Lab. The FinTech Innovation Lab is in its sixth year of helping early- and growth stage fintech companies accelerate product and business development by introducing entrepreneurs to top bank and venture capital executives through a 12-week program.