New York City has long been home to some of the world’s biggest banks and their key decision makers. So, it should come as no surprise that the Big Apple today is also one of the capitals of financial technology, as well.
But a mere six years ago, when asked by Accenture where they look for technology, CIOs and CTOs at six major New York City banks said the West Coast and Boston. That’s when the Partnership Fund for New York City, the investment arm of the Partnership for New York City, and Accenture identified New York as the location for the first FinTech Innovation Lab.
The FinTech Innovation Lab is a 12-week mentorship program for early- and growth-stage companies in the financial services sector. The lab gives them the platform they need to develop, test and prove their value propositions to the world’s leading banks, which volunteer their time and effort to the program.
The program started with 10 sponsoring financial institutions and now there are nearly 30, spanning insurance, money management, hedge funds and payments. The FinTech Innovation Lab also works with more than 25 experienced entrepreneurs, many of whom were part of New York City’s first generation of successful fintech companies and all of whom can provide mentoring and advice for building a scalable tech company.
During the first few years of the lab, big data, cyber security and mobile banking technologies were key areas of focus for program participants. Over the past two years, distributed ledgers and blockchain have risen in importance. For 2016, key themes include blockchain and artificial intelligence.
The FinTech Innovation Lab was envisioned as a way for large New York financial institutions to support the growth of enterprise or business-to-business (B2B) technology in the city, and identify cutting-edge technologies for banks. The Partnership Fund focuses on investing in low-income neighborhoods and large civic projects in New York City. It also looks for opportunities to catalyze the growth of new tech sectors where the city has a competitive advantage.
Over the years, 31 lab graduates have gone on to conduct 107 pilots; raise close to $300 million in financing; and create more than 200 jobs. Moreover, about 40 percent of participating companies have been founded or led by women or minorities. By regularly bringing together entrepreneurs with new ideas, seasoned entrepreneurs, venture capitalists and bank executives, the lab has played a key role in creating a more visible and better connected fintech ecosystem in New York City.
Fintech is one of the fastest growing sectors in the city, and it’s growing faster in New York than in other places. Between 2013 and 2014, deal value in New York City grew by 32 percent to reach a new high of $768 million. New York has now surpassed Boston as the second-largest entrepreneurial center in terms of venture dollars invested ($7.3 billion versus $6.1 billion in 2015).
As a result of the FinTech Innovation Lab, dozens of the leading financial institutions in the world are now engaged in fintech. After several years in New York City, the program has been expanded to London, Dublin and Asia Pacific.
Learn more by reading the newest report:
Read the interview with Maria Gotsch, President and CEO of the Partnership Fund for New York City:
Learn about the companies featured in the most recent NYC Startups Showcase: