New York, the largest city in the U.S., is an architectural marvel with plenty of historic monuments, magnificent buildings and countless dazzling skyscrapers. Now, with the rise of fintech, New York also counts itself as home to the latest technology empowering the financial industry’s move into a new chapter.
Here’s three opening observations from LATTICE80 Founding CEO Joe Seunghyun Cho:
- New York has became a leading startup hub, now ranked no. 2 in the world with 6-8k active startups.
- While the traditional side of Wall Street is still doing OK, lots of tech companies are moving and changing the culture of New York.
- Not enough startup spaces and ecosystem players are available in the city yet compared to the market size and the speed of growth. Fintech is a natural fit for New York and the city should open a lot more of these spaces. At LATTICE80, we are very excited to expand to New York to connect the U.S. and Asia.
According to Accenture, in the U.S. alone fintech investment could reach $4.7 billion annually by 2018 – with potentially nearly double the rate of deals done today. In New York City, it’s forecast to reach up to just shy of $1 billion.
The city’s biggest share of fintech investment deals was from lending companies: 47 percent of all deal values and 21 percent of the number of deals.
“It’s that entrepreneurs are close to the heart of the financial services industry,” Accenture writers. “There’s a combination of innovation and domain expertise in the city, with companies having access to a wide talent pool.”
Indeed, New York-based startups are among the most successful in developing innovations that address some of the trends that fintech experts are seeing on a national level:
- Cloud computing
- Automated investing advisory services
New York is also seeing strong demand from China.
Writing in the Financial Times last month, Emily Feng and Don Weiland reported: “Qudian… which raised $900m in the share sale, is the latest to underline [U.S.] investors’ appetite for the collision of lending and technology that has given rise to the Chinese fintech sector.”
“Two days before Qudian’s debut [last month], Chinese peer-to-peer lender Ppdai announced plans to raise $350m in New York, and at least a dozen similar issuers are preparing flotations.”
New York’s fintech sector has grown at twice the rate of Silicon Valley’s over the past five years, Accenture’s report concludes. While Silicon Valley is the biggest fintech cluster in the world, New York ranks second.
Silicon Valley’s preeminence in the broad technology sector remains unchallenged, but New York has the opportunity to evolve as a complementary center dominant in fintech.
Finally, unlike Silicon Valley, New York offers proximity to a huge potential customer base of financial institutions and a vast existing financial technology workforce, in addition to its burgeoning venture ecosystem.
This makes the city a natural contender to be a world-leading fintech capital, bringing new jobs and capital to New York and helping to secure the long-term competitiveness of the U.S. financial services industry.
And 2018 could be a renaissance for fintech in New York as more major players are coming into the market and the ecosystem is ramping up. LATTICE80 is excited to be a part of the story.