That was my unexpected takeaway from the recent Innovate Finance Global Summit in London. The list of cities vying for the title of fintech trailblazer includes the current leaders (New York, Silicon Valley, London, Hong Kong, Shanghai, and Singapore), as well as a long list of aspirants, which includes Abu Dhabi, Copenhagen, Jakarta, Lagos, Sao Paulo, and Vilnius. All of whom are putting in place resources and marketing campaigns to attract entrepreneurs and capital. Interestingly, a number of financial regulatory agencies in some of these countries seem to have a dual role of regulation and promotion of their locale as a great place for fintech. To date, this is not a role taken—and one could argue needed—by U.S. financial regulators given the robust size of the U.S. fintech market.
The other notable thing was the number of interesting ideas bubbling up from the developing world. These fintechs are developing solutions tailored to address gaps and issues specific to their home countries or regions. With two billion individuals worldwide lacking access to the financial markets, the gaps and opportunities for new players are significant. Of note, there were a number of new solutions for banking, payments and investing that could be imported to address the 33.5 million under- and unbanked in the U.S.
Six years ago the Partnership Fund provided early funding to Grameen America to help them bring a micro-lending solution from Bangladesh to Queens. That experiment was a success and Grameen America has gone on to provide $318 million of small loans (increments of $1500-$6000) to over 41,000 low income women in New York City. The Partnership Fund is eager to support similar opportunities in payments, investing and banking services.
Forty-four is a number worth paying attention to and a reminder that New York cannot become complacent when it comes to its leading position in fintech. Those emerging centers are a potential threat, but also an opportunity to attract the best new ideas to strengthen New York’s financial services and tech sectors, as well as to expand access to financial and investing services for all New Yorkers.