The word Fintech has evolved apparently to something that is now on everyone’s tongue over the past half-decade. With investments in the financial technology sector climbing to $22.3 billion in 2015, $1.8 billion in 2010 and $12.6 billion in 2014, a dramatic shift has been seen in the types of fintech firms getting the highest attention. During the initial phase, there were many startup firms that were looking to compete with the traditional banking sector but now a positive move has been seen towards collaboration. In the golden age of fintech, technologies like cloud computing, robotics and data analytics are accomplishing things that would have been unthinkable six years from now.
Banks and insurers need to invest in fintech. When they do, the combined effect of multiple technologies will be incredibly powerful.
For Example: The combination of cloud technology with Blockchain creates an environment that allows firms to collaborate securely. Similarly, combining mobile with machine learning leads to a platform that enables significant innovation.
New York, being the center of fintech innovation received more fintech financing than Silicon Valley for the first time. There are some startup firms that have been collaborative from the beginning. Between 2010 and 2015, the share of fintech investment directed at collaborative ventures doubled from 37% to 83%. New York-based startups are the most successful in developing innovations that address some of the trends that fintech experts view on a national level like cloud computing, crypto currency and automated investing advisory services.
The Bottom Line
As financial organization began to hold fintech innovation and US regulatory environment makes it increasingly tough for fintech firms to grow and scale, these collaborations pave the way for potentially changing the financial service ecosystem. The partnership fund for New York City and New York Fintech Innovation Lab will have an important role to play here in bringing partners together.