The question I often get is: “Who will claim the crown of being the FinTech capital of the world? New York or London?”
One year ago we launched our first FinTech-focused program in London in partnership with Barclays. Earlier this year, we proudly announced the expansion of the Barclays Accelerator, powered by Techstars, to New York City. Maybe the question just got a whole lot harder to answer. The reality is that both cities are going to be centers of one of the largest industry disruptions that we have seen. And Techstars and Barclays plan on being in the middle of it.
To give you a sense of the opportunity that FinTech presents, let’s put things in perspective. Financial services in the United States is seven times larger than all of advertising spend (including TV, online, search, etc). And yet, when we compare the number of exits and IPOs between FinTech and AdTech (Google and Facebook included), one might logically conclude that things are in reverse – that it must be advertising that is seven times larger. The cynics would say that this disparity represents the barriers of a regulated industry. While regulation cannot be denied, I prefer to think that the blue ocean that is FinTech has simply been waiting for the timing to be right.
And that time is now. First, the talent shift is tipping. Do you remember when you were in college, and many of the most brilliant minds were recruited into the banks? Well, with the significant industry shake-up that we’ve seen over the last few years, there’s a steady stream of talent leaving to establish FinTech companies to solve the problems that they experienced working in the industry.
Second, regulators are taking a much more proactive stance on regulation for the financial services industry, which is creating opportunities for FinTech startups. This is an outgrowth of government initiatives meant to decrease the influence of “too big to fail” mentality.
Third, the venture capitalists are playing their part, funneling hundred of millions of dollars into FinTech innovation and in so doing, are making FinTech the fastest growing segment in the VC market. Finally, the incumbents are waking up and taking an active stance in fostering innovation. This is a critical final piece of the puzzle because the incumbent banks play a critical role for the ecosystem as they can be partner, distributor, investor, and acquirer, all rolled up into one.
Through our accelerator partnership, Barclays is taking a leadership position in the development of both the London and now New York City FinTech ecosystems. It has a strong presence in both cities and plans to bring its international banking network to bear in helping start-ups who are admitted to the accelerator. The question I often get is: “Why is Barclays doing this?” I can only answer this from what I have seen managing the London program with them. Barclays sees a future where a large portion of financial services innovation is going to happen outside its walls. In response, Barclays believes that a big part of its future success will be based on its ability to support and partner with the drivers of outside innovation, namely FinTech startups.
Both the New York and London accelerators are Barclays’ tent pole initiatives to work with early stage companies. It is being driven from the top down with tremendous support and participation by the entire senior management team. Quite frankly, if you are a startup that would like to work with an international financial services provider that operates in over 50 countries and serves customers across the globe, you will want to apply for this program now.
Applications to the inaugural Barclays NYC Accelerator powered by Techstars are open. Applications close May 10.