I recently had a chance to talk with John Taylor of the Delaware Prosperity Partnership about financial technology or “Fintech.”
John authored a recently released report on the key area of the Delaware economy that is worth checking out.
The report comes with an optimistic outlook on prospects for fintech in Delaware but cautions that maintaininga competitive advantage will take a broad-based partnership in the public and private sectors.
Taylor says one somewhatsurprising finding comes from Delaware holding down a top position in the number of fintech patents. Fintech wannabes like South Dakota trail in the key measurement.
To many of us fintech remains a somewhat mysterious term that popped up fairly recently.
Banks have always relied on “fintech” before it was “thing”
The early focus was on mainframe computers.
Then came what some saw as the possible Y2K apocalypse from old programsunable to handle the millennium.
Accompanying Y2K was a technology bubble that collapsed, thanks in part to the lack of high-speed residential broadband and the limits of personal computers. We also had shaky businesses that were well funded but later collapsed.
Banks had previously felt the impact of the turmoil of Y2K on their information technology budgets, but there was no turning back.
Then the tech boom returned, spurred by increasingly powerful smartphones capable of handling transactions.
That led to well-financed Silicon Valley start-ups and spurred legacy banks to follow suit in developing apps capable of handling a variety of transactions. Another hot area is cybersecurity. Somewhere along the way, the term fintech emerged.
The danger and opportunity with FinTech in Delaware largely come from a financial services industry with a smaller number of players.
So far, the heft of bankslike JPMorgan Chase and Capital One has been an advantage for Delaware as companies operate technology hubs and centers. M&T recently joined the party with plans to expand its fintech presence in Wilmington.
Taylor says northern Delaware has a variety of fintech employers that include online-personal and business loan specialists, as well as a strong presence in student loans.
Delaware also has a number of fintech start-ups capable of becoming larger.
The big challenge here and elsewhere, according to Taylor, comes in a shortage of technology workers who can “code” or otherwise perform the backend work.
So far, the Delaware workforce and fast-track coding programs, like Zip Code, are making a difference, but in coming years the nation faces a potential shortfall of 1 million STEM (science, technology, engineering, math) jobs.
Long term, “continued coordination, innovation, and investment by a range of private and public sector stakeholders—including incumbent and early-stage firms, the wider business community, state and local government, nonprofit intermediaries, universities, and workforce training programs—will be critical to position the state as a fintech leader in the coming years,” the report stated.
Enjoy your Monday and the more comfortable temperatures.
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