Over the past decade, our lives have been positively impacted in almost every facet through technological innovation. Whether it is how we communicate with one another, how our food is grown and delivered, or the tremendous strides taken in developing and consuming alternative energy sources, technological innovation has paved the way for a more efficient world. Within the financial services industry, however, innovation has seemingly lagged every other major industry sector. Whether this is due to the widespread and lasting impact of the 2008 financial crisis, or the effects of an industry confined by regulation, financial services firms have not enjoyed the same innovation gold rush that has aided so many other business verticals – that is until recently.
A recent report published in March by Accenture highlighted global investment in fintech startups has significantly increased over the past several years, ballooning to $2.97 billion invested in 2013 compared to $930 million in 2008. Even more striking, over the first quarter of 2014 it was reported by the Wall Street Journal that 36 fintech companies raised an estimated $1.3 billion, according to data from Dow Jones VentureSource. For entrepreneurs looking for the next industry ripe for disruption and flush with investment capital, they need to look no further than the financial services sector.
While nearly every subsector within the $1.2 trillion industry is in need of an infusion of technology – payments, personal finance, retail investment, remittances, equity financing, institutional investment, consumer banking, banking infrastructure and financial research and data/analytics – it is in the consumer banking and retail investment segment that these start-ups are finding tremendous opportunity to drive change. Banks’ technology platforms are largely built on legacy systems that have been pieced together for years, providing innovators the opportunity to strip away inefficiencies – and most importantly for the retail banking consumer and self-directed investor, additional fee layers.
The effects of this have already impacted the consumer through the proliferation of mobile trading apps for everything from stocks to FX, investment management platforms for self-directed investors, and innovative payment modules such as Square.
And banks have noticed. In February of 2014 while speaking at JP Morgan’s investor day, Jamie Dimon remarked “When I go to Silicon Valley…they all want to eat our lunch.” Unfortunately for Dimon and his industry peers, he may soon fear Silicon Alley – the term for New York City’s booming startup tech scene – much more than Silicon Valley. According to a report prepared for the Bloomberg Technology Summit in 2013, the tech sector was found to be NYC’s 2nd largest, generating an estimated $30 billion in wages in 2012.
In fact, New York-area tech companies are now leading the country in revenue growth, capital raising and hiring, according to a report from Silicon Valley Bank. After polling tech firms nationwide the report found that New York led all respondents on planned hiring in 2014 at 82 percent, as well as firms that effectively raised capital in 2013 at 53 percent – beating the national average of 48 percent. As for their outlook towards the future, 85 percent of New York firms responded that they believed the upward trend would continue in 2014, once again beating the national average of 82 percent. For those looking to make an impact in the financial services sector, where else would you rather be than the New York Metro area?
At Scivantage, we are proud to provide opportunity for the next wave of fintech entrepreneurs by teaming up with Stevens Institute of Technology to launch the Scivantage FinTech Incubator Program, a 12-week program that empowers entrepreneurs and early-stage startups to develop dynamic and disruptive technology aimed to transform the financial services industry. We are even more proud to bring this opportunity to the New York City area, drawing upon a talent pool that we know to include some of the best and brightest minds anywhere in the world.
Through a competitive process, promising entrepreneurs will be selected to participate in the incubator program during each cycle, with each receiving:
- -An investment of up to $25,000 in seed capital
- -Premier office space in Scivantage’s Jersey City, N.J., office
- -Sales, marketing and design support
- -Mentorship from a diverse group of seasoned FinTech executives and entrepreneurs and Stevens faculty
- -The opportunity to recruit top students and alumni from Stevens Institute of Technology
We understand firsthand the challenges and rewards of being a startup firm hoping to bring change to an industry. Having launched in 2000, we now serve more than 50 leading financial institutions, continuing to drive innovation across critical areas of the front- and middle-office by automating and optimizing business critical processes to help drive sustainable competitive advantages for our clients. Through the Scivantage Incubator Program, we hope to instill the same passion, knowledge and dedication within the future leaders of our industry. If you are an entrepreneur in the New York and New Jersey area hoping to take the next step in developing your idea, we encourage you to participate in our program.
Applications for the current cycle must be submitted by 5PM EDT on July 3, 2014, and pitch day finalists will be selected on July 10, 2014. Entrepreneurs and startups with an idea that will make a positive impact on the financial services industry can apply today. Learn more about this program at www.scivantageincubator.com.