“Fintech,” as a term, “is relatively new, but a closer look suggests that all financial services companies are becoming fintech companies, including the well-established incumbents as well as early-stage startups,” according to John Taylor, Director of Economic Research at the Delaware Prosperity Partnership. In fact, “some are referring to fintech as a standalone new industry.”
To get a better understanding of Delaware’s position within the broader national and global fintech landscape and provide the basis for all ongoing conversations about Delaware’s fintech future, Delaware Prosperity Partnership, the First State Fintech Lab (FSFL), and the University of Delaware’s Institute for Public Administration (IPA) have produced a detailed report – Delaware in a Fintech Future
FSFL is a nonprofit dedicated to nurturing and growing the financial technology ecosystem in Delaware by convening and collaborating across industries, disciplines, and demographics.
IPA at the University of Delaware is a research and public service center that addresses the policy, planning, and management needs of its partners through the integration of applied research, professional development, and the education of tomorrow’s leaders.
Below are the findings of the report from FSFL, IPA and DPP:
- Global investment in fintech related companies rose from $18.9 billion in 2013 to $111.8 billion in 2018.
- Delaware accounts for around 75% of all fintech investment in the Philadelphia region. Amounting to around $50 million, this figure, in all probability, does not capture the significant equity investments in fast-growth Delaware firms like Marlette Funding and Fair Square Financial.
- Although Delaware does not have many locally based venture firms, the First State’s leading banks could provide a competitive advantage given that corporate venture arms accounted for $4.4 billion in fintech investment in the United States in 2018.
- Between 2009 and 2018, 199 fintech patents were assigned to Delaware-based individuals and companies, ranking first in the United States on a per capita basis.
- Delaware has the highest relative concentration of financial services jobs of any U. S. state.
- The financial services sector accounts for 9 percent of all jobs in Delaware, a figure nearly twice the U.S. average.
- The First State also ranks highly in its concentration of technology workers, ranking seventh in the United States, just ahead of California.
- Wilmington, the hub of Delaware’s financial services industry, accounts for nearly 170,000 financial services workers and more than 100,000 technology workers across the metropolitan labor market.
- In Delaware, financial services firms with at least 250 employees accounted for 91 percent of statewide financial services employment in 2017, up from 88 percent in 2007
- Financial services firms operating for at least 10 years accounted for 93 percent of Delaware’s financial services employment, up from 88 percent in 2007.
- Among the 20 financial services firms with the most job openings in 2018, tech positions like software developers, computer systems engineers, information security analysts and more, accounted for nearly one in five openings at those firms, equating to approximately 2,500 openings.
Delaware is home to a wide range of targeted education and training initiatives, from K–12 programs like Delaware Pathways to a range of postsecondary offerings. It was observed that:
- The number of graduates across tech-related programs at the University of Delaware increased by approximately 30 percent since 2015
- Local institutions are working to grow their offerings and enrollments, with potential growth in the CS+X model, pairing computer science with another major, as well as in noncredit offerings where individuals can obtain discrete training and credentials.
Governments around the country and world are exploring a range of options to encourage fintech investment. More than 40 nations have pursued initiatives to support financial services innovation, from creating new offices designed to interface with fintech companies, to regulatory adjustments, to direct national investments in companies. The CFPB and the CFTC are offering aggressive proposals to modernize regulatory structures for the sector.
Public, Private, and University Investments
To support the fintech industry with the required talent, the public sector, private sector and higher education institutions are entering into creative collaborations. For instance, to meet Amazon’s HQ2 needs, the State of Virginia, Virginia Tech, and a range of additional public and private partners collaborated to create the Virginia Tech Innovation Campus.