ChicagoNEXT’s Mark Tebbe writes on the growing fintech industry
Since its founding, Chicago has been the home to startup and modest financial institutions which have grown into global corporations.
With names such as the Chicago Board Options Exchange, Chicago Mercantile Exchange, Citadel, Discover, DRW Trading, JPMorgan Chase, Morningstar and Northern Trust, these financial titans lead this industry as some of the most respected firms in the world.
With changes in technology and our society, we are again entering a period of transformation through financial technology innovation, dubbed fintech. These new technologies range from lending, personal finance, payment, retail investment, institutional investment, equity financing, remittances, consumer banking, financial research and banking infrastructure.
Fintech is the new frontier of innovation led by both startups and large financial institutions. In 2016 alone, twenty Chicago fintech startups saw a combined $450 million in investment from venture capitalists – more investment than other sectors such as B2B, consumer and healthtech. It is this combination of venture capital investment and startup diversity that has again positioned Chicago as the emerging leader in fintech. To this point, Deloitte’s recently released fintech report identified Chicago as one of the top five cities in the world for fintech development.
Guidance and oversight for fintech
Policymakers have also taken notice. Illinois’ Department of Financial and Professional Regulation (IFPR) hosted two fintech roundtables to discuss regulatory challenges and opportunities for our fintech sector to flourish. In November 2016, IDFPR announced the Illinois Blockchain Initiative to integrate blockchain, a digital ledgar technology, into government operations.
To help accelerate the development of our fintech efforts, ChicagoNEXT has established a Fintech Council, a team of finance and tech leaders focused on growth strategies and collaboration to empower fintech entrepreneurs and their startups. Since the creation of this council, we have been working to support the various initiatives in this industry.
We have been collaborating with FinTEx Chicago, a member-driven organization which announced their intention to open “Currency,” a center of excellence, in spring 2017. We also have been active supporters of initiatives like FinTank, a 20,000-square-foot innovation space dedicated to fintech startups that opened earlier this year, joining existing initiatives such as 1871’s Chicago Bitcoin Center and additional programming being developed by the Illinois Technology Association and our top universities.
Benefitting the community
While many efforts are underway to develop and invest in Chicago’s fintech efforts, these returns must benefit everyday Chicagoans.
For decades, public, private, and nonprofit stakeholders have worked to advance the cause of financial inclusion in Chicago. Financial inclusion and empowerment must create pathways for all Chicagoans to fully access the local economy through banking, financial services, wealth management and best practices in financial planning.
That’s why ChicagoNEXT is also working with public officials and community organizations to bridge the gap between fintech innovation and financial inclusion. By mobilizing fintech entrepreneurs, we hope their digital products can expand access to capital and education for marginalized people, places, and businesses.
With Chicago’s continued growth as a global fintech hub, ChicagoNEXT will continue working to develop the enablers for a vibrant fintech economy focused on talent, capital, and inclusivity.
This piece originally ran in the Chicago Business Journal.
Mark Tebbe is chairman of ChicagoNEXT, a public-private effort out of World Business Chicago that drives growth and opportunity in Chicago’s tech economy. He is also adjunct professor of entrepreneurship and entrepreneur-in-residence at the University of Chicago’s Booth School of Business. Tebbe’s 25 years of successful entrepreneurial experience includes the founding of two NASDAQ-listed companies, Lante Corp. and Answers Corp., as well as involvement in numerous startup and high-growth companies.