The number of financial technology companies is on a rise, and every year many of these new companies as well as established ones choose to situate themselves in cities that are not San Francisco or New York. In some cases, the establishment of one powerful player in a region automatically turns a place into a hub, but other times a community effort, perhaps backed by government initiatives or new regulation, can serve as an impetus for companies to set up shop in a particular location.
Each year Bank Innovation highlights five such emerging fintech hubs. Typically, the list contains cities within the U.S., but this year’s list includes two cities from neighboring countries that have seen a notable rise in fintech activity in the past the year. The list is presented in alphabetic order.
Home to the likes of Bank of America and containing major offices from several other large banks, Charlotte, North Carolina has attracted plenty of fintech talent to its neighborhood. According to a report, the city has seen a 28% increase in technology jobs in the last five years.
The city already has major fintech players like online marketplace LendingTree, automated bill solutions provider AvidXChange, home lending platform Movement Mortgage, mobile payment companies like Passport and Payzer, and the list goes on.
The presence of Queen City Fintech, an accelerator program whose alumni include companies like Redipay, Thrive and Dyme, adds to the city’s cachet as a welcoming fintech community.
With a significantly lower cost of living compared with New York City and Silicon Valley, Charlotte could be poised to become a major fintech hub.
Southeast Fintech Venture Conference is taking place in the city at presstime.
Mexico City, Mexico
After more than a year, Mexico’s widely talked about Fintech Law went live this September. The law aims to regulate fintechs in crowdfunding, online payments, and cryptocurrency, among other areas, including money laundering, cybersecurity, and fraud issues, as well as open banking and data sharing between FIs and fintech through APIs. The law was originally presented by President Enrique Pena Nieto in March.
But even before this law, Mexico City enjoyed a robust ecosystem for fintech. It’s already home to fintechs like Bankaool, a challenger bank offering an annual interest rate of 3.75%; Conekta, an AI-powered platform develops that helps FIs in Latin America detect and prevent fraud; as well as CLIP, a Square Cash-like company that allows merchants to turn their phones and tablets into POS terminals.
The new Fintech Law will only make it easier for such fintechs to operate along with protecting the consumer. Not to mention, the regulated environment will encourage fintech and FIs around the world to interact with those in the country.
“It really opens up the gate,” Daniel Canning, commercial director for North America at WorldRemit, told Bank Innovation. “This law adds legitimacy to the many innovative fintechs that are in the country. It’s great news for the [fintech] community in Mexico. Expect to see a lot more activity not just within the country, but from other players who now have the regulated environment to interact with those in Mexico. This is a big deal for WorldRemit’s expansion in Mexico as it is for the other fintechs in the region overall.”
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