Collaboration is key to building momentum for the growing industry in southwest Ohio
Financial technology is a broad term. It encompasses just about anything involving finances, which touches any number of industries. But for entrepreneurs in Cincinnati, home to financial institutions like U.S. Bank and Fifth Third, that broad industry provides a world of opportunities. Over the last few years, Cincinnati has become a hotbed of FinTech innovation, leading to a number of startups creating a new generation of exciting FinTech businesses set to work in tandem with the existing names we all know.
“Fintech is the digitization of financial services, whether it’s insurance, banking, payments or how you manage your money,” said Mark Wood, strategic innovation manager at Cintrifuse. “Doing that from your phone or computer is the future of finance. You don’t have to walk into an office or bank branch, you can do it from your fingertips. That’s what FinTech is powering. And FinTech is really for anyone. It sounds complicated, but it’s bringing financial services into the palm of your hand, which impacts everyone, not just businesses.”
Cintrifuse CEO Pete Blackshaw is a major supporter of Cincinnati’s FinTech future. Before joining Cintrifuse, Blackshaw was global head of digital marketing and social media for Nestlé and executive vice president of strategic digital services for Nielson. With that context in mind, he said there are some “big, big opportunities” for Cincinnati to become known as a FinTech hub, and said he’s excited about some of the startups Cintrifuse is working with.
“I’m really bullish about FinTech in Cincinnati,” he said. “We have some of the world’s leading insurance companies and banks like Fifth Third and First Financial, so you have an obvious talent and customer base. Now those industries are being disrupted and there’s a really unique opportunity to nurture startups in that space. Cincinnati has always been called the consumer capital of the world, and the FinTech startups that are really nailing it right now are brilliant at customer service interfaces and making life easy. So i think those existing strengths combined with customer expertise makes for a really potent recipe here.”
FinTech success in Cincinnati isn’t just a theory, it’s being put into practice by a variety of startups — Pay Theory, Coterie, Finix, Luma Financial and Payload, to name a few. Luma, a spinout of Cincinnati’s Navian Capital, has ridden the FinTech wave to investment from Bank of America and Morgan Stanley, and is rapidly growing in southwest Ohio. Chief Technology Officer Adam Hutcheson said the city’s talent and exciting partnership opportunities make Cincinnati the ideal home.
“There’s a ton of opportunity in the Cincinnati area, especially in FinTech, retail tech and health care tech going on today,” said Hutcheson. “For example, we’ve hired about 45 people into the engineering department in the last 18 months, the majority of them being right here in Cincy. Look at the economies of the very large companies that are here in the area. We’ve had very little concern with attracting and finding talent with the skill sets that are needed to grow a company like Luma. From a people perspective, from a community perspective, I think we’re well beyond the idea of having to be on the East or West Coast in order to build a great software company. In Cincinnati, we have the schools, we have the people, we’ve got the entrepreneurs that are starting companies.”
To capitalize on the FinTech momentum and nurture the next generation of these startups, Cintrifuse launched FinTech Frontier, a program headed by Wood that partners existing industry leaders with the up-and-coming entrepreneurs in the space. They host networking events, pitch competitions and help network among those involved, and Wood said the success of the program is a great indication of the industry’s strength.
“FinTech Frontier was born out of the passion of some of our corporate partners, who really saw an area where Cincinnati could be a leader,” said Wood. “It started with a webinar series on trends, where FinTech was headed and how it democratizes finance. We had a tremendous response locally and beyond Ohio and turned that into a pitch competition. We expected to have maybe 20 or 25 applicants nationally and were shocked to have more than 50 applications in just four weeks, 15 of those within Cincinnati. If you had asked me how many were operating in Cincinnati, I would have guessed five or six. It really gave us validation that there was something there.”
Finix co-founder Sean Donovan grew up in Cincinnati and moved back from Denver to launch the company. He said it was a “no-brainer” to establish a headquarters in Cincinnati, and credited the collaboration between the State of Ohio, Cincinnati resources, large businesses and small startups with creating the environment that’s allowing FinTech to thrive.
“A lot of startup ecosystem builders want to build the next “Silicon Something,” but asking a city or region to become Silicon Valley with more affordable housing is misguided. You need to look at what each city uniquely has to offer. One of Cincinnati’s best assets is the incredible number of major companies with headquarters here — Macy’s, Kroger, P&G, 5/3 Bank, American Financial Group, Western & Southern. There is a real theme of collaboration between the big companies and the local startups. The launch of Fintech Frontier is just another sign of the current momentum. Identifying that, state and local governments and organizations like Cintrifuse have intentionally incentivized collaboration. If you’re looking to take advantage of the business scene and talent that’s sprung up around these huge companies, there’s a real advantage to starting your company in Cincinnati.”