Financial technology (Fintech) is chock-full of specialized algorithms that are not easily understood. But the objective of fintech could not be simpler – technology to improve the delivery and use of financial services. Applying for a mortgage, investing, taking out a car loan, or purchasing a cryptocurrency, fintech advancements make these transactions easy and highly accessible to hundreds of millions worldwide.
While the Bay Area and New York are still US fintech hubs, a surprising newcomer is attempting to grab some of their market share. Salt Lake City, Utah is best known as an outdoor paradise. Some of the best skiing North America has to offer coupled with national parks and hiking and biking, Salt Lake City has always attracted the sporty adventurer types. Yet, a new education center funded through the University of Utah is seeking to put the western outpost on the fintech map.
The Stena Center for Financial Technology offers fintech courses and will eventually serve as an incubator for university students and alumni alike seeking to establish fintechs of their own. The Stena Center obtained seed capital from Steve and Jana Smith of the Stena Foundation. Before the foundation, Steve was a co-founder of Finicity, an open-banking platform that was later acquired by Mastercard. Smith noticed during his time at Finicity that employees were well-versed in product development, financial regulation, and software engineering, but few commanded expertise in multiple areas. This is a critical trait when thinking about future products and services and one Smith seeks to foster in this novel fintech incubator.
Meanwhile, Salt Lake City is thrilled with the proposition. Mayor Erin Mendenhall had coined the city “Tech Lake City” and land-use laws are now favorable for research-and-development and lab-space centers to operate. One of the first firms to take advantage of Tech Lake City was Denali Therapeutics, a biotech firm focusing on neurodegenerative medicines. Perfect Day is another biotech company working on the development of animal-free proteins. Biotech was an initial entry, and now the focus is on complementing it with fintech.
Perhaps most interesting is the city has also made it easier for lenders to operate, thus fueling the creation of a fintech culture. Celtic Bank and WebBank are active lenders as are a host of industrial loan companies. Fintech-friendly banks provide nascent fintechs with a wider variety of options to scale. Moreover, state tax incentives give companies that expand operations or relocate a refundable tax credit rebate of up to 50% of new revenues over a pre-defined period.
As of mid-2022 tech and finance employed 180,000+ people in Utah. This is up 18% compared to five years ago. Salt Lake City was already a cheaper city than regional financial centers like Charlotte or Atlanta. By tapping into the state’s universities Salt Lake now has a talent pool and the foundations in place to become a serious fintech hub moving forward.