Banking on Ohio as a Fintech Leader
Ohio’s financial services industry reaches people all around the world. The state is home to the fifth largest financial services sector in the country with Fortune 500 and Fortune 1000 companies like Huntington, KeyBank, Fifth Third Bank, Progressive and Nationwide, as well as major operational centers for JPMorgan Chase and State Farm. There’s also a burgeoning fintech and insurtech startup ecosystem that has incubated disrupters to the likes of CoverMyMeds. When you combine these resources with some of the nation’s top tech talent, it’s clear that there’s something cooking in the Buckeye state. This unique equation – coupled with significant statewide investments, collaborative partnerships and operational expenses at half the cost of states such as New York and California –has created a formula for Ohio’s financial services companies to lead the way in technological advancements and applications.
In August 2018, Ohio adopted legislation recognizing the use of blockchain technology to save and secure electronic records in an array of industries. This achievement emphasizes the importance of having informed policymakers who understand the opportunities and community benefits that new, cutting-edge technologies can provide.
Ohio-based SafeChain has now set the tone for practical application of the technology with its SafeWire product, which helps real estate companies close deals faster while decreasing fraudulent liabilities faced by title-service professionals. Now, the technology that was most commonly discussed as the driver behind bitcoin just 18 months ago has a real and practical application that’s being used to solve a $400 million fraud problem in the real estate industry. The Columbus-based startup also recently performed its first title transaction with the Columbus auditor’s office using blockchain. The process was complete in just 30 seconds.
Blockchain is also one of the key focus areas for JPMorgan Chase’s finlab, an innovative fintech collaboration effort supported by Jobs Ohio and Otterbein University.
The potential for blockchain to improve much-needed security, cut down on current manual processes, and give customers more control and visibility into how transactions are completed is tremendous. Many financial firms across the state have expanded their investment portfolios to include blockchain-based companies and are investing in research to explore blockchain, while others are putting internal teams and partnerships in place to investigate and implement the technology.
Artificial Intelligence and Machine Learning
Technologies like artificial intelligence and machine learning are also having a significant impact on the banking and insurance industries in Ohio. And though the fundamentals of artificial intelligence have been around for years, the implementation of the technology is just starting to accelerate, benefited by the advances in cloud computing and data process efficiencies.
Upstart Network Inc., a Silicon Valley-based company that created the first lending platform leveraging artificial intelligence and machine learning to price credit and to automate the borrowing process, recently chose Columbus for its new research and development center. The new centerwill help Upstart establish more of a national footprint and also benefit from Ohio’s skilled technology workforce at half of the Silicon Valley costs.
Innovation Labs and Partnerships
It’s not just the startups that are innovating. Traditional companies of all sizes are recognizing the need for industry advancing technologies that allow them to offer better products, services and experiences for customers. As a result, innovation labs and unique partnerships are emerging across Ohio and being utilized to rethink business operations, improve efficiencies, and identify emerging needs and opportunities with customers.
In 2017, Fifth Third Bank added a new innovation lab to its offices in Cincinnati that redefines what it’s like to work in the financial services industry and in a traditional office setting. And in September 2018, JPMorgan Chase inked a unique partnership with Otterbein University and Jobs Ohio to establish a finlab research and development center on the school’s campus. There, employees in a variety of disciplines work directly with students to think outside the box and develop real-world solutions to challenges.
BMW Financial Services, headquartered in Hilliard, Ohio, recently launched a Collaboration Lab, partnering with the UK-based innovation firm L Marks. The nation’s eighth largest auto insurer, Nationwide, announced plans in 2018 to build a 31,000-square-foot innovation center in the heart of Columbus, where it will work to develop new ways to help members protect themselves and plan for a financially secure future.
Financial Services and Tech Talent
The continued growth of Ohio’s financial services sector requires a highly skilled workforce. With 220,000 Ohioans working in the industry, Ohio’s banking and insurance leaders and growing startups have tapped into the state’s roster of highly acclaimed colleges and universities that produce nearly 45,000 financial services graduates each year.
Continuing to prime this pipeline of talent and to harness the potential of our future workers will be the key to sustaining the growth and change happening in the industry. More and more companies are strategically partnering with Ohio’s learning institutions to navigate the landscape of innovation and change.
Ohio’s business-friendly climate provides an optimal environment for financial services businesses large and small to thrive. As I travel domestically and abroad, I’m honored to hear from people about the exciting momentum Ohio’s companies are achieving.
Ohio has all the ingredients to become the tech location of choice for financial services in the U.S., similar to how Ireland is for Europe. The existing financial services ecosystem, business-savvy regulators, cost-efficient operational expenses and the abundant millennial talent are all in place here to welcome those interested in a soft landing and strong growth in Ohio.