Post by Vanessa Jozwiak, Small Business & Entrepreneurship Manager, Loudoun County, Va Department of Economic Development
Bitcoin, Crowdfunding, Blockchain, Smart Beta are a few of the buzz words you may have encountered. These are all terms surrounding the financial technology sector, better known as fintech. Fintech can be easily explained as a technology that helps provide a financial service. This simple definition covers a lot of platforms – from crowdfunding to risk assessment. Depending on your geography, you may have avoided the buzz, but that may soon change.
In the U.S. both San Francisco and New York have been hubs for startup businesses in financial services. These hubs have historically been fueled by access to equity lending and proximity to leading financial markets. Over the past several years the technology is rapidly advancing and disrupting the traditional financial sector; thus, enhancing regulatory scrutiny in this emerging market. For this reason, there are benefits for a fintech firm to have a presence near Washington, DC to remain engaged in the policies that impact their business.
In the first half of 2016, some of the major bodies governing the U.S. economic sector have taken actions that demonstrate a pro-innovation stance. For example:
- May 2016- The SEC Regulation Crowdfunding adoption is enacted which allows for the sales of securities through crowdfunding under a new section of the Securities Act of 1933
- April 2016- FDIC reduces heightened supervisory monitoring for de novo institutions from seven to three years; a potential signal of relaxing regulation for new banking institutes.
- May 2016- The OCC released a white paper in support of “responsible innovation”. Responsible innovation is defined as, “The use of new or improved financial products, services, and processes to meet the evolving needs of consumers, businesses, and communities in a manner that is consistent with sound risk management and is aligned with the bank’s overall business strategy” â´.
If you’re still curious about the fintech industry then connect with fellow chamber members such as Ignite Payments, Paychex, or BDO to talk about how technology is impacting their service offerings.
At Loudoun Economic Development, your business is our business. We want to make sure Loudoun companies are successful, and if your company isn’t in Loudoun already, we’d like to discuss how moving here can contribute to your success. Start by calling us today 1-(800)-LOUDOUN
- FDIC votes to reduce special monitoring of new banks. (2016, April 06). Coastal Empire News Staff Report.
- Office of the Comptroller of the Currency. (2016). Supporting Responsible Innovation in. Washington, D.C.
- Regulation Crowdfunding: A Small Entity Compliance Guide for Issuers. (2016, May 13). Retrieved from U.S. Securities and Exchange Commission: https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm#_ftn3
- Franca Harris Gutierrez, D. B. (2016). Fintech Regulation: Recent Developments And Innovations. New York: WilmerHale. Retrieved from https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/2016-05-10-Fintech-Regulation-Recent-Developments-And-Innovations.pdf