In my regular meetings with financial services and fintech firms, particularly those headquartered internationally, I often hear that they’re looking to New York or California for their expansion plans to the United States. Often, these are the only locations companies have typically heard about when it comes to the U.S., or believe only the coasts have the resources and VC funding they need.
But that perception is quickly changing, as states across the country begin to create innovation ecosystems to rival their coastal counterparts. And if financial and fintech firms of all sizes come to their location searches with an open mind, they’ll find that a vibrant mix of resources – leading companies and startups, low operational costs, available capital, and smart workforce talent – can be found in more off-the-radar locations.
As a director, financial services, for JobsOhio, I’ll use the location I know best as an example.
Consider Ohio, located in the Great Lakes region of the U.S. economy, which is an innovative state with a stable economy, low-cost energy, diverse industries and welcoming communities, all of which position domestic and international companies for success.
The state is fast becoming a global hotspot for fintech innovation and growth in North America due to its existing and well established financial and retail ecosystems. Most of my international colleagues are surprised to learn that Ohio hosts the 6th largest financial services sector in the U.S. and is home to the 5th highest number of both Fortune 500 and 1000 headquarters.
"The state is fast becoming a global hotspot for fintech innovation and growth in North America due to its existing and well established financial and retail ecosystems"
From KeyBank, JPMorgan Chase, Huntington, and Fifth Third Bank, to American Financial Group, Progressive Insurance and Nationwide, world-leading financial and insurance leaders call Ohio home. As companies locate here, they’ll have access to these leaders and services to help their businesses grow.
That ecosystem is fed in part by a financial services workforce of more than 245,000 nearly the size of New York City and more significant than the City of London, with more than 44,000 graduates each year entering the industry. Success stories include Ohio-based car insurance startup Root Insurance, which uses artificial intelligence to determine premiums and has reached unicorn status with a valuation of $3.65 billion as it continues to expand its presence in the state. Another – Upstart Network, Inc. a Silicon Valley-based company that created the first AI and machine learning lending platform – recently chose Columbus, Ohio, for its first major expansion, committing to 257 jobs, including software engineers and data scientists.
“In searching for a second home, we looked for a hotbed of incredible talent, a super high quality of life and readily available leadership that could transplant Upstart’s unique DNA to a new setting,” Dave Girouard, Upstart’s founder, and CEO, said recently. “Ohio was the right answer for us.” And I hardly need to remind outside firms that expansion is much more affordable outside traditional locations like New York City, which has 75% higher office rent than Ohio, for example.
The state is driving innovation through funding as well, with VCs and accelerators such as CincyTech, Drive Capital, JumpStart, Rev1 Ventures and others embracing fintechstartups in ways we haven’t before seen in the Midwest. JobsOhio, the economic development company for the state of Ohio is doing its part as well with a $100 million R&D Center Grant Program, which targets, among another tech, financial and insurance innovation. One of our initial grants of $2.9 million helped fund JPMorgan Chase’s financial technology innovation space at The Point, Otterbein University’s innovation center.
This is just one of more than ten innovation spaces throughout Ohio giving university students, entrepreneurs, and financial industry titans new ways to innovate and become part of a fintech ecosystem pushing the future of financial services.
As I talk to my colleagues more and more overseas, I ask them to look closely at various states for their expansion. Because what they find might not only be comparable but a more viable option than the coasts.