FinTech is fast rising and positively changing the financial services landscape.
Why FinTech (Financial technology)?
FinTech (Financial technology) is used to characterize new tech that seeks to enhance and automate the delivery and use of financial services.
In other words, fintech means leveraging technology to deliver financial services in new and creative ways.
Fintech is important because it will redefine the way we do business and reshape the future of money. And at its core, fintech is utilized to help corporations, business owners, and consumers better manage their financial operations by utilizing software that is used on computers and smartphones. In other words, every business can use fintech for their services and enhance their work.
In addition to being a destination location for formal banking, and home to brand power that includes Capital One, JPMorgan Chase, M&T Bank, and Citibank, Delaware is becoming the location of choice for financial and business services. With a skilled workforce, low taxes, and competitive incentives, Delaware has become a destination for Fintech, software, and blockchain firms.
In addition to this, the state is moving towards becoming a national leader in fintech and one of the rationales driving the fintech industry in Delaware is the Financial Management Act of 1981.
Delaware’s position in the global fintech landscape
In recognition of the current transformation of the financial services sector, and to get a better insight into Delaware’s position within the national and global fintech landscape, “Delaware in a Fintech Future”, a report researched and authored by the Delaware Prosperity Partnership (DPP), First State Fintech Lab (FSFL) and the University of Delaware’s Institute for Public Administration (IPA), was released. This report documented the latest improvements and technological innovation in financial services, in Delaware.
Some of the major highlights of the report from FSFL, IPA, and DPP are the following:
- Delaware has now become one of the top regions for global fintech companies.
- Delaware accounted for at least nearly 75% of all fintech investment in the Philadelphia region.
- Delaware also has the highest comparable concentration of financial services jobs of any U.S. state, and this is due to the high number of companies opting to incorporate Delaware in the fintech sector.
- In the year between 2009 and 2018, almost 199 fintech patents were allocated to several Delaware-based companies, entrepreneurs, and individuals, and this makes Delaware rank quite high on several measures of innovation in this industry.
- Nearly one-fifth of Delaware’s GDP is moved by finance, and this makes it the largest contribution by any single sector.
In essence, Delaware has been appealing for out-of-state direct investment by financial services corporations and its rapidly changing regulatory landscape offers tech startups an advantage for developing innovative financial solutions.
Why do tech startups choose Delaware?
The fintech industry in Delaware is developing rapidly, and this is due to the availability of multiple opportunities, a robust innovation platform, and the advantages outlined below:
- Favorable tax regime: Delaware has one of the most beneficial taxation for startups, e.g, there is no corporate tax on interest or any investment income in Delaware, also new businesses in Delaware fintech industry are not obliged to file use tax, or inventory tax..
- Delaware pro-business laws: globally, Delaware’s business law court system is one of the most reputable and respected, and its primary aim is to provide investors and businesses with laws that are optimal for engaging in an ethical and profitable business.
- Easy company formation process: Delaware tech startups can form a corporation, limited liability company, and sole proprietorship among others, and whatever form is chosen, the company formation process is easy and efficient.
- Popularity in the business world: Delaware is recognized throughout the business world as a destination for companies to incorporate, thanks to its deep bench of law firms, its expertise in innovative technologies, and corporate services providers that are located there.
Additionally, more and more venture capitalists and angel investors are contributing to the Delaware tech startup world and that is likely going to change the future business landscape of Delaware.
Are you planning to start a business in the fintech industry or would you’d like to learn more about fintech in Delaware or any other jurisdictions? – Let’s go ahead and contact your Damalion expert now.