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Atlanta Boldly Claims Global FinTech Lead Status
By Tom Groenfeldt
New York and London may be global financial services leaders, but Atlanta is the unsung — so far — leader in financial technology, fintech.
“Over a period of time when no one was paying attention, this crazy thing was happening. Metro Atlanta, and Georgia in total, has become the fintech capital of the world,” said Barry McCarthy, executive vice president and head of network and security solutions at First Data and chair of FinTech Atlanta. The nonprofit organization was formed in 2015 to develop Atlanta as the recognized global capital of the FinTech industry.
“Through the FinTech Atlanta initiative, I am confident Atlanta will become the recognized global home of FinTech by 2020, just as New York and London are the recognized headquarters of finance.”
He’s not talking about retail banks, investment banks or venture capital firms — those are financial institutions — but fintech companies.
“There are more fintech companies here than anywhere in the world.”
Certainly the city has a lot of big players, especially in payments. McCarthy estimates that 70 percent of all transactions on a global scale pass through companies headquartered in metro Atlanta. City promoters have dubbed it Transaction Alley in reference to payment processing leaders like First Data, WorldPay, Global Payments and TSYS. They’re a reason that Georgia ranks third in number of people attending Money2020, behind California and New York, despite having a much smaller population.
Although the two general purpose fintech giants, FIS and Fiserv, aren’t headquartered in Atlanta, they have large offices there. The Alliance also includes non financial players who have large IT operations, such as AT&T Mobile, The Home Depot, Coca Cola and UPS.
“They’re making internal investments in fintech and developing customer solutions for their environment,” said McCarthy. “They understand the importance of fintech in their own businesses and consider themselves a part of the fintech ecosystem.”
The fintech companies range from long-established players such as First Data, Global Payment and NCR to aggressive newcomers like Kabbage, which specializes in small business lending, BitPay, a leader in bitcoin payments; Acculynk, a payments solutions provider; and Groundfloor, a real estate crowd-funding company.
“There are over 100 fintech firms headquartered here,” McCarthy said.
FinTech Atlanta was formed to promote Atlanta globally as a fintech leader, work with the state to make Georgia friendly to fintech, work with universities to educate fintech talent and encourage more venture capital, a weak spot in the city’s effort to grow its fintech business. Kabbage, for example, had to go to the West Coast to find financing. One tech veteran told a local publication that the banks don’t have people who understand technology — they are oriented to real estate lending, One advantage — state law makes it relatively easy for a new company to sell shares to family and friends.
The University of Georgia has recently approved a business degree with a focus on fintech he said, and students have a wide choice of university programs and certification programs that can help them get fintech jobs. More skilled people are needed — for every fintech job in the metro Atlanta areas there are another 3 or 4 positions open, he said.
Atlanta is promoting itself to the UK and the City in particular, and to the Republic of Ireland and Israel, he added.
He noted that a UK company, truRating, recently chose Atlanta for its North American headquarters and its CEO, Georgina Nelson, has relocated there, in part to be close to payments companies. TruRating offers a way for consumers to rate a company from 0 to 9 when they make a purchase. Nelson says that less than 1% of consumers rate companies they buy from. By coupling the rating with a transaction, truRating ensures that the person providing a review is a real customer.
The company’s ranks in the UK area about evenly divided between men and women, but in the US so far only 1 in 55 applicants has been female, Nelson said.
Atlanta offers a pleasant climate, reasonable cost of living, and the world’s busiest airport which has direct links to cities around the world and places 80 percent of the US population within two hour flight.
George Tech’s Advanced Technology Development Center (ATDC), founded in 1981, is a startup incubator that works with 325 companies a year and says that more than 90 percent of its graduates are successful five years after completing the program.
This story can be viewed on its original web page, Forbes.com, here.