Thursday evening, George Vukovich revealed FinTank in Chicago. I was fortunate George let me speak for a minute or two at it and then shoved off to a HPA meeting. Financial Services are core to Chicago’s DNA.
In 1848, someone created the warehouse receipt. Grain became fungible. That allowed a futures market to be built. The Chicago Board of Trade built the foundation for the entire city of Chicago. All the railroads might have gone to St. Louis if it wasn’t for the futures market.
The money made at the CBOT was reinvested into the city. The greedy capitalists on the floor even built cultural institutions. The Art Institute wouldn’t be what it is without traders donating profits to Bertha Palmer. She took the money and went to France and built one of the greatest art collections in the world. Traders also built the Auditorium Theatre.
The CBOT lead to the creation of the CME, the CBOE, and the OCC. CME is the largest exchange in the world. Recently, the Chicago Stock Exchange was bought by investors in order to bring Chinese stocks to the US. Two of the world’s largest insurance companies are here and so are the big four accounting firms. All the major high-frequency trading firms are here, and one of the largest hedge funds, Citadel. Morningstar, headquartered here. There is an amazing amount of and depth of human capital when it comes to talent and expertise in the backbone of finance.
One of the things entrepreneurs tell me is when they hire coders and developers from Chicago, it takes them little or no time to get them up and running because most of them understand finance.
There is going to be a renaissance in back end Fin Tech and it’s not going to happen in traditional tech hubs. As a matter of fact, it’s already happening.
FinTank is going to have a lot of meetups in order to educate and support entrepreneurs. We will do what we can to support them since we think Chicago is the place to build 21st Century hard core fin tech. Not the stuff that lives on your phone and is easy. Not the stuff that you can easily describe and talk about at cocktail parties. Chicago is a great place to rebuild the connective tissue of finance.
Crain’s Chicago John Pletz recently penned an article about the airline industry. He said their tech systems resemble one giant hairball. It’s an apt description. Finance isn’t far off. Banks run on old COBOL systems and DOS. Ancient. It would be like modern newspapers using tablets to distribute information.
We all know payments are messed up and can be made a lot better. Besides consumer facing things, payments have been where the bulk of fin tech has gone. But, the real opportunity is in the back end. The guts and glue. In South side Chicagoese, “Dats wut weere good at over by here.” As I said yesterday, the state of Illinois is going to be actively supporting efforts in blockchain. Hopefully, it’s a matter of time when other government bodies get on board too (this is a big hint at the city, the county, and all the collar counties-get your asses in gear and embrace the challenge.)
Besides FinTank, Jason Heinrichs has been building FinTex Chicago for a few years now. We have worked and will continue to work closely with FinTex. They also have been educating the community about opportunities in Fin Tech and trying to connect entrepreneurs to mentors and customers. We have already started planning a couple events with him. One is scheduled to happen June 1. More on that as it develops.
At the Polsky Center in Hyde Park, they are also concentrating on supporting Fin Tech. They are integrating University of Chicago undergrads and graduate students into the ecosystem. They are exposing them to Fin Tech concepts and pain points. My partner Kenny was recently down there
I have been saying it for a couple of years now. If you are interested in finance, you need to be in the Chicago mix. All sorts of financial disciplines are melting together here. Insurance, Capital Markets, Accounting, Trading, Connectivity, Clearing, Risk Management, Back Office, Real Estate, and Banking. This is big.
When you combine all this together with a pool of talented university students, and affordable cost of living; Chicago becomes the perfect environment for innovative new businesses to grow. Add in one of the world’s busiest airports, and Chicago provides the global reach every business needs. You will also learn how to pronouce, and use giardiniera liberally.