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State, university and partnering leaders cut the ribbon on the FinTech Innovation Hub on the University of Delaware's STAR Campus on Wednesday, Oct. 4. | DBT PHOTO BY JACOB OWENS[/caption]
NEWARK – For decades, Delaware has been at the forefront of advancements in financial and credit services after being home to major operations by national and international banks.
With the official opening Wednesday of the FinTech Innovation Hub on the University of Delaware’s STAR Campus, the state aims to be at the forefront for decades longer.
The $36 million, 100,000-square-foot building in Newark is a partnership between UD, Discover Bank and the Delaware Technology Park, a nonprofit incubator that has operated in the college city for decades as well. It’s among the first centers of its kind at a university nationwide.
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Mike Bowman, president of the Delaware Technology Park, said the public-private partnership at the center was essential to its success. | DBT PHOTO BY JACOB OWENS[/caption]
“[This partnership] was aligned around a common vision and mission to bring societal inequities and access to financial technologies crucial to living a healthy life. The FinTech Innovation Hub represents the next phase in leadership for financial services for the state,” said Mike Bowman, president of the DTP.
While Delaware banks like MBNA and Wilmington Trust grew here in brick-and-mortar heydays of the 1980s and 1990s, today’s banks like JPMorgan Chase, M&T Bank, WSFS Bank, Barclays, Capital One, Discover and more are operating at a time when more than half of all consumers manage their finances from their phones, according to a 2021 Federal Deposit Insurance Corp. survey.
That’s led to the rise in financial services technology, or fintech, which includes data aggregation and analysis, user experience design and cybersecurity, and more.
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Rudi Eigenman, a co-director of research for the University of Delaware at the FinTech Innovation Hub, said he expects AI to be a big part of the future of fintech. | DBT PHOTO BY JACOB OWENS[/caption]
Rudi Eigenman, a professor of electrical and computer engineering who will co-lead the university’s programs at the hub with economics professor Carlos Asarta, said financial services, like most industries today, has embraced technology and data as tries to improve outcomes.
One of the key challenges his research focuses on is developing algorithms that can complete complicated or time-intensive tasks quickly, often crunching millions of data points in seconds. Doing so requires sophisticated supercomputers that students will also have to become familiar with.
“Artificial intelligence was created many, many years ago, but what has suddenly changed to make it feasible is really high-performance computing and lots of available data … That's why we're seeing these successes lately,” he explained.
With the rise of AI technology, banks and credit firms are increasingly turning to it for use in fraud detection and other predictive modeling, Eigenman said. He expects that the research into AI use in fintech will only grow in the coming years.
UD President Dennis Assanis emphasized that the work being done at the FinTech Innovation Hub was truly important because of the impact it could make.
Almost 6 million households in the United States have no checking or no savings account at any bank or credit union, according to FDIC, with the majority of those unbanked households coming from low-income families, minority families, single-parent families, or families with disabilities.
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UD President Dennis Assanis noted that the work of the FinTech Innovation Hub will have greater impacts for disadvantaged households. | DBT PHOTO BY JACOB OWENS[/caption]
“Because they don't have bank accounts, they're more likely to pay high fees for check cashing services, payday loans or prepaid cards, and they have trouble getting loans or insurance coverage that's affordable. All of that perpetuates the cycle of poverty and death, but we can help fix that,” Assanis said. “We can develop innovative fintech solutions to help those families get the affordable financial services that they deserve. It's a huge challenge, but it's one that we're going to tackle right here in this building.”
Much of that work will be undertaken at the FinTech Center for Accelerating Financial Equity (CAFE), a new nonprofit incubator and accelerator program that will open next year. Backed by a $1 million federal earmark and the support of the DTP, the FinTech CAFÉ will support about 10 fintech startups building products that assist underserved populations.
Accepted incubator applicants will be provided office space and tech resources to grow, while accelerator participants would be more established and gain access to community banking partners who could help adopt their products and grow market share.
“Community banks don’t have the same talent or money as the big banks, but they have a big consortium and, in that way, we hope they can help support this in a sustainable way,” Bowman previously told Delaware Business Times.
The Venture Center in Little Rock, Ark., was used as a model for the new center. Developed by Delawarean Wayne Miller, that center has become a leading national incubator in the fintech industry, and Miller, who has returned to the First State, has agreed to serve as a strategic advisor on the project.
The center has been open to tenants for more than a year now, but is now reaching nearly full capacity, including two floors of interdisciplinary space for UD students and faculty. Already at home in the building is Tech Impact’s Data Innovation Lab, a contracting data analysis lab that is already working on health care issues for the state among other issues, and Kendal Corp., a developer of senior living communities, which hopes to partner more closely with UD students and grads.
Also located in the building is Innovative Precision Health, a data analytics startup that aims to improve health care outcomes for clinics. Founded in 2020 by local biotech executive Chai Gadde, the six-person firm contracts with medical practices and health systems to collect non-laboratory metrics.
Starting with neurology, IPH studies cognitive tests, gait tracking, and MRI scans to look for signs of early onset dementia, multiple sclerosis, Parkinson's disease, and more.
“We believe that as you collect more and more data of different types, and then use AI to understand trends of that data, you can help identify important patient outcomes,” said Neil Mathur, director of implementation for IPH. “We help fill that role of understanding the information that doctors collect from a more data-driven perspective.”
Before cutting the ribbon Wednesday, Gov. John Carney applauded the partnership that made the center possible, noting that its symbolic for the First State’s changing economy: More people now work at the university’s Science, Technology and Advanced Research campus than at the height of the former Chrysler auto plant that once powered the city’s economy.
The FinTech Innovation Hub marks only the latest project to open on the 272-acre campus though, as the National Institute for Innovation in Manufacturing Biopharmaceuticals is beginning preparations for the Securing American Bio-Manufacturing Research and Education (SABRE) Center on a parcel neighboring the fintech building.
Meanwhile, plans by Buccini/Pollin Group are still progressing toward building the campus’s first residential units at the front of the property along South College Avenue, according to officials.
