The term “fintech” covers a group of start-ups, often funded by venture capital investors, that aim to apply new technology in areas like online lending, investing and payments. These start-ups have surged in popularity among investors as banks have had to focus on complying with regulations and rebuilding capital.
The FinTech Innovation Lab is a so-called accelerator that annually gives a half-dozen start-ups the chance to interact with top financial firms, hone their products and learn how they can fit into what Accenture, a management consultant, estimated was a $270 billion technology budget for banks worldwide.
Tim Estes, the president of Digital Reasoning in Nashville, which uses artificial intelligence to spot compliance and reputational risks for banks in routine employee emails, said that going through the lab program in 2012 was “transformative for the company, opening up doors across Wall Street as advertised.”
As Digital Reasoning won business from Wall Street, it opened a New York office near Union Square, which now has about 30 employees and is the firm’s second-largest office. Goldman Sachs and Credit Suisse Group have become investors.
Mr. Estes said Goldman was an early customer, two years after the investment bank’s chief executive was attacked in televised congressional hearings over a subprime debt sale that one Goldman staff member had described in an email as a bad deal. As firms like Goldman realized other such “time bombs” might be in their email files, “everyone wanted a better bomb detector,” Mr. Estes said.
Another start-up that won business through the lab, in 2012, was True Office, which turns compliance training into a game experience for employees. Adam Sodowick, the chief executive of True Office, had first met Maria Gotsch, a lab co-founder, at a dinner event at a Flatiron district loft. Morgan Stanley signed as a client and invested in True Office, which eventually moved its headquarters from Boston to New York and was acquired in 2014 by the New York Stock Exchange. The exchange resold it this year.
The best-known firm to go through the program, in 2015, was the blockchain start-up Digital Asset, shortly after it recruited Blythe Masters, a former JPMorgan Chase derivatives pioneer, as its chief executive. Accenture soon invested in the company, which aims to improve Wall Street trade processing.
The New York lab is one of hundreds of incubators and…