Utah Financial History Sets Stage For Growing Fintech In Silicon Slopes
Financial technology (fintech) companies play a major role in the growth of Silicon Slopes fueled by more than a century of innovation and entrepreneurship in the financial industry here in Utah.
According to Shawn Lucas, CEO of Apiary Fund and a market trading expert (disclosure: Apiary Fund is a client), many of the fintech companies today are part of a long tradition of financial firsts in the state.
“Utah’s involvement in the world of high finance developed in the late 1800’s with the formation of the Salt Lake Stock and Mining Exchange,” said Lucas. “Established by mining tycoon Samuel Newhouse to foster economic growth and resources for Utah’s growing mining industry, Utah’s stock exchange was the third exchange west of the Mississippi — the other two found in San Francisco.”
The exchange flourished and drove the economic growth and population of Salt Lake City during the 19th century and early years of the 20th century. It positioned Utah as a key financial stronghold in the Western U.S., which drove new business and capital.
As with most stock exchanges, the Salt Lake exchange stumbled during the Great Depression. In the 1940’s and 1950’s, the exchange experienced a slight rebound due to steel factories, industrial mining and the Uranium Boom. “But it was too little, too late for the old floor exchange,” said Lucas.
The Salt Lake exchange came to an end, replaced by a new technology — satellite communication.
“In 1962, the LDS Church’s Mormon Tabernacle Choir was part of the first ever international television broadcast via satellite communication to Europe,” said Lucas. “Hailed as a revolutionary development in communication for its time, Utah found itself at the dawn of technological influence for the growing global financial industry with the discovery you could piggyback a myriad of real-time financial data on the unused bandwidth of satellite communications.”
Satellite technology produced by Bonneville Communications, a broadcasting company now part of Deseret Management Corporation, developed two first of its kind financial products for the world: Market Center, which allowed investors to receive and parse financial data, and Ensign, which allowed investors to crunch and analyze financial information.
In the 1980’s Steve Achelis “nearly single-handedly started Fintech when he transformed the investment world with his Metastock software which gave access to financial charts, analytics, and forecasting to anyone with a computer,” said Lucas. Reuters acquired Metastock which continues to offer technical analysis today.
Over the years, financial giants such as Fidelity and Goldman Sachs opened operations in Utah. In 2001, Todd Crosland formed InterbankFX (IBFX). IBFX at one point was one of the fastest growing companies in Utah and processed nearly $750 billion in currency transactions annually until acquired in 2011 by Monex Group.
This rich financial history leads to the growing fintech industry here in Silicon Slopes today, which is home to many fintech companies such as Apiary Fund, MX Technologies, Lendio, Acima Credit, Onset Financial, and others.
Lucas sums up the growth and success of Utah fintech this way, “The world of finance and technology has continued to evolve through the years in Utah bringing with it a wealth of economic benefit and innovation. Utah is becoming the fastest growing State, the best place to conduct business, and the center for entrepreneurship and innovation. Silicon Slopes finds itself as the tip-of-the-sword of this success with Fintech playing a significant role. With the companies and entrepreneurs, you find in Utah, there will be continued participation and contribution to this rich legacy the great State of Utah has made to the financial world.”
Article by: A. Cory Maloy, Founder of Maloy PR, Representative for Utah House of Representatives, District 6, fly fisher, photographer
Photo courtesy of https://collections.lib.utah.edu/details?id=531658