The growth of the technology industry in Utah, which includes a growing group of financial technology (fintech) businesses, started the concept of Silicon Slopes — a tech boom unseen since the birth of Silicon Valley in California. Utah fintech originates from a foundation of financial firsts in Utah.
Utah has more than a century of financial innovation and entrepreneurship leading to the fintech growth of today, which includes notable companies such as Apiary Fund, MX Technologies, Lendio, Acima Credit, Onset Financial and others.
Utah’s involvement in finance started in the late 1800s with the formation of the Salt Lake Stock and Mining Exchange to foster economic growth and resources for the growing mining industry. Utah’s was the third exchange west of the Mississippi — the other two in San Francisco.
The exchange flourished in the early 1900s, a time of prosperity in the Salt Lake Valley — almost tripling in size from 1900 to 1930, positioning Utah as a financial stronghold in the West. With the resources of a stock exchange, capital was easy to acquire, which started and grew businesses and contributed to a soaring population.
The stock market crash of 1929 caused the United States, including Utah, to descend into economic depression. It wasn’t until the 1940s that the condition improved when steel factories and industrial mining gave Utah’s economy a boost. The uranium boom in the 1950s brought new life to Salt Lake’s Stock and Mining Exchange. But it was too little too late for the old floor exchange.
As the Salt Lake Stock Exchange era closed in the early 1960s, Utah found itself again at the dawn of technological influence with the discovery real-time financial data could piggyback on the unused bandwidth of a new technology — satellite communications.
Satellite technology led to an open channel directly into the world’s most extensive trading floors in New York and Chicago. For the first time, a Utah investor had a front row seat to see every twist and turn of the financial markets via a satellite dish or FM radio transmission in mere seconds.
Bonneville Communications developed two first-of-a-kind financial products: Market Center, which allowed investors to receive and parse financial data, and Ensign, which allowed investors to crunch and analyze financial information.
Live financial data quickly drew the attention of finance entrepreneurs who created a new software and technology industry category — fintech. Big Wall Street firms started opening satellite offices in Utah to develop new software on the back of the protocols and language used by Bonneville Communications.
One Utah entrepreneur in the 1980s, Steve Achelis, nearly single-handedly transformed the investment world with his Metastock software, which gave access to financial charts, analytics and forecasting to anyone with a computer.
Metastock opened the world of finance to individual investors who tracked, analyzed and forecast investments on charts displayed on their personal computers. Achelis’ company, Equis, proliferated until acquired by Reuters in 1996. Metastock continues to keep a significant share of the technical analysis software market today.
During the 1990s, financial companies from Fidelity to Goldman Sachs began setting up operation centers in Utah because of the data communications and technology infrastructure unique to the Western U.S.
In 2001, Todd Crosland formed InterbankFX (IBFX). Recognized as one of Utah’s fastest growing companies in 2008, IBFX was a currency clearing firm — processing nearly $750 billion in currency transactions annually. It was IBFX’s technology that set it apart from the competition — a platform that connected multiple banks and currency transactions around the globe. Trade Station, a subsidiary of Japanese Monex Group, acquired Interbank FX in 2011.
With a history of financial innovation as the backbone of today’s Silicon Slopes economic leadership, fintech plays a significant role in the rich legacy the great state of Utah has made to the financial world.
Shawn Lucas is founder and CEO of Apiary Fund, a fintech company focused on developing traders seeking the freedom of flexible income.