Fintech incubation and data access with Fintech Sandbox

In an interview with The Financial Revolutionist, Kelly Fryer, Executive Director of Fintech Sandbox, dives into the incubator’s evolution, emphasizes the importance of data for early-stage players, and shares her thoughts on the future of fintech.

The Financial Revolutionist: Tell us a bit about yourself and your role at Fintech Sandbox.

Kelly Fryer: I’m the Executive Director, or CEO, of Fintech Sandbox. Fintech Sandbox is a 501(c)(3) nonprofit that provides a leg-up for early-stage entrepreneurs around the world by providing them with free access to premium data sets and infrastructure in order to build, test, and launch their products, through our Data Access Residency. I joined the company in 2020 and have been leading the organization and team for the last 3 years.

My career has always been in financial technology. Before joining Fintech Sandbox, I worked for Techstars, running their NYC-based fintech accelerator program in partnership with Barclays. So I spent a lot of time sourcing, due-diligencing, and advising early-stage fintech startups, as well as working with the venture capital and financial services ecosystems.

How has Fintech Sandbox evolved through the years?

Fintech Sandbox was started in 2014 because of the unaddressed problem for fintech entrepreneurs being unable to access the expensive datasets that are needed in order to build their products. Imagine being a bootstrapped entrepreneur, and you need to pay $200,000+ just to get data to test your AI model or credit underwriting tool or personal finance app; that could easily be the difference between getting to your first sale and never getting off the ground. Our mission at Fintech Sandbox is to lower those barriers and make fintech entrepreneurship more accessible and inclusive, so that powerful fintech products can get to market.

The biggest evolution for Fintech Sandbox over the years has been the industry trends and needs; our data sets and offerings must move with industry needs. When the company first started, capital markets and data—such as FactSet, Morningstar, and Nasdaq—relevant for institutional investment products and tools were the primary market interest. Then, we added credit bureau data, and then consumer data, and then news data, and now crypto, ESG, weather, and other alternative datasets too. Not surprisingly, topics like crypto and generative AI were not the big focuses 10 years ago. So, as fintech and the pain points that it’s solving have evolved, so have Fintech Sandbox’s data access priorities. We really have to stay at the forefront of the earliest stages of innovation and what are emerging trends in fintech, which is always exciting.

What’s on the horizon for Fintech Sandbox?

Fintech Sandbox is just coming off the heels of hosting Boston Fintech Week 2023—our annual fall conference to celebrate the company’s HQ fintech community—and now we’re planning and prepping for 2024, which will be the seventh year of the conference. In the spring, we’ll also host our annual Demo Day, which includes a multi-day virtual showcase of a selection of our most recent Data Access Residency startups along with a curated in-person reception in New York City.

2024 will mark Fintech Sandbox’s 10-year anniversary, so we’re very excited to celebrate that milestone with our community. We’ve worked with over 330 global startups—including Kensho, OpenInvest, ZeroHash, Novo, and Petal Card—and we’re eager to continue to expand our global reach and the number of entrepreneurs we support next year.

We also have a couple other exciting launches and new events for 2024 that I look forward to sharing more about in the coming months!

What key themes and trends in the fintech space have been top of mind for you as of late?

Synthetic data has been on my mind a lot lately. Our world now both generates and requires such large volumes of data, but there are still gaps in available datasets as well as privacy or regulatory challenges in pulling together the right data sets needed. Synthetic data can help fill these data gaps for both large corporate institutions and fintechs. There are many use cases and opportunities for synthetic data in financial services, as well as across other industries. I’ve recently seen interesting uses of synthetic data for both training AI models, as well as validation testing and compliance.

Bringing financial innovations to community banks and credit unions has also been top of mind for me. These are financial institutions that play a very important role in their communities and for financial access, but they’re often resource-strapped and struggle to invest in digitization. Whether it’s the core infrastructure, customer onboarding, user interface, or new financial offerings, community banks and credit unions need more support to invest in and implement innovative solutions to meet the modern needs of their customer base as well as to attract new demographics.

October was a busy fintech month for you with Fintech Sandbox's Boston Fintech Week, and your presentation at Money 20/20. What topics discussed at the events are you watching for 2024?

Yes, October is the marathon month of fintech conferences! There was plenty of talk of generative AI, but infrastructure was the overarching topic across most of these events, especially in banking. It was our theme for Boston Fintech Week 2023 (“On the Brink: Building the Infrastructure We Need for a Bold Financial Future”). As budgets tighten, organizations grow more cautious, and there is increasing regulatory scrutiny; focusing on and investing in core infrastructure is a strong bet. So for 2024, I’ll be watching to see how companies continue to build out their infrastructure through partnerships and deals, especially as vertical SaaS and platforms continue to expand.

The other macro area that was widely discussed and I’m keeping an eye on for 2024 is the evolving VC and fundraising landscape. Valuations have changed, investors are being more conservative, and fintechs still need to get funded. With longer fundraising cycles and having to extend their cash, I’m watching how it continues to impact startups, especially at the earlier stages. Even through our Data Access Residency, we have seen an influx of startups looking for private company data to help with funding, underwriting, M&A discoverability, and more. That alone is an important reflection on the state of the private markets and how concerned both entrepreneurs and various types of investors are about it. It makes value-add services—from a venture fund’s platform offerings to Fintech Sandbox’s Data Access Residency—more essential than ever, to help entrepreneurs extend their runway to their next funding round. I have a hard time seeing the market making significant shifts in only the next 12 months.