A new report from Ernst & Young has found that Massachusetts is home to nearly 10 percent of all American fintech startups.

Massachusetts firms make up roughly nine percent of the fintech startups in the U.S., a segment experiencing exponential growth globally, increasing from $8 billion in 2010 to $110 billion in 2019. Compared to competitor fintech hubs around the world – identified in the report as London, New York, Montreal, San Francisco, Atlanta and Charlotte – the report defines the commonwealth’s key strengths as its talent, technology and existing R&D landscape for financial institutions. This is inclusive of startups, capital providers, accelerators/incubators, academics, regulators and policymakers.

A survey of 25 local startups conducted as part of the report’s research found that early-stage fintech startups view Massachusetts as a healthy hub for growth, with 60 percent of the respondents believing that the overall Massachusetts fintech ecosystem is strong.

“The COVID-19 public health crisis has made it clear that digital transformation will continue to drive innovation in financial services, and with leadership from our local institutions along with the Fintech Working Group, we can put the commonwealth at the forefront of that transition,” state Housing and Economic Development Secretary Mike Kennealy said in a statement.

Ernst & Young recommended state officials and industry players work to strengthen five key areas of the fintech ecosystem statewide:

• Capital: Unlock new and varied sources of capital, especially early stage financing;
• Interconnectivity: Create a unifying brand around Massachusetts as a destination for fintech firms;
• Talent: Encourage diversity in the ecosystem and retain a higher percentage of the university talent;
• Policy & Regulation: Foster dialogue with regulators and policymakers; explore a regulatory sandbox that drives commercial outcomes; and,
• Infrastructure & Technology: Establish an inter-university fintech body.

The Ernst & Young report was developed for the Massachusetts FinTech Working Group to inform its strategic framework and action agenda for the next three to five years. The 24-member Fintech Working Group, whose mission is to make Massachusetts a leading FinTech hub, is co-chaired by Kennealy, and Mike Fanning, head of MassMutual U.S. The group’s membership also consists of representatives from the commonwealth’s largest financial institutions, startups, investors, non-profits and academia.