No matter whether it's Tupac v Biggie in rap, a preference for Misty Point oysters over Kumamoto, or whether In-N-Out burgers are superior to Shake Shack's (for the record, they are), there has always been a rivalry between the United States' East Coast and West Coast, no matter what the subject matter.

Of late, that rivalry has been playing out in the fintech space, as the young pretender of Silicon Alley has attempted to take on the established might of Silicon Valley. And while it is clear that the sheer size of the tech scene in the San Francisco Bay Area dwarfs that of New York City, the gap is narrowing every year. In 2014, New York had 117,000 workers employed on the tech scene, a 71% increase on a decade earlier. At the same time, San Francisco and Silicon Valley's tech workforce stood at a little shy of 300,000, a figure that had barely budged in a decade and a half, in terms of accounting for 22% of the Bay Area's total workforce. But does this mean that the Bay Area's dominance is under threat?

Diverse Diversity

Clearly, there are some who would like to think so. Kevin Siskar, New York Regional Director of the Founder Institute and host of the Ambition Today podcast told Mondato Insight that these figures reflect some of the natural advantages that are inherent to the density of the New York metro area and the diversity of its economy and 22 million people. For all that New Yorkers gripe about the subway, the speed with which entrepreneurs can move around the city means that ideas have more opportunity to germinate in a more diverse hotbed, and the benefits that that brings are, in Siskar's opinion, becoming more obvious to investors and entrepreneurs alike.

The noise of New York, and the resultant competition for attention, means that startups seeking to attract top talent need to invest in fewer accoutrements and gimmicks (in addition to the now de rigeur pingpong table) to keep staff motivated and interested.<!--- look up the piece from Entrepreneur (???) on this from last week---> But perhaps counterintuitively, Siskar also believes that the competition for attention that the city generates means that even good ideas and good companies have to work harder to be heard, creating better products and services in the process. Pointing to both employment numbers and the fact that venture capital in the tech space in New York grew at twice the rate of Silicon Valley in the decade between 2003 and 2013, Kevin Siskar believes that New York's reputation for what is generously called bluntness will serve it well when VC money inevitably tightens.

Risk Takers v Money Makers

It may be a case of pandering to stereotypes, but New York's reputation for toughness and California's reputation for the dramatic is believed by some to be born out in the in the tech and VC scene. 2015 saw a panic in Silicon Valley when fin tech investment slowed, partly a consequence of the area's over-dependence on one single industry: tech. The response in New York was more muted, reflecting both the diversity of the economy and Wall Street's systemic experience (for better or worse) with the ebbs and flows of investment cycles. (See a previous Mondato Insight on this topic here.)

Greg Palmer, Senior Director of Events for the Finovate Group told Mondato Insight that there are no significant differences to be observed between companies demoing at their New York fall and Silicon Valley spring shows. However, financial institutions and capital investors tend to stay close to their home base. (For all their mutual rivalry, one trait shared by Manhattanites and San Franciscans is the belief that if it isn't happening in their hometown, it's probably not worth knowing about.) This lends the New York event a slight air of formality in comparison to the more casual Silicon Valley show, but the real differences lie among the attendees.

That California's nouveau riche entrepreneurs tend to be willing to take on bigger risk than New York's "old money" establishment is one stereotype that is persistently repeated by people with personal experience of both environments. Indeed, one does not have to be a fan of Wall Street to find some comfort in the fact that post-crash, America's major financial institutions tread warily when it comes to taking on risk and adhering to regulatory prerequisites. It is unlikely that the Silicon Valley approach (of which Uber is, of course, the exemplar: act first, get sued later) reflects some vestiges of the Wild West spirit, rather than being a product of different scales of operations in the financial sector. America's smaller banks and credit unions tend to be more common in the western half of the country, meaning their lack of systemic importance allows for the absorption of greater risk, in addition to the need to differentiate and innovate to compete with the big banks.

One of the consequences of this, however, is what Moven President and Co-Founder Alex Sion described as "great, amazing naivety in the West Coast" about the scale of banking's problems. In Silicon Valley, the attitude is "Why not?" rather than "Why?". Wall Street is (even if it is a late-in-life conversion) on the other hand grounded in a regulatory mindset that makes it easy to be constrained by one's own thinking, even if it is what Sion described as being "traditional and methodical, and with a focus on partnerships," attributes that customers tend to find reassuring when it comes to financial institutions. California's blue skies and eponymous mode of thought has focused on customer experience, and rescuing consumers from pain points that were formerly believed to be something that simply had to be endured as the cost of doing business with banks. Nevertheless, despite all their efforts, fintech has barely scratched the surface of what can, and will, be done in the future as the digital transformation penetrates the financial services industry.

Equilibrium?

Sion sees, however, an equilibrium arriving between the two centers of finance and tech, after having swung back and forth between the two for the past several years (perhaps indeed epitomized by Moven's partnership with TD Bank, which graced the stage at Finovate Spring a few weeks ago.) Nevertheless, Sion has observed a retreat of some of the starry-eyed optimism and naivety that characterized Silicon Valley's approach to fintech in earlier days. The scale of the task in transforming finance to make it fit for the digital 21st-century is now being recognized by fintech entrepreneurs, alongside an understanding that banking will be by far the greatest challenge that the tech disruptors have ever faced.

This, dare we call it New York-style, hard-nosed realism that is creeping into fintech is, however, accompanied by an excitement at the size of the opportunity. "Fintech is hot and getting hotter as it goes global in scale," Mr. Sion told Mondato Insight, "with demand for fintech outstripping supply." But is also brings much more intense scrutiny on business models and sustainability. Bigger capital outlays are going to be needed for FIs to turn around their customer-facing business, despite the likely large-scale job losses (discussed by Mondato Insight here) that are looming. In fintech, Alex Sion observes, "There is no longer any such thing as the half-million dollar startup" (a phenomenon more commonly associated with California), and that applies equally no matter what part of the country an entrepreneur is in.

The fusion of tech and banking (both fintech and techfin, as Chris Skinner has referred to the different models), i.e. 17th-century meets 21st-century, is one of the most fascinating stories being played out in the digital transformation. It has also given rise to a scenario where New York and Silicon Valley, with their very different cultures, mores, and priorities, have been thrust together in a marriage of (in?)convenience. If historical precedent is anything to go by, the might of capital is likely to force fintech companies to bend and fall into line. The degree to which Californian blue-sky thinking will permanently permeate Wall Street is the big unknown about this entire process. Wall Street is going to remain the center of the financial services industry, and despite all of New York's inherent strengths, Silicon Valley is unlikely to be dethroned as the king of tech. But will Wall Street be fintech or techfin - that will be the benchmark for judging who really won this battle of the coasts.

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