Chicago’s Growing FinTech Sector

ChicagoNEXT’s Jimmy Odom Moderates Forum on FinTech

Highlighting Chicago’s growing FinTech sector, Director of Inclusive Entrepreneurship at ChicagoNEXT Jimmy Odom moderated a forum at the Polsky Center for Entrepreneurship and Innovation on February 15. The Entrepreneurial Outlook is a seven-part breakfast series with topics ranging from AI to civic technology or food, featuring moderated conversation, networking, and time for one-minute pitches.

The financial technology event was hosted in partnership with FinTEx, which fosters collaboration and innovation within the financial technology and services industries in Chicago and the broader Midwest. The Polsky Center brings together Chicago’s innovation community, and includes laboratory, classroom, co-working, and incubator spaces in addition to an innovation fund for early-stage ventures.

Friday’s discussion delved into the industry landscape for the upcoming year in contrast with 2018, with focus areas of regulatory, consumer preference, and financial service trends. Participants in the forum included startup founders, members of the venture capital community, and compliance specialists. The panel noted a number of new technologies rapidly emerged in 2018, such as blockchain and cryptocurrency, and the initial fervor is transitioning into more thoughtful use towards commercialization. From a venture capital perspective, 2018 was also a large year for payments-related technology.

In contrast, the upcoming year is predicted to see strong interest in on-balance lending. Further, panelists discussed a broad trend in fintech companies of “unbundling-to-rebundling.” This is exemplified by startups which break off a single financial service, make it simple and build a user base, at which point they have critical mass to introduce new services, mirroring larger institutions. It was noted, however, that a number of challenges and opportunities lie ahead of this trend, namely companies pursuing technology for technology’s sake, without clear purpose or simplifying the lives of consumers. However, if companies maintain a straightforward, consumer-centered vision, the participants believe 2019 will be a prime year to serve new markets, given that a variety of populations remain underbanked. Beyond startups, larger financial institutions are anticipated to further automate functions and step deeper into the cloud and data analytics.

Overall, 2019 will be a transformative year for the vibrant fintech industry in Chicago and across the country.