Jacksonville’s new breakout industry: Fintech 

(Courtesy of Jacksonville Business Journal)

 “Jacksonville is very well positioned when it comes to fintech,” said Marc Chalifoux, vice president of fintech intelligence and innovation at TD Bank’s Payments Group. “I believe fintech can be a differentiator for Jacksonville.”

Chalifoux addressed a gathering of banking and technology professionals Monday at an event hosted by Jax Chamber and TD Bank (NYSE: TD). He believes that Jacksonville has the five ingredients – entrepreneurs, large corporations, research universities, capital investors and government – that are needed for an industry to succeed.

Fintech is an emerging and rapidly growing industry, Chalifoux said. About 58 percent of Americans bank on their mobile device at least once a month, and 33 percent of that group use services from fintech startups, according to Chalifoux. Fintech startups generated $6.2 billion in venture capital in 2016, while banks spent $62.2 billion in 2015 on technology.

“We pride ourselves on being a human bank, but we are also increasingly becoming a technology company,” said Chalifoux.

Fintech that was once feared as disruptive is now being integrated by banks to provide a wider range of solutions for customers, Chalifoux said.

“Think of a bank as an aggregator of all these services, and increasingly so,” said Chalifoux, noting that TD Bank has worked with fintech startups to improve payment services, customer service, tax filing, fraud detection and self-service capabilities.

Chalifoux pointed to six areas where banks and startups are driving fintech innovation: Artificial intelligence, blockchain (a decentralized way of verifying assets), cloud computing, biometrics, APIs (customer interfaces) and cryptocurrency.

Chalifoux was joined onstage by local entrepreneurs Ted Willich, CEO and co-founder of NLP Logix, and Neal Anderson, CEO of OnPay Solutions. NLP Logix provides a wide variety of AI and machine learning solutions, but about 30 percent of its revenue comes from financial clients. OnPay Solutions automates business-to-business payments, eliminating the need for costly paper checks and simplifying accounting processes.

Both Willich and Anderson noted technological advancement that has brought down barriers of entry in the fintech space.

“AI started out with the big guys, the Googles and Facebooks,” Willich said. “What is different is the computing power and the pricing has come down considerably.”

For its financial clients, NLP Logix has used AI to predict which customers will pay back debt and create personalized profiles of depositors. OnPay also utilizes AI, using it to extract specific data from various document types that OnPay then formats and sells back to clients.

“Fintech has become more accessible for companies of all sizes,” said Anderson. “The amount of technology and the price – it’s more available.”

For entrepreneurs in the fintech industry, Chalifoux recommended focusing on solving a specific problem. That is an easier sell to a bank than creating a technology and then trying to find a problem it can fix, he said. For those in the finance industry looking to bring in a fintech service, Chalifoux recommended starting small with a narrow problem that isn’t critical to your business.

“What is the pain point that is taking you a long time now that is keeping you from what you want to be doing?” he recommended asking. “Start small… Crawl before you walk before you run.”

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