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How New Orleans is riffing on financial innovation

In New Orleans, the birthplace of jazz, another movement is gaining momentum — the harmonious convergence of finance and technology known as FinTech. The city is fast embracing financial innovation.

In simple terms, FinTech refers to the innovative use of technology to deliver a wide range of financial products and services — especially payment services. FinTech companies leverage advancements in software, mobile applications, artificial intelligence, blockchain and other emerging technologies to enhance and streamline various financial processes. I know it sounds complicated, and the truth is, it can be. But FinTech can make a huge difference in people’s everyday lives.

The goal of FinTech is to improve the efficiency, accessibility, and affordability of financial services for individuals, businesses, and other entities. That can include digital payment solutions, such as mobile wallets, consumer apps like Venmo or PayPal, and contactless business systems like Square. FinTech provides users with convenient and secure alternatives to cash or plastic.

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“To me, broadly, FinTech is anything to do with the core products of payments or finance,” said Josh Fleig, senior vice president of business development at GNO, Inc. “That’s payment rail systems, people who are creating novel technologies to transfer money or exchange money from one place to another, whether that’s a geography or a business.”

In a city like New Orleans, with numerous small retailers and vendors, FinTech applications like Square or Cash App can be vital to survival.

“It’s an access game, right?” Fleig said. “If you think of restaurant apps like Toast or apps like Square and Venmo, everything in this category, it’s all about ease of access, low barrier of entry for small vendors.”

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Fleig said FinTech applications can help small businesses — from a babysitter to a small restaurant — to easier receive payments for their goods and services. They don’t need to find a credit card payment processor, for example.

If you’ve ever been to a “pop-up” or an artist’s market where a small vendor set up shop and served food or sold hand-crafted items, chances are you’ve used a FinTech app to pay with your credit or debit card. Without this technology, many of these vendors wouldn’t be able to accept digital payments. So many restaurants got their start as pop-ups, with FinTech helping them grow into eventually moving into a brick-and-mortar establishment.

FinTech also allows income to be reported, thereby bringing more revenue into the city’s tax base. “I can pay my yard guy through Venmo and it’s all recordable,” Fleig said. “So it’s a little more of an above-board process getting some of those taxes back into the community.”

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Fleig also said that FinTech entails novel approaches to finance. It could be a smoother web experience for someone who’s applying for a loan or managing their mortgage. FinTech platforms offer alternative lending and crowdfunding solutions that connect borrowers directly with lenders or investors. These platforms often use advanced algorithms and data analytics to assess creditworthiness and facilitate quicker loan approvals.

Also falling under the umbrella of financial technology are programs and apps that give people tools to manage their personal finances more effectively. Budgeting apps, expense trackers, and financial dashboards that can offer insights into personal spending patterns and help people with tasks like creating and managing a monthly budget or saving for a new car. 

Additionally, blockchain technology, which underlies cryptocurrencies like Bitcoin, is a decentralized and secure ledger system. FinTech companies leverage blockchain for various applications, including smart contracts, cross-border payments and improving transparency in financial transactions.

FinTech has broad potential, and is a growing field. Fleig said that’s why organizations like GNO, Inc., are supporting more and more local FinTech companies.  Just a few local companies include iSeatz and Netchex.

“We work with our ESOs, our entrepreneurial support organizations, who are investing in startups, in new ways to build businesses and launch products and services from our region,” Fleig said. “Whether that’s Idea Village or Propeller or OHUB, we spend a tremendous amount of time laying the foundations and working with entrepreneurial support organizations.” 

And while FinTech continues to grow and become more and more ingrained in the ways business is conducted, the next generation of business leaders is already recognizing it as the way of the future. At Tulane University, a student organization called Tulane FinTech, or TUFT, promotes financial technology and educates the student body about financial technology, trending technology, and blockchain-based services.

“We embrace technology and how it can benefit us in the workplace and our careers, and I think learning about FinTech and how it works, what advancements are being made, is the biggest goal so students can learn how to participate in the space as well as find ways to create new ideas,” said Max Allaire, president of Tulane FinTech.

So the club’s goal is to educate people, inspire them to collaborate and create new ideas, and set up our members for success in joining the workforce and participating in financial technology.

Allaire is a junior majoring in marketing, and he works to bring in speakers — professionals who work in the FinTech space — for the club’s meetings.

“We bring in influential speakers to teach our members of the many applications of the technologies, while also giving students insight in how they can become future leaders,” Allaire said. 

For Allaire, FinTech is also more than just making money. It’s also about financial inclusion. FinTech plays a crucial role by reaching underserved or unbanked populations. Mobile banking and digital financial services help provide access to financial products for individuals who may have limited access to traditional banking services.

“I think FinTech can give more opportunity and equity and equality to everyone in Louisiana, making it possible for people to have more safety in their money, be able to invest, take out loans, and in the future, purchase insurance that is guaranteed — no matter what happens.”

FinTech’s emergence in New Orleans holds tremendous potential for boosting the local economy, driving innovation and fostering financial inclusion.

Looking ahead, collaboration between FinTech startups and traditional financial institutions, innovation-driven disruption, and increased financial literacy will continue to shape the city’s economic future. And the Big Easy’s FinTech sector is primed to make its mark on the global stage by expanding internationally, driving financial inclusion, and participating in shaping regulatory frameworks.

As the FinTech revolution continues to gather momentum worldwide, the dynamic growth in New Orleans positions the city as a key player in the global FinTech ecosystem for years to come.


Did you know? With its founding in 1998, PayPal became one of the first fintech companies to operate primarily on the internet.

 

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