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Finnovation

10/4/2018 1:00:00 PM

The financial technology sector, better known as FinTech, is reshaping the banking and financial services industry, offering products that are more user-friendly, efficient, transparent and automated than in the past.

Lending, payments, personal finance and mortgages are among the services that are evolving in this new world of finance. PayPal is a good example of an early entry in the FinTech space, with an online application that supports money transfers and provides an electronic alternative to checks and money orders. GoFundMe and other crowdfunding sites are FinTechs as well.

In Minnesota, Sezzle Inc. is probably the state’s best-known FinTech. The Minneapolis-based company, which was started in 2016 by veteran entrepreneur Charlie Youakim, offers a product that allows customers to buy items online without needing a credit card.

Other promising FinTechs in Minnesota include Upsie, Apruve, ClickSWITCH, and Live Give Save.

Youakim, says Minnesota is a relatively small player in the FinTech space, but he says interest is strong and the state has complementary pieces that could help the sector grow here. The state has 19 Fortune 500 companies and a large number of businesses in technology and finance that could utilize applications and programs created by FinTechs.

Minnesota’s strong tradition of innovation and a lineup of programs and services that help new businesses grow also are important. DEED has Small Business Development Centers statewide that offer free consulting to entrepreneurs, and the agency launched a new program this year called Minnesota Innovation Loans for Entrepreneurs (MILE).

The Minnesota High Tech Association, MN Cup startup business competition, and an assortment of accelerators and incubators are contributing to new business success in Minnesota as well. Sezzle was a finalist in the high tech division of the 2016 MN Cup competition and won MN Cup Securian Prize that year – a $10,000 award for technology innovation.

To learn more, read Banking on FinTechs on the DEED website.

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