The second day of the Little Rock Venture Center’s inaugural VenCent Fintech Summit provided a full agenda of startup pitches, demos and speakers that included a Fed official, Acxiom executive, Gov. Asa Hutchinson and FIS CEO Gary Norcross.
A Tech ‘Microhub’
The outgoing governor and Norcross kicked things off with a “fireside” chat about “The Rise of Arkansas As A Global Fintech Leader.”
That growth can be traced back to the 1960s when FIS, now a global fintech company, got its start as Systematics of Arkansas. It still has a presence in west Little Rock but is headquartered in Jacksonville, Florida.
Norcross said that when he joined FIS in 1988, its annual revenue was approximately $200 million. Today, that figure is about $15 billion.
“Even at our size, we knew we couldn’t build everything,” Norcross said when asked why FIS decided to begin sponsoring the Venture Center-hosted FIS Fintech Accelerator in 2016. The state also sponsors that program.
FIS also invested $1.2 billion in technology in 2021, and it formed Impact Ventures, which has invested $150 million in startups, the CEO said.
Norcross touted, too, that an unheard of 90% of companies that have participated in the FIS Fintech Accelerator are still in business, even though the typical percentage for similar programs is closer to 20%-30%.
Eight of those companies have moved into Arkansas, Hutchinson added.
Before he took office, the state had historically focused its economic development efforts on attracting manufacturers, he said. He also said fintech is important to Arkansas because banking is a strong and growing industry here.
The governor said he worked to incorporate technology as a foundational element of those efforts by doing things like increasing computer science education in K-12 schools along with sponsoring accelerator programs.
Hutchinson said his goal of giving Arkansas the reputation of being “a microhub” of tech companies had been accomplished.
He also said support for accelerator programs has come from his discretionary fund. He hopes to include that support in the state’s budget to make it more permanent.
Audience member Collins Andrews, an executive in residence for the fintech accelerator, asked Hutchinson about his national aspirations and what the fintech community could do to support those. He encouraged them to “be engaged.”
Allen North, vice president of the Banking Supervision Division at the Federal Reserve Bank of St. Louis, called the country’s banking system a healthy one.
He stressed that the Fed works closely with the FDIC and state regulators to do its job, and, for nationally-chartered banks, it must also partner with the Office of the Comptroller of the Currency.
He spent the majority of his 10-minute talk advising startups about what banks expect of them, from a regulatory perspective.
He said banks expect:
- Financial and managerial capacity to deliver on the business proposition i.e. capital, experience, business resumption and continuity plans
- A strong understanding of all associated risks
- If the business is tied directly to consumers, then a solid way to deal with complaints and comply with the additional and more complex regulations that pose further risks
- Demonstrated knowledge of applicable regulations and established internal controls to mitigate them, such as audits
- Clear contractual designation of responsibilities the startup and the bank partner will each assume
Dave Warfield, vice president of sales for Acxiom, which has a large presence in Conway, spoke about the importance of utilizing data to provide a better customer experience.
“It is no secret that customers expect a pleasant experience with you. And so, whether it's your bank, airline, hotel, electric company, customers and consumers expect a hassle-free experience, he said. “But there are market and industry issues that drive the need for better customer experiences.”
Those issues include the current market highs and lows, credit restrictions banks impose, the pandemic and much more, Warfield said.
He emphasized that every business needs a formal data strategy that defines how the business acquires, shares and uses data and includes not only data it collects from customers but also third-party data for other sources that can provide a more complete picture of its customers.
Then Warfield warned that having data and managing it are two different things. “Data management is very, very hard. It's not for the faint of heart. You don't want to do it yourself, OK.
“Statistics show that 2% of your data changes every month,” he said. “So, by the end of the year, almost 25% of your data has been updated. So you've got to constantly be proactive with it.”
Warfield told summit attendees they must:
- Understand what data they capture today; for instance, from a form their customers fill out
- Understand what data they need to obtain
- Create, develop and publish a formal data strategy that is dynamic
- Actively manage their data on existing customers via data management professionals
- Make sure data is managed in a privacy-compliant manner.