There are some unique business models among the 295 companies that applied to participate in the second Financial Technology Accelerator program in Little Rock, said Lee Watson, chief executive officer of the Venture Center, the site for the training.
“We’re seeing new ways to lend money, regulatory tools for risk assessment for banks and new payment methods,” Watson said.
One of the applicants aims to reduce the number of entities involved in credit card transactions, said James Hendren, chairman of the Venture Center.
The fees that businesses have to pay to the parties involved in credit card transactions raise the price of the service or product, Hendren said.
“But if you go direct [from the consumer to the merchant], you can do it at a lower cost. It saves money for the merchant and potentially for the consumer. All stakeholders could have their costs lowered.”
Program applicants included businesses with new cybersecurity formats, several artificial intelligence companies and firms that improve the quality of the data in databases, Watson and Hendren said.
Officials with the Venture Center have whittled down the 295 applicants for its second FinTech Accelerator program to 125 companies. The FinTech program focuses exclusively on startup companies that work with banks.
Now the Venture Center is interviewing executives with those 125 businesses. The goal is to settle on the 10 firms that will go through a 12-week boot camp in Little Rock. The 10 companies will have access to some of the top executives at Fidelity National Information Services Inc., better known as FIS Global.
FIS is based in Jacksonville, Fla., but has about 1,200 employees in Little Rock. It has about 23,000 financial clients and more than $9 billion in annual revenue.
Five or six hourlong interviews are being conducted each day, said Collins Andrews, a retired former executive with Systematics Inc. and Alltel Information Services, forerunners of FIS. That means it will take more than 20 days to complete the interviewing process.
“Talking with these companies is really fun,” Andrews said. “These people are real dedicated at what they’re doing. These are people who’ve all quit real jobs and they’ve been working on this for a year or more. Some are better than others at explaining what they’re doing.”
Some of the companies’ executives have just graduated college, while some have been presidents of banks or consulting businesses, directors of engineering at major technology companies, or executives at Google Inc., Watson said.
The 10 finalists will be announced May 10. The conclusion of the program will be July 26.
The 295 companies that applied for the program are from across the United States and foreign countries such as India, the Philippines, the United Kingdom, Kenya, Nigeria, Colombia, Japan and Mexico.
Executives with FIS have sat in on some of the 125 interviews, Hendren said.
“There are some that [FIS] has said, ‘We like that [company],’” Hendren said.
FIS has organized what it calls a FIS core team of 20 to 25 top executives to keep track of what’s going on with this year’s accelerator program, Watson said.
“They’ve really mobilized this core leadership team to better support the accelerator program,” Watson said.
FIS had a goal last year to select at least one of the accelerator businesses to continue to work with, Watson said. In October, FIS announced that it had selected six of the 10 companies to continue a relationship with, Watson said.
There were about 20 banks involved in the accelerator program last year and the Venture Center has a goal to double that, Watson said.
“We’ve had banks, both local and from all over the country, ask how they can get involved,” Watson said. “Some of them are top 20 banks [with more than $120 billion in assets].”
Last year’s companies in the program have continued to have success, Watson said.
Nine of the 10 companies were able to raise investment capital after the accelerator program. A couple of the businesses are involved in raising $2 million to $10 million.
Chicago-based Akouba, which provides banks with a small business lending platform, was endorsed by the American Bankers Association recently as its preferred vendor for online loan origination. The process to get the endorsement took 12 months, said Chris Rentner, founder and chief executive officer of Akouba.
“That’s a status that Akouba gets to keep for six years,” Watson said.
The designation by the American Bankers Association will help Akouba significantly, Rentner said.
Before receiving the endorsement, Rentner’s business had a goal of connecting with about 10 banks a month to do a demonstration.
“In the first 15 days after the announcement of the deal [with the American Bankers Association], we had more than 300 financial institutions sign up for a demo with us,” Rentner said.
Another successful company is LumoXchange, which moved its business to Little Rock after the first accelerator program.
The headquarters for LumoXchange were in both Atlanta and Geneva, Switzerland. Maf Sonko, founder and chief executive officer of LumoXchange, now has an office in the Little Rock Technology Park.
LumoXchange offers a low-cost payment process to compare money exchange rates and send money online internationally.
LumoXchange is partnering with Little Rock-based Bear State Bank to offer its services to international and domestic consumers.
His business is excelling in Little Rock, Sonko said, and he plans to expand into the Philippines.
The goal is to settle on the 10 firms that will go through a 12-week boot camp in Little Rock. The 10 companies will have access to some of the top executives at Fidelity National Information Services Inc., better known as FIS Global.