Day 2 of Fintech Summit: Regulatory Advice, Data Strategy and Arkansas ‘Microhub’ Status | Arkansas Business News

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 CEO, Governor Asa Hutchinson and FIS CEO Gary Norcross.

A technical “Microhub”

The outgoing governor and Norcross kicked 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, started 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, annual revenue was about $200 million. Today, this figure is around 15 billion dollars.

“Even at our size, we knew we couldn’t build everything,” Norcross said when asked why FIS decided to start sponsoring the Venture Center-hosted FIS Fintech Accelerator in 2016. The state also sponsors this 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 also claimed that an unheard of 90% of the companies that have participated in the FIS Fintech Accelerator are still in business, although 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.

More: Click here to see the full discussion between Norcross and Hutchinson.

The governor said he was working to incorporate technology as a fundamental element of that effort 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 that support for accelerator programs has come from his discretionary fund. He hopes to include that support in the national budget to make it more permanent.

Audience member Collins Andrews, a leader of the fintech accelerator, asked Hutchinson about his national ambitions and what the fintech community could do to support them. He encouraged them to “be engaged.”

Cool advice

Allen North, vice president of the Banking Supervision Division of the Federal Reserve Bank of St. Louis, called the nation’s banking system a healthy one.

He emphasized that the Fed works closely with the FDIC and state regulators to do its job, and for nationally chartered banks, it must also work with the Office of the Comptroller of the Currency.

He spent most of his 10-minute talk advising startups on what banks expect from 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 linked directly to consumers, it is a solid way to handle complaints and comply with the additional and more complex regulations that pose additional risks
• Demonstrated knowledge of applicable regulations and established internal controls to mitigate them, such as audits
• Clear contractual designation of responsibilities that the start-up and the banking partner must assume

Strategizing data

Dave Warfield, vice president of sales for Acxiom, which has a large presence in Conway, spoke about the importance of using data to provide a better customer experience.

“It’s no secret that customers expect a pleasant experience with you. And so, whether it’s your bank, airline, hotel, power company, customers and consumers expect a hassle-free experience, he said. “But it’s market and industry issues that drive the need for better customer experiences.”

These issues include today’s market highs and lows, credit restrictions imposed by banks, 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 difficult. It’s not for the faint of heart. You don’t want to do it yourself, okay.

“Statistics show that 2% of your data changes every month,” he said. “So by the end of the year, almost 25% of your data is up to date. So you have to constantly be proactive about that.”

Warfield told the summit participants that they must:

• Understand what data they capture today; for example, 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 your existing customer data through data processing experts
• Ensure that data is managed in a privacy-compliant manner.