01 Dec 5 Takeaways From Charlotte’s Inaugural FinTech Conference

As a technology entrepreneur, Queen City dweller, and co-founder of Visual Caffeine, I was thrilled to attend the inaugural Southeast FinTech Venture Conference this past week. It was a delightful event full of energy, passion and innovation. The event was held at Barings’ brand new headquarters in Uptown Charlotte. The anticipation was palpable as Dan Roselli, the conference lead and founder of Queen City FinTech, kicked off the event with a thought-provoking investor panel.  The rest of the day featured start-up pitches, additional discussion panels, and a keynote address by Rob Frohwein, co-founder and CEO of Atlanta based automated lending platform, Kabbage. In 2015, Kabbage crossed the $1billion valuation mark and continues to grow.

Charlotte’s role as a FinTech hub in the Southeast is very promising as the start-up ecosystem continues to mature and gain momentum thanks to regional incubators, accelerators, venture capitalists and financial institutions that are providing funding fuel to ignite innovation. I’d like to say a special “Congratulations” to all the entrepreneurs who pitched their products and services; and a “Thank You” to the sponsors who supported the event and set a high bar for future conferences.

These are my top 5 takeaways from the conference:

1.- Charlotte is a fertile ground for FinTech Innovation

Charlotte is the second largest financial services hub in the United States but it has lagged behind New York, the largest hub, in developing a vibrant technology ecosystem to foster innovation. That is all beginning to change as tech incubators and accelerators are growing and attracting entrepreneurs from all over the world.  The low cost of living, compared to New York or San Francisco, allows southeast start-ups to stretch investment capital further. To put it in another way, if a start-up needs $100,000 to build a mobile app in the Southeast, the same app would cost, on average, 20-25% more in Silicon Valley. Financial Institution veterans are beginning to pay closer attention to the FinTech scene and engaging entrepreneurs as sponsors, investors are even launching their own start-ups.

2.- Disrupting the Market Through Partnerships

There is a misconception that FinTech firms aim to disrupt the market by replacing existing financial services but this is not the model I saw emerging at the conference. Many start-ups are following a B2B model and turning to established incumbents to offer their products. Incumbents see the value of this offerings and able to mark-test them with very little risk and without having to fund the R&D. Start-ups can focus more on their solutions and less on marketing B2C products.

These start-ups are capitalizing on disruption through partnerships:

uBack – Charlotte: Philanthropy company that connects non-profits to corporations and individuals through their mobile app. Recently partnered with Bank of America to offer their services to 24 million customers.

Monotto – Atlanta: Focused on millennials, it provides white-labeled products and APIs to automated savings, foster financial health and de-risk account holders.

3.- FinTech Start-Ups Are Pushing the Boundaries of Modern and Emerging Technologies

At the heart of FinTech innovation is the ability to start in a greenfield without any legacy decisions weighing down your options. This grants start-ups agility in developing technology solutions to fulfill needs in the market at a much lower cost and speed than established FIs.  It was not surprising that a majority of start-ups at the conference featured mobile apps built on the cloud powered by block chain and/or machine learning while utilizing the latest and greatest tech stack and tools. As a result of living in the bleeding age, stat-ups are finding creative ways to de-risk and refactor emerging technologist so that they can be monetized.

These start-ups are pushing the boundaries of  modern architectures:

TrustStamp – Atlanta: Provides identity & trust as a service by using AI and facial biometrics to create a secure digital identity that can be stored as a biometric hash.

WalletFI Durham – Platform that allows customers to identify & move recurring charges, subscriptions, and card payments using a digital wallet. Offered through a mobile app and powered by AI.

HoneyFI Charlotte – Mobile app for millennial couples that provides financial management through goals, budgets and insights.

4.- Investors Are Still Cautious About Blockchain and CryptoCurrencies, But Not For Long

Crypto Currencies and Distributed Ledger technologies are still emerging as a viable option to replace traditional centralized clearing and transaction systems. Entrepreneurs are working on products to tame the block chain beast and make it more applicable to enterprise systems. Investors see the potential but are cautious about the relative immaturity of the field. Entrepreneurs are focusing on establishing platforms and frameworks to leverage the best of block chain-based technologies while abstracting it from consumers.

These start-ups are pioneering frameworks to leverage the benefits of blockchain and cryptocurrency technologies:

YellowCard Alabama – Focused on providing a digital currency marketplace for more than 1 billion people across Africa and the Middle East with no access to traditional financial services. Accepts USD and local currencies and coverts them to bitcoin, Ethereum, and other digital currencies.

QBRICS – Charlotte: Provides a platform to enable enterprise systems to integrate blockchain technologies in their existing workflows. It also enables customizable security cont

5.- FinTech Start-Ups Are Reaching the Masses with Little to No Access to Traditional Financial Services

According to the FDIC, 17 million Americans are unbaked, meaning they don’t have a bank account, while another 51 million are underbanked, which means they supplement their bank account with alternative financial services.  The number of people worldwide having an account is steadily growing but  but today about 2 billion adults remain without a bank account and access to traditional financial services. FinTech firms are finding ways to use modern platforms to offer domestic and international consumers non-traditional financial services. Not only are they focused on financial inclusion for individuals, but they are also bringing innovation and access to undeserved industries.

These start-ups are removing socio-economic barriers to achieve financial inclusion:

MyLumper – Atlanta: Electronic payment platform to modernize the trucking industry.

Payzer – Charlotte: Mobile and SaaS plaform to modernize payment management for specialty trade contractors.

UnBrokerage – Atlanta: Provides small businesses with easy and affordable access to insurance products.

Qoins – Atlanta: Provides credit card debt management through automated savings for millennials.

 Why is my start-up not listed?

The 2017 Southeast FinTech Conference featured more than 25 start-ups. For the complete list, please visit: http://www.qcfintech.co/se-fintech-venture-conference

I used the following selection critera:

1. The start-up must be located in the southeast.
2. The start-up must offer financial products or products that are primarily used in the financial services industry.
3. The start-up must offer innovative new financial services to undeserved or unserved markets.

About the author

Fredy Villa is a veteran technology strategist, emerging technology consultant and Co-Founder of Visual Caffeine. He is an expert in modern application architectures, artificial intelligence and the software developing life cycle.