Guest Blog: The Queen City Reigns in FinTech

Andy Moose, Vice President, North Highland Consulting

In March, I had the privilege of moderating an expert panel discussion on the state of the financial technology – FinTech – business sector in North Carolina. The panel, titled The Future of FinTech, was hosted by the North Carolina Technology Association’s Tech Talk Live. Panelists from the Charlotte area included Michael Praegar, CEO/Founder of AvidXchange, Abhishek Mehta, CEO of Tresata, and Jonathan Rowe, CMO of nCino. 

The panelists discussed a variety of topics surrounding the rise of financial technology in the region. A key takeaway was that Charlotte has a lot of positives that make it a compelling place to advance FinTech. We’re the second largest financial center in the U.S. We offer great quality of life for FinTech entrepreneurs, and their investment dollars go further here, which gives them more runway to advance startups. Another key benefit is that the Queen City is supportive and easier to navigate than larger markets, and offers ready access to thought leaders in Financial Services. 

In terms of growth factors, the panel agreed that data and analytics is emerging as a key driver for FinTech and an enabler for North Carolina technology expansion in general. Our universities have quality data programs, we’re a popular location for corporate data centers, and we are home to multiple large companies with compelling data sets. Panel members commented that while the Carolinas offer great promise for growth, we need more capital. There was also broad agreement that we must put the politics of HB2 behind us so that we can sustain momentum for the region on the national and international stage without penalty.  

The panel also stressed the importance of both data and people in the growth equation. FinTech is all about revolutionizing the way financial services are transacted by putting the customer’s needs first.  This means designing products that meet customer expectations about how technology facilitates the things they want to do and accomplish. Data informs and quantifies which services are ripe for disruption.  Human experience design facilitates the personalization and tailoring of customer offerings. People who understand data and digital, and how to build engaging human experiences, are going to determine which FinTech players thrive and which ones will falter.  That’s also why acquiring and keeping top talent is such a priority for companies and for the region.  

With regard to the competitive landscape and potential obstacles to growth, there was some disagreement on the potential role for the big banks in the North Carolina FinTech scene. Some felt that prevailing conservative banking cultures hinder the creativity, learning and risk-taking vital to entrepreneurial growth. Others saw more potential for a healthy balance of co-opetition and greater collaboration between banks and FinTech startups.   In order to benefit from the collaboration, banks will need to improve their ability to experiment with and onboard entrepreneurs into their business and technology ecosystems more seamlessly than they do today. 

A commonly held idea was that incumbent financial services companies need to continue to think through where they partner externally and where they build capabilities internally. More and more, banks are looking to innovate outside of their four walls to both broaden their lens and accelerate time to market. However, this could put competitiveness at risk and lead to customer experience leakage.  

The panel also noted that newcomer disrupters are continuing to identify the beachheads in Financial Services that they can take, like AP Automation, with the aim to expand once their software platforms are established. This trend is also likely to accelerate as disruptor firms take more market share from traditional players. 

Also of interest was the state of Queen City (QC) FinTech, a 12-week accelerator program designed to help FinTech startups mature through intense mentorship from leading banking executives, business development professionals, venture capitalists and attorneys in Charlotte’s robust business community.  Led by former Bank of America executive and serial entrepreneur Dan Roselli, Queen City FinTech offers access to executive level members of each of Charlotte’s Fortune 500 financial services institutions.  Accepted companies also receive an upfront capital infusion of at least $20,000 per company with the potential for access to follow on funding for the top performers in the program. 

It was a lively discussion with diverse and sometimes divergent perspectives. It was clear that there remains much work to be done to firmly establish Fintech in Charlotte.  The consensus, however, was that with its unparalleled access to Financial Services industry knowledge and some of the best quality of life in the US, there is potentially no better city in the US to grow a FinTech startup than The Queen City.