(The Venture Center of Little Rock)
The Venture Center and the Arkansas Bankers Association have partnered to launch a new technology accelerator to address the specific challenges facing Arkansas banks.
Ten startups will be selected for the Arkansas Banking Solutions Accelerator, a 12-week program designed to advance technology in the state and help local banks navigate the ever-changing financial sector.
The initiative marks a shift for the Venture Center, which for years ran the program with the Independent Community Bankers of America, but the new partnership with the ABA is part of an ongoing effort to “refocus on Arkansas,” said Daniel Schutte, vice president of strategic partnerships at the Venture Center.
The Banking Solutions Accelerator differs from other fintech accelerators by focusing on the specific pain points facing Arkansas banks. A big problem facing banks is what Lorrie Trogden, president and CEO of the ABA, calls a “huge niche” – compliance and regulatory technology, especially in an increasingly complex landscape.
“We are constantly faced with a myriad of new regulations. It seems like a new regulation comes out every day,” Trogden said.
She referred to Regulation 1071, which requires financial institutions to collect and report data on lending to women- and minority-owned businesses and small businesses within an 18-month period.
These regulatory burdens could be particularly challenging for smaller regional banks, as they sometimes lack the resources and means to develop their own solutions, Trogden said.
“It’s one thing to have something new and shiny and great. And there will always be a place for that,” Trogden said. “But for banks, it’s all driven by regulation.”
Hoping to address regulatory technology (regtech), the program aims to connect Arkansas banks with companies that can provide customized, cost-effective solutions. Although companies from anywhere can apply, Schutte noted that there may be some “bias” toward regional companies that are already addressing the issues facing Arkansas banks.
However, he stressed that the program as a whole is still looking for the “best technology.”
The selection process includes interviews conducted by the Venture Center, followed by a review by a committee to select the startups with the greatest potential. Selected companies receive one-on-one meetings with leaders in Arkansas’ banking industry and ABA member banks, as well as access to the Venture Center’s out-of-state network.
A key focus of the accelerator is the needs of local banks, which make up a significant part of Arkansas’ financial landscape. In addition to assisting with regulatory compliance, the program is designed to help local banks remain technologically competitive and prevent customers from moving to other states for more advanced offerings.
“We want all the dollars that come from the citizens of Arkansas to stay in our banks here in Arkansas,” Trogden said. “We want to provide them with everything they need so they don’t have to take their dollars out of the country. I think that’s what this acceleration program will do.”
The Banking Solutions Accelerator will start in mid-September and end with a demo day in December, where the ten selected companies will present their solutions to potential investors and industry participants. Each company will receive a financial investment and the event is expected to attract around 400 participants.
“We fundamentally believe we can impact Arkansas with this,” Schutte said. “That’s really our fundamental long-term goal: to do everything where banks win, businesses win, the state wins. No one loses in this kind of economic development work.”
