(The Venture Center of Little Rock)
The Venture Center and the Arkansas Bankers Association have teamed up to launch a new technology accelerator aimed at addressing challenges specific to Arkansas banks.
Ten startups will be selected for the Arkansas Banking Solutions Accelerator, a 12-week program to advance technology in the state and help local banks navigate the ever-changing financial sector.
This initiative marks a shift for the Venture Center, which has led the program for years 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 distinguishes itself from other fintech accelerators by targeting specific pain points of Arkansas banks. One major issue banks are facing 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 face a myriad of new regulations constantly. It feels like every day there’s a new regulation coming out,” Trogden said.
She cited Regulation 1071, which requires financial institutions to compile and report lending data for women-owned, minority-owned and small businesses, all within an 18-month period.
Those regulatory burdens can be especially challenging for smaller community banks, which sometimes lack the resources and funds to develop in-house 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 the banks, it’s all driven by regulation.”
In hopes of addressing regulation technology, or regtech, the program aims to connect Arkansas banks with companies that can provide tailored, cost-effective solutions. While companies from anywhere can apply, Schutte noted there might be some “bias” towards regional companies already addressing problems faced by Arkansas banks.
Though he emphasized that overall, the program is still looking for the “best tech.”
The selection process will involve interviews conducted by the Venture Center, followed by a committee review to choose the startups with the most potential. Selected companies will have one-on-one meetings with leaders in the 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 addressing the needs of community banks, which are a significant part of Arkansas’ financial landscape. On top of aiding regulatory compliance, the program aims to help local banks stay technologically competitive and prevent customers from going out of state for more advanced offerings.
“We want to keep all of the dollars that are coming from Arkansas citizens with our banks that are here in Arkansas,” Trogden said. “We want to provide everything that they need so they don’t have to take their dollars outside of the state. I think that’s what this accelerator program will do.”
The Banking Solutions Accelerator, which will begin in mid-September, will conclude with a demo day in December, during which the ten selected companies will pitch their solutions to potential investors and industry participants. Each company will receive a monetary investment, and the event is expected to attract around 400 attendees.
“We fundamentally believe we can impact Arkansas through this,” Schutte said. “That’s really our fundamental goal long term: doing it all where banks win, companies win, the state wins. Nobody loses in this kind of economic development work.”
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