Thursday, June 20, 2024

Seven leaders shake up traditional banking with fintech innovations

By Shannon Cuthrell

With its mix of powerful banks and a strong technology startup culture, North Carolina is a natural beneficiary as billions of dollars flow into projects aimed at disrupting traditional finance. Not long ago, it was believed that startups would drive the changes that are revolutionizing how bank customers deposit checks, pay bills, borrow money and conduct countless other transactions. But the banks aren’t sitting still: The four U.S. megabanks spent nearly $40 billion on technology projects last year, including Charlotte-based Bank of America, which says it allocated $10 billion. BB&T and SunTrust Banks officials pointed to the need for $100 million in increased tech spending as a key factor for their pending merger.

Still, enterprising entrepreneurs are carving niches. At the end of 2018, there were 39 startup fintech companies valued by investors at more than $1 billion, with a cumulative value of more than $147 billion, according to the CB Insights research firm. Charlotte’s AvidXchange, which helps automate accounts payable, is one of those so-called billion-dollar unicorns with a valuation of $1.4 billion as of 2017. The company now employs more than 1,200, up from 300 in 2014.

To reflect North Carolina’s increasing profile in financial technology, Business North Carolina interviewed five company founders and CEOs and two big-bank executives about their industry experiences.

[vc_custom_heading text=”Alexandra O’Rourke” font_container=”tag:h2|text_align:left|color:%231c1c1c” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:400%20regular%3A400%3Anormal”]
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Alexandra Villarreal O’Rourke is assistant general counsel and senior vice president of digital banking and advanced solutions at Bank of America. O’Rourke advises on Bank of America’s digital payments projects, as well as the bank’s app and website. She began her new role in January after working as a partner at the Womble Bond Dickinson and McGuireWoods law firms. She previously was a senior counsel for the federal Consumer Financial Protection Bureau’s Office of Law and Policy.

Education: bachelor’s from the University of Texas, J.D. from Harvard Law School
Hometown: Mexico City
Fun fact: O’Rourke spoke only Spanish until she was a teenager, learning English largely by watching sitcoms. Not surprisingly, her early vocabulary was heavy on ’90s TV catchphrases.

What do you do on a regular basis at Bank of America?
I advise on projects related to digital payments, our app, our website and other services. We work very closely with the business teams to innovate responsibly on products and services that leverage technology to help us better serve our customers.  

What are your proudest accomplishments in your career?
In general, I feel very fortunate that I have had a front row seat to the growth of modern fintech. When I started working on these issues back in the government, “fintech law” was not something people really talked about. Over the last few years, those of us who have chosen to focus on this area have basically had to figure out from scratch how to apply our existing framework of laws and regulations to new, cutting-edge products and services.

It has been such a fantastic feeling to see that some of the regulatory interpretations and approaches that my colleagues and I developed have now become the agreed-upon law in this area. I feel like I have gotten to be directly involved in some of the most exciting changes in our industry, and I can’t imagine a better role for a lawyer.

Are there current projects or partnerships you’re working on that you’d be interested in sharing?
Right now I am really enjoying advising the bank’s team that works on Zelle, which is a peer-to-peer payments solution. Zelle has top-notch technology — really, as sophisticated as it gets — but it also has a focus on simplicity and ease of use.

As a lawyer, those are two of my favorite things. To me, the bank’s offering of products like Zelle is really democratizing access to these new technologies by integrating them seamlessly into the traditional banking experience and bringing them within easy reach for every customer.

I have even seen some of my own family members and friends go from being skeptical of any apps dealing with money to becoming Zelle devotees. It has been very exciting to know that I have some small role in helping them gain that trust.

How do you engage with the local fintech community? And what observations have you witnessed about its growth?
I think the vibrancy and depth of North Carolina’s fintech community would surprise many. What is special about North Carolina is that we have a strong presence of sophisticated financial services companies that are truly committed to technology innovation, and that tends to attract some really interesting technology companies that are looking to collaborate with them.

Over the last couple of years, a big catalyst for that collaboration has been the Carolina Fintech Hub, a nonprofit that focuses on building and promoting the fintech ecosystem in the state. I decided to join their Operating Committee in 2017 because I saw the pivotal role they play in facilitating connections not only among existing players, but also among other members of our community who are interested in entering this space.

One example is Carolina Fintech’s Workforce Investment Network, which helps untapped talent find great work in technology for some of the region’s top companies, including Bank of America. WIN is an excellent example of the mature, sustainable and inclusive approach to fintech growth that sets our state apart.

[vc_custom_heading text=”Justin Benson” font_container=”tag:h2|text_align:left|color:%231c1c1c” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:400%20regular%3A400%3Anormal”]
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 Justin Benson is the CEO of Durham-based fintech startup Spreedly, which offers a technology to enable companies to make global transactions using multiple payments services at one time. The service offers integration and access to international banks and money-transfer services, with support for more than 100 currencies. Benson joined Spreedly in 2011, coming from executive positions at SafeNet and Intraware. Since its founding about 10 years ago, Spreedly has built a team of 50 employees.

Education: bachelor’s and graduate diploma from Monash University in Victoria, Australia
Hometown: Melbourne, Australia
Fun fact: He traveled the world for three years after college, with stops in Central and South America and a year teaching English in Istanbul. He settled in the San Francisco area for 10 years before moving to Boston and now North Carolina.

What is Spreedly’s mission and vision? And how does the company’s solutions serve the target market?
We help the world’s fastest growing online commerce services accelerate revenue growth. High-growth enterprises expand by entering new markets, launching new business models, acquiring new companies and more. But these businesses face the same payments challenges as they expand: How do they actually accept payment from — or transact with — their customers? And how do they optimize these transactions so they maximize the value of each customer?

Some large enterprises have managed to build sophisticated payment teams that combine best-in-class payment gateways, geographic coverage, fraud prevention, and other approaches. Working with multiple payments providers gives these enterprises a distinct advantage: the flexibility they need to grow their transactions and revenue.

Our mission is to bring the power and flexibility of best-in-class payments infrastructure to every company. We make it simple to integrate with our platform and then use any payment service. That allows our customers to enable and optimize transactions, regardless of their business model.

How much capital has Spreedly raised to date? And are you seeking funding currently?
To date we’ve raised over $6 million, including funds from E-Merge, our lead investor. We’re now profitable, in eight-figure revenue and plowing every dollar back into the business. We also constantly evaluate whether it makes sense to raise money and try and grow even faster as our business grows and expands to new markets and geos.

In your view, what factors give significant potential to Spreedly’s payment platform?
Online commerce continues to grow and is increasingly cross-border — in 2018 there was over $3 trillion in transactions online globally. Merchants can now reach more consumers than ever earlier in their company life cycle, yet they know that transacting securely and successfully with customers in the markets they live in, in the currencies they use [and] with the payment methods they want is vital to success and minimizing lost sales.

Spreedly makes that easier to do. Our customers enter new markets, launch new business models and transact with new customers faster because of the flexibility, security and power of our payments infrastructure.

What is the most recent milestone in your company’s history?
We can count hundreds of high-growth businesses as customers. These companies use Spreedly to transact in 100 countries around the world. And we’re growing with them. That’s led to a major milestone for us. In October 2018, we passed the $10 billion mark in annualized transactions, a first for us. That incredible volume proves both how robust the Spreedly platform is and the trajectory of our customers across a range of verticals.

[vc_custom_heading text=”Joe Giordano” font_container=”tag:h2|text_align:left|color:%231c1c1c” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:400%20regular%3A400%3Anormal”]
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Joe Giordano is the CEO and co-founder of Charlotte fintech startup Payzer, which launched in 2012 and now employs 85. He previously served as senior vice president of payment strategy and development at Bank of America. Before that, he led the development of ExxonMobil’s Speedpass, a wireless transaction system he invented and designed. Speedpass was rolled out at gas stations and fast food outlets and received acclaim as the retail industry’s first payment system to use tokenization and radio frequency.

Education: bachelor’s from James Madison University, MBA from George Washington University
Hometown: Born in Baltimore, he grew up in Vienna, Va. He moved to Charlotte 12 years ago.
Fun fact: Giordano won his eighth-grade science fair with a weather-related project.

What is your mission for Payzer, and how do your solutions meet the needs of your target market?
Payzer is an all-in-one software solution for specialty trade contractors such as HVAC workers, plumbers and roofers. A simple way to think about Payzer’s offering for contractors is that we are a combination of SalesForce, Square and LendingTree combined into one platform.

How much money have you raised to date? Are you currently seeking capital?
Payzer has raised a little more than $21 million, with our last round closing in November of last year with $9 million, including an investment from Ferguson, a $16.7 billion company that is the nation’s largest distributor of plumbing supplies.

Our largest investors are Grotech Ventures and Route 66 Ventures, which are both from the [Washington,] D.C./Maryland area.

What are your observations about Charlotte’s fintech community? And how does Payzer benefit from the overall growth of the fintech ecosystem in the U.S.?
The growth in the fintech community in Charlotte is logical given the banking expertise and the continued technological developments in the areas of cloud computing and mobile networks. The growth of the fintech ecosystem helps Payzer as both customers and investors have greater acceptance of nonbank software solutions.

In your view, what factors give significant potential to Payzer’s platform?
Payzer has enormous potential as we are a leading software provider in the specialty trade contractor market, which has grown to more than $1 trillion. This opportunity is also unique as it has only been enabled in the last few years with the implementation of improved mobile network technology like [Long Term Evolution technology] to enable more robust mobile applications.

Prior to the implementation of LTE, mobile networks were not robust enough nor reliable enough to support a mobile application that could run a business. Since contractors work on the run, in your home or at your office, they required a mobile solution to fully benefit from the internet. As a result, when we started in 2012, internet adoption was very low in the contractor market. The size of the contractor market — over $1 trillion — coupled with the enablement of the internet via LTE, which I knew was imminent, collectively created a huge opportunity.

What is the most recent milestone in Payzer’s history?
Some key milestones for us are that we have more than 4,000 contractor customers, and we now operate in all 50 states, including Hawaii, Alaska and [Washington, D.C.].

[vc_custom_heading text=”Ramy Serageldin” font_container=”tag:h2|text_align:left|color:%231c1c1c” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:400%20regular%3A400%3Anormal”]
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Ramy Serageldin is the co-founder and CEO of Charlotte fintech startup Honeyfi, a money-management app enabling couples to set long-term savings goals, view their spending habits and track bills. Last September, Honeyfi was chosen among 10 startups to join the 2018 Barclays Accelerator, powered by Techstars cohort, co-sponsored by Barclays PLC, a London-based financial-services company.
Serageldin started the company in 2012 after working as chief operating officer of New York City-based mobile-banking startup Moven. He also has worked at Ernst & Young and Bank of America.

Education: bachelor’s from Wake Forest University, MBA from UNC Chapel Hill
Hometown: Chapel Hill
Fun fact: Serageldin speaks English, French and Arabic.

What is your mission for Honeyfi and how does the app serve its target market?
We’re on a mission to help families lead less stressful lives — at least when it comes to the finances. The platform helps couples integrate their finances and achieve their goals together. We built Honeyfi to respond to the two unique challenges of today’s couples. First, today’s couples get married later than ever, which means they keep their finances more separate than previous generations and maintain more banking relationships.

Second, while they want to accomplish the same goals as their parents (weddings, kids, house), they are financially worse off than their parents were, thanks to lower income levels and more debt.

To use Honeyfi, couples first link their bank accounts to the app, decide what to share with their partner and then see all of their finances organized in one place. We start by helping couples with their day-to-day finances, like tracking a household budget, spending and bills. But we go beyond that by helping couples navigate important and expensive life events — like having a baby and buying a home — by making it easy to set aside money for goals and find products/services they need.

How much financing has Honeyfi raised? And are you currently seeking capital?
We were fortunate to participate in the Barclays Accelerator, [powered by Techstars,] which did invest in us. So far we’ve received more than $500,000 in funding, which includes angel investments and the deal from the accelerator. We are getting ready to raise our seed round.

In your view, why does Honeyfi’s app have significant potential?
The problem Honeyfi is solving is universal, and we already have interest from couples around the world. Our team has a unique combination of domain expertise (JPMorgan Chase & Co., Bank of America), startup experience (Series C-funded neo-bank Moven) and technical chops (we have designed and built Honeyfi ourselves).

What is the most recent milestone in Honeyfi’s history?
We recently launched our goals feature, which allows couples to save toward their goals by automating the savings from their existing checking accounts. It was our most requested feature and we have been receiving great feedback.

[vc_custom_heading text=”Chris Cox” font_container=”tag:h2|text_align:left|color:%231c1c1c” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:400%20regular%3A400%3Anormal”]
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Chris Cox is the president of Wilmington-based Apiture, a joint venture formed in 2017 by parent Live Oak Bank and Atlanta-based First Data Corp. The company provides a variety of digital banking offerings — the jargon is application programming interfaces — for regional and community banks and credit unions. Banks use Apiture’s APIs to update their platforms for peer-to-peer payments, document storage, cloud integration and other features. The goal is to enable smaller institutions to compete with the giants.
Before Apiture’s spinoff in 2017, Cox served as head of digital banking at First Data. Apiture has 141 employees.

Education: bachelor’s from Miami University, MBA from Duke University
Hometown: Though he grew up in Indianapolis and lived in Denver and Atlanta, Cox now calls Wilmington home.
Fun fact: Cox has visited six of the seven continents, with only Antarctica to go.

What is Apiture’s mission and how do you serve clients?
Apiture allows banks and credit unions to better compete in the modern age by giving them the tools they need to engage with their customers through digital channels. We help financial institutions address evolving consumer expectations around digital engagement and respond to new competitive pressures from financial technology companies.

What gives Apiture’s banking solutions potential in this market?
Apiture is launching digital banking services that are built on the core principles of “cloud native,” “API-first” and “open.” These technology principles allow us to deliver solutions that are fast to create, inexpensive to run and easy for financial institutions to consume.

We believe strongly that financial institutions of all sizes are hindered by reliance on older technology. Today’s bank systems are fundamentally not designed to allow banks to innovate, grow and partner. We want to change this dynamic.

What’s the most recent milestone in Apiture’s history?
Apiture was recently recognized by American Banker as one of the best places to work in fintech. This reflects our commitment to taking care of our team and making Apiture a great place to work. I strongly believe that [having] happy and committed employees directly correlates to happy and committed clients.

Is Apiture primarily funded by First Data and Live Oak Bank? Have you raised any funding rounds independently? Are you currently seeking funding?
Both First Data and Live Oak Bank have significant and equal ownership shares. SunTrust Bank made an equity investment in Apiture in October 2018. We are not currently seeking funding.

How many employees do you have? And are you hiring?
We have 141 employees and are actively hiring software engineers and test engineers. We’re looking for talented people who want to help us reinvent banking on modern technology stack.

[vc_custom_heading text=”Jonathan Hartsell” font_container=”tag:h2|text_align:left|color:%231c1c1c” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:400%20regular%3A400%3Anormal”]
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  Jonathan Hartsell is senior vice president and head of digital business development for Wells Fargo Virtual Channels, an arm of the bank’s Payments, Virtual Solutions and Innovation Group, which was established in 2016. By examining trends and hosting focus groups, Hartsell’s team gathers data to develop ways to start or improve services that can benefit the bank’s customers.

Education: bachelor’s from Wake Forest University, MBA from Emory University
Hometown: Charlotte
Fun fact: Hartsell’s goal is to take his three children to the top 10 national parks before college.

What do you do at Wells Fargo on a daily basis?
My team and I explore and evaluate new trends and opportunities within the digital space. For example, a couple of years ago with the rise of the independent workforce, we saw more and more people in the U.S. working outside of the traditional employer-employee relationship. We sat down with customers and focus groups, and found that these workers have unique financial capabilities and needs, such as figuring out their own tax liabilities.

In looking for external partnerships that may help us create an experience to solve this customer pain point, we found a company called Hurdlr that helps self-employed users stay on top of their expenses and income. We thought they were doing something unique, so Wells Fargo accepted them into the Wells Fargo Startup Accelerator.

In the six-month program, each startup receives a small investment, and Wells Fargo tech and business leaders provide mentorship and help them with prototyping. Through this, we can start to understand how we might collaborate with a company that can help us deliver new innovative solutions to solve our customers’ financial needs.

What were you doing before taking on your current role at Wells Fargo? What past experiences do you bring to the position?
I joined Wells Fargo in 2007, starting with operational strategy roles in the credit card organization. I then transitioned to focus on our digital capabilities and led an enterprise program focused on helping customers improve their financial health. Based on customer research, we developed a series of capabilities to help customers understand their current financial situation, feel more stable and take advantage of life’s opportunities. Some examples of our work include the development of a Financial Health Conversations program and piloting a stand-alone savings app.

Have you helped lead local partnerships between Wells Fargo and organizations/companies in North Carolina?
We’ve been involved with the Queen City Fintech accelerator since inception, mentoring and coaching companies that go through the program. We’re proud to help build the ecosystem of fintech here in Charlotte, which benefits the broader fintech community.

We also partnered with Carolina Fintech Hub, together with financial services companies in Charlotte and Raleigh, to help build a community around financial services technology as a means of driving innovation and bringing in new talent.

Innovation is core to Wells Fargo’s values in driving innovation for our customers and engaging in communities where our customers live and work.

What do you enjoy most about your job?
I think it’s exciting to have the opportunity to think about what’s new and next for customers. We work toward understanding their unique financial needs and challenges and seek external perspective partnerships and new technologies to deliver an even better, more transparent experience for our customers.

[vc_custom_heading text=”Brian Hamilton” font_container=”tag:h2|text_align:left|color:%231c1c1c” google_fonts=”font_family:Montserrat%3Aregular%2C700|font_style:400%20regular%3A400%3Anormal”]
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  Brian Hamilton and Sarah Tourville were teaching at Duke University when they co-founded Raleigh-based Sageworks in 1998. Their technology evolved into software products that help financial companies invest and manage risk. Last year, California-based private-equity group Accel-KKR bought the 400-employee business and called Sageworks “one of the country’s first fintech companies.” Since the sale, Hamilton has revved his passion for teaching entrepreneurship in prison systems and at middle and high schools.

Education: bachelor’s from Sacred Heart University, MBA from Duke University
Hometown: Milford, Conn.
Fun fact: Hamilton runs a farm on the border of Apex and Cary.

What made you want to enter the fintech market with Sageworks ?
I guess our claim to fame is that we were the first fintech company in the U.S. We’ve tried to go back and validate that, but I think we and Salesforce were the first two companies to actually operate in a [software as a service or SaaS] environment. We were one of the very first companies to execute over the internet with cloud-based technology. But I wouldn’t say I started in fintech, since there was no “fintech” when I started.

What response did you get when you first launched?
It was extremely difficult. In those days, everything was made on disks. Sarah Tourville came up with the idea of our service being SaaS-based and stored in the cloud. The first five years were tough because we had to educate the market. It really took us five to 10 years to find our place. Our first big customer was Citibank in 1999. We made that deal with just two or three employees at the time. I know for sure that the vast majority of our value was generated in the last eight years. So it was a long incubation period.

What have you observed about the growth of the fintech community in North Carolina?
It’s great that there are so many entrepreneurs in North Carolina who are solving finance problems and developing technology solutions. Obviously Sageworks has played an important role, but there are so many other good examples too. Years ago, I met Doug Lebda of LendingTree and thought his company was the best idea I’ve ever heard in my life. nCino is another great example, along with AvidXchange. Before that, another big success was First Research, a Raleigh company that sold to Dun & Bradstreet in 2007. The founder, Bobby Martin, is a genius.
I don’t necessarily think North Carolina will be known across the U.S. as a hub for fintech, but the growth has happened organically with some incredibly good fintech companies.

Why did you decide against starting another company?
I chose the nonprofit route because I felt like I could make a bigger impact than just being another tech entrepreneur. I’ve been teaching entrepreneurship at prisons for around 27 years now. When I sold Sageworks, I wanted to apply the concept more broadly to other groups. Now we’re also working with high schools, middle schools, veterans and some women’s groups. The whole idea is to get entrepreneurship to everyone. I teach a short course at schools, covering what entrepreneurship is, what it takes to be an entrepreneur and how it can benefit the students.

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