A Little Rock technology startup with ties to the former Systematics Inc. and Alltel Corp. announced plans Thursday (April 5) to create 19 high-paying fintech jobs as the company scales up to take advantage of the growing consumer adoption of mobile banking options.
Matt Johnner, president and co-founder of BankLabs, said his fast-growing, privately-held firm is looking to expand its line of niche mobile banking and payment products targeted at the construction, real estate and agriculture sectors. With incentive-based support from the Little Rock Chamber of Commerce and the Arkansas Economic Development Commission (AEDC), Johnner said the two-year-old startup is looking to find highly qualified applicants as the company plans to double its growth by 2020.
“Our mission is to re-imagine the banking products of the future,” Johnner said in an interview with Talk Business and Politics. “What that means to us is to develop products for banks (that) create new fee income sources, generate or attract deposits, and new loan volume or differentiates the bank or credit union.
“Some banks are not happy with the status quo and some banks are. We want to help those banks in Arkansas, across the country and around the world that do want change and find new ways to go about banking.”
Under the guidance of BankLabs Chairman and CEO Mike Montgomery of Little Rock, Johnner said the early-stage startup firm has 17 employees in offices in Arkansas, Dallas and other locations across the U.S. Unlike some local fintech startups that are aggressively seeking outside venture capital to expand, Johnner said he, Montgomery and three other financial backers are taking a strategic and deliberate approach by funding the company’s future growth with their own money and sweat equity.
“We could be profitable by 2018, but are choosing to reinvest in growing our products and finding the right people that fit our company,” he said.
Johnner, who offices in Dallas, said the firm chose Little Rock to expand and grow its operations because of the region’s flourishing fintech culture, and because of Montgomery’s background as a former executive with Alltel Information Services, formerly known as Systematics.
The Texas native said Montgomery not only serves as the company’s chief executive but has guided BankLabs’ growth strategy after the company was launched in January 2016 from a closely aligned limited liability partnership, Radius Group Solutions LLC. That Little Rock venture group was also founded by Montgomery in 2010, and includes several board members with ties to Alltel, Acxiom Corp., Arkadelphia-based bank Southern Bancorp and other central Arkansas firms.
Johnner said BankLabs’ cloud-based, proprietary banking offering, Construct, automates the residential and commercial construction loan process for banks and non-bank lenders. The product is used by 70 banks in 35 states across the U.S. since the company, he said.
BankLabs also recently added +Pay to its product offerings, which works seamlessly with the firm’s cloud-based software platform and automates the payment process for general contractors, banking subcontractors, builders, title companies, disbursing agents and other professionals in the construction space, Johnner said. The company also has developed other fintech products aimed at the real estate sector, with future plans to bring another financial tool for Arkansas’ agriculture sector online soon.
“We want these (tools) to be really easy to use by the banker, whether it’s a loan administrator, a loan officer or a banking executive out on the streets of Little Rock or Fayetteville doing business with the local community and having access to do business on their mobile phone,” Johnner said. “It is going very fast, and part of the reason is that businesses want to work with banks that use modern mobile tools.”
Under its agreement with the Little Rock chamber and AEDC, BankLabs will receive the state’s Equity Investment Tax Credit, which is targeted at only tech-based businesses in Arkansas. Under the tax credit, technology startups in Arkansas paying wages in excess of the state or county average wage will receive income tax credits that are equal to 33.3% of the amount invested by a backer or venture group.
The income tax credit earned may be used to offset 50% of the investor’s Arkansas income tax liability in any one tax year, said AEDC spokeswoman Brandi Hinkle. “Any unused credit may be carried forward for a period of nine years. The income tax credit earned may be sold upon approval by AEDC,” she said.
AEDC Executive Director Mike Preston, Little Rock Mayor Mark Stodola and Little Rock Chamber board chairwoman Cathy Tuggle all applauded the pact to aid BankLabs’ next stage of growth.
“The company is not only helping banks, but also creating fintech marketplace options that expand business opportunities for everyone in the industry and across the globe,” Preston said. “We are hopeful that the state’s support will not only help BankLabs grow its Little Rock team, but also help to improve the state’s economy.”
Johnner said BankLabs will begin looking immediately to fill key positions in professional product development and customer relations. He noted the company has had some difficulty in finding tech-savvy new hires in the tight Arkansas job market, but hopes that working with AEDC, local officials and the community’s emerging fintech sector will attract top candidates to Little Rock and develop a pipeline of new talent from within the state.