By Sam Boykin

North Carolina is custom made for the intersection of technology and financial services. Charlotte, the state’s largest city, is the second-largest banking center in the country. About two hours to the east is the Research Triangle Park, home to more than 200 cutting-edge companies, including world-renowned clusters in information technology and life sciences. Moreover, North Carolina is one of the fastest-growing states, attracting young, tech-savvy workers from around the world — more than 126,000 North Carolina residents make up the state’s growing IT workforce. In fact, North Carolina has the second-fastest growing information-technology industry in the U.S., growing 26% since 2010, according to the Economic Development Partnership of North Carolina.

Further bolstering the state’s financial/technology landscape are assets including North Carolina’s 58-campus community-college system, as well as renowned research universities such as Duke University, the University of North Carolina at Chapel Hill and North Carolina State University. Growth is assisted by grass-roots organizations such as Queen City Fintech in Charlotte, a boot-camp style accelerator program dedicated to identifying and growing innovative fintech startups. It all adds up to a winning formula for success. The following are examples of four North Carolina companies that are merging financial services and technology and driving both industries forward.

nCino: MOVING BANKS INTO A NEW ERA

Pierre Naudé is on a mission to revolutionize banking. He is the CEO of Wilmington-based nCino, which bills itself as the worldwide leader in cloud banking. The company has developed an operating system that enables financial institutions to streamline operations and provide speedy and convenient digital services for their customers. In the process, the company has experienced remarkable growth, with revenue increasing more than 1,800% between 2012 and 2015. The company  landed on Inc. magazine’s 2016 list of the nation’s 500 fastest-growing private companies.

“We are helping move banks into a new era,” says Naudé. nCino’s main focus is its Bank Operating System software, which enables banks to process loans more efficiently while remaining in compliance with regulations. Naudé says the operating system provides seamless integration through the entire loan process, including document management and security. Not only does this increase profitability and lower costs for the banks, it also provides a more convenient, user-friendly experience for the borrower.

“If you look at today’s typical mortgage-application process, you just want to pull your hair out because it takes so long,” he says. “You have to go to the bank and fill out a bunch of forms and provide the same information over and over.”

nCino helps eliminate much of this red tape by equipping banks with a broad view of each customer, including their past interactions with the bank. Instead of having to re-enter data, the bank can simply create a new loan and the customer can often provide any necessary information electronically, which speeds the entire process.

“Borrowers are only interested in two things: Am I approved for the loan, and when can I get the money?” Naudé says. “People want an answer in 24 hours. They don’t want to wait 30 to 60 days. So rather than worry about paperwork, compliance issues and data entry, we’re enabling financial institutions to instead focus on their customers. We are transforming the way bankers operate.”

Naudé entered the financial industry while growing up in South Africa. “I always loved technology and wrote code as a kid,” he says. He ended up working as a systems analyst and was one of the pioneers in deploying ATMs in his native country. Looking for opportunities in the U.S., he took a job as divisional president of Atlanta-based S1 Corp., an online-banking technology company.

At S1, he befriended James “Chip” Mahan, then S1’s CEO and chairman. Mahan left the company in 2006 to start Live Oak Banking Co. Today, the Wilmington-based company is one of the country’s leading originators of small business loans. When Naudé left S1 in 2012, he asked Mahan about the software that allowed Live Oak to automate all its loan processes from one location. “This was the beginning of the nCino platform,” says Naudé. “I used that small sample of code, hired a few people, and we built a product that services not just SBA lenders but full commercial-banking platforms.”

When Naudé founded nCino in 2012, the company had four employees and Live Oak was its sole client. Today the company has about 235 workers and more than 120 customers, ranging from $100 million community banks to $250 billion multinational banks. Naudé anticipates greater growth, which will further drive Wilmington’s technology sector.

“When we came here there was a very small presence of IT companies,” says Naudé. “But once this company gets big enough, we’re going to lose some people who will go across the street and start their own company. That’s how cities like Austin and Charleston became technology hubs. I can clearly see us on that path. It’s going to be like Silicon Valley by the ocean.”

FIDELITY INVESTMENTS: HARNESSING THE POWER OF EMERGING TECHNOLOGIES

When Fidelity Investments announced in October 2015 plans to invest $8 million and bring 600 new jobs to Durham and the Triangle, it added to the company’s already robust presence in the region. The Boston-based asset manager first set up operations in Raleigh in 2002 and over the years has added a data center, customer contact center and various walk-in investor centers in Charlotte, Greensboro and other cities. Helping seal the most recent deal was a state incentive package worth up to $15 million, provided the company meets hiring targets. Fidelity also received a $54.6 million grant to bring 2,000 jobs to Durham and Wake counties in 2006.

Today Fidelity employs about 4,200 people in North Carolina, most of them at the company’s Research Triangle Park campus. Company officials indicated that most of the new 600 positions will be in information technology, software engineering and cyber security. The average annual salary will be more than $100,000.

Fidelity ranks among the world’s largest money managers, with its 25 million customers holding $5.4 trillion in assets. It is perhaps best known for its 462 mutual funds. Owned by the Johnson family of Boston, Fidelity can take a long-term view rather than be subject to the quarterly pressures facing publicly traded peers. “This was a very big project for Durham,” says Ted Conner, vice president of economic development and community sustainability for the Durham Chamber of Commerce. “These are very tumultuous times, and we’re lucky local companies are growing and national companies, to a degree, are still looking here. We just need to be in the right position to take advantage of any opportunities that present themselves.”

Conner says Fidelity wouldn’t be expanding in Durham without confidence that the area’s workforce can meet their needs. “The Triangle is very unique. One of our many strengths is the great universities and colleges, which are continually training new potential employees and making this a very sustainable location for new and growing businesses.”

Much of this educational training is focused on technology, which is crucial in preparing the workforce of tomorrow and attracting innovative, growing companies. Fidelity Investments is not only embracing technology, but driving it.

Researchers and scientists in the company’s Fidelity Labs, including locations in North Carolina, identify and explore emerging technologies to create new products and services. Recent innovations include the first investing app for both Google Glass and “smart” watches. The company also works with Harvard, MIT and Stanford to develop pilot programs for  artificial intelligence, big data, fintech and predictive analytics projects.

“There is no pure IT industry anymore,” says Conner. “IT is converging into so many other clusters, especially financial services. All these different disciplines are coming together and creating new products and new ways of doing business, which create a plethora of new opportunities for business. Today, in order to compete in the global marketplace, companies either have to have a sophisticated IT component or be able to partner with the right IT companies. If they don’t, they’ll soon be out of business.”

COGNIZANT TECHNOLOGY SOLUTIONS CORP: HELPING FINANCIAL-SERVICES COMPANIES ADOPT NEW DIGITAL TECHNOLOGIES

The Teaneck, N.J.-based company first established a presence in North Carolina in 1997, and as the state’s economy has grown and diversified, so has Cognizant. The IT consulting firm, which today has more than 50 delivery and operations centers worldwide and approximately 244,300 employees, uses digital technologies to help companies enhance productivity and operate more efficiently.

Working within several core industries, most notably financial services, health care and manufacturing, Cognizant is one of the world’s fastest growing companies. In 2016, it ranked No. 230 on the Fortune 500, jumping 58 spots from the previous year. The company’s most recent North Carolina expansion began in 2014. The state awarded the company a Job Development Investment Grant of up to $5 million to add 500 jobs with an average annual salary of about $80,000 and invest more than $1.4 million by the end of 2018. North Carolina edged out sites in Florida, Texas and Virginia to win the project.

Company officials indicated that North Carolina is an attractive place because the state is home to large current and prospective clients and also boasts strong educational institutions and a thriving technology base. Cognizant employs about 2,500 people throughout the state, including sites in Charlotte, Greensboro, Raleigh and Wilson. The company posted $12.4 billion in revenue in 2015, and $1.6 billion in net income.

The most recent expansion included about 150 jobs in Charlotte as well as a new IT delivery and operations center. Company officials said the new center focuses on helping clients transform into digital enterprises by utilizing new technologies.

Cognizant helps banks and other financial-services firms analyze data generated by mobile and social computing in order to  streamline services. Some of Cognizant’s key innovations include its Emerging Business Accelerator. A key part of this initiative is digital technologies, in which the company’s research and development teams experiment with new software that studies and predicts customer behavior.

Several factors are driving demand for Cognizant’s services in the banking sector. In response to  the recession of 2007-09, central banks and government bodies have adopted policies to manage interest rates, raise capital requirements, impose new regulations and institute risk-mitigation measures. Such actions have curtailed some revenue sources and increased compliance costs for most financial institutions. Moreover, a growing number of institutions are adopting new digital technologies to change the way they interface with customers and employees and manage their operations.

AvidXchange: CHARLOTTE’S PROMISING FINTECH LEADER

Charlotte’s AvidXchange is one of the nation’s fastest growing financial-technology companies and already making a big mark on its hometown, with a majority of its 800 employees based there. “They are the poster child for fintech innovation and what we want to do in Charlotte,” says Dan Roselli, founder of Packard Place, a local business incubator.

Michael Praeger and David Miller started the business in 2000, just as the dot-com bubble was bursting. It grew modestly in its first decade as technology was modified and its business strategy adjusted to meet customer demands. Millennials moving into senior financial posts don’t understand why they pay bills in their own personal accounts via the internet, while so many businesses retain paper-based systems, Praeger says. “There was all of this noise around online bill payments involving consumers. But there wasn’t much talk about business bill payments.”

During its first 14 years, AvidXchange raised about $20 million, mostly from founders, private individuals and a former Charlotte venture-capital fund. Then, in 2015, the company attracted $225 million from some of the most successful U.S. tech investors: Bain Capital Ventures, Foundry Group, NYCA Partners and TPG Special Situation Partners. Board members of the growing company include Nigel Morris, a co-founder of Capital One Financial and Hans Morris, a former president of Visa.

A Wisconsin native, Praeger and his wife, Cindy, picked Charlotte as a place to build a business after tiring of the weather in Boston, where he worked for a venture-capital company and later started and sold two tech businesses. About two years after starting the firm with Miller, who retired in 2011, they added a software feature to help automate accounts payable processes at small and midsized businesses. It took time to catch on as Praeger built a sales force and customers learned the product’s benefit. Now company revenue is growing by more than 60% annually.

AvidXchange focuses on the 340,000 U.S. businesses with annual sales of $5 million to $1 billion, providing awesome growth potential, Praeger says. In 2014, the company spurned a South Carolina incentives offer, opting for a $10 million package from Charlotte and North Carolina that hinges on hiring 603 people from 2015-18.

To help attract young, tech-savvy workers, AvidXchange is building its headquarters at the N.C. Music Factory a mile north of downtown Charlotte. The new six-story building will have room for 1,000 people when it opens in mid-2017, including a mix of tech specialists and support services. Across the street from the new building sits a collection of bars, restaurants and entertainment venues in rehabbed textile manufacturing space.

“Creating a good work and life balance is important,” Praeger says. “We asked if we were creating the right space where [employees] want to spend so much of their time.”

Charlotte is an excellent place for AvidXchange to grow because its labor costs are lower than Boston, California and other tech centers, says Matt Harris, managing director of Bain Capital Ventures. In the major cities “scaling to 1,000 people is prohibitively expensive. Charlotte has a depth of high-quality talent and there is a great work ethic.”

Praeger has the skills to turn AvidXchange into a well-known tech leader, Roselli says. “Like all good entrepreneurs, Mike is focused and tenacious. He is scrappy and just finds a way to get things done.”