On the mature IT scene in the United States, Silicon Valley, NYC, and Boston have rightfully earned their reputation as thriving hubs for tech innovation. Yet, it looks like Texas is now becoming their worthy rival: at least when it comes to fintech solutions development and relevant expertise.
So what’s so special about Texas, and why does it have the potential to become the new U.S. fintech hotbed?
It’s not just about the number of fintech businesses freshly sprung in North Texas area: essentially, it’s about the collective efforts of Texas fintech companies/startups, investors, business accelerators, and, most importantly, academia, to create a collaborative environment enabling fintech industry to flourish.
“The collective firepower that exists in the community is the advantage set to propel fintech development forward,” Geoff Novak, VP of technology strategy and innovation for Comerica Bank
“I think Dallas is positioned — if you look at the number of Fortune 500 companies that are here — it’s a perfect market for leading that space,” said Mance Harmon, co-founder and CEO of the Hedera Hashgraph blockchain platform, while questioning Silicon Valley’s fintech leadership. “We chose Dallas, and we want to be at the forefront of that and want to help Dallas own that market.”
In other words, Texas is likely to become the next fintech hub, because so many people are working for it to happen.
Indirectly, this could be due to the incessant influx of Latin American immigrants and the increasing number of the unbanked population creating the demand for financial inclusion. One way or the other, Digital Banking Conference, a fintech event held in Austin, Texas in June 2019, has this year welcomed over 1,500 senior-level executives from financial organizations, credit unions, and fintech companies from around the globe. Clearly, Texas with its entrepreneurial spirit is embracing and supporting innovations.
FinTech In Texas: Use Cases and Startups
Let’s now closely examine the fintech landscape in Texas and take a look at successful fintech use cases and startups launched in the Lone Star State.
ModoPayments – a payment technology startup based in Dallas, TX. In 2018, the company that focuses on facilitating payments for merchants across the US has attracted over $16M in investments over a number of investment rounds.
BankMD – backed by bankers with medical experience, Bank MD is a digital banking brand based in San Antonio, TX. BankMD targets doctors and caters to their career and lifestyle needs. The company is now offering easy access loans and specialized underwriting and is planning to launch mobile deposits in the near future.
Gig Wage – a payment software vendor helping HR departments manage and assign compensations to contractors. The Gig Wage platform combines payment facilitation technologies with recruitment and retention features, and also helps freelancers track their income. Based in Dallas, TX, the company claims to be powering the future of work. Gig Wage has, indeed, tapped into a lucrative niche, since by 2020 nearly half of the US workforce will be independent contractors, according to some surveys.
EnergyFunders – an online platform helping customers invest directly into the main assets of the Texas state – oil and gas. Conversely, oil operators can access high-vetted US-based investments with just a few mouse clicks. Based in Houston, Texas, the company eliminates the middleman and boasts complete security and transparency.
Specifically, Austin, North Texas, has in recent years become an epicenter of fintech activity. As of 2019, as many as 25 fintech startups have emerged in the Texas capital, such as:
ScaleFactor – dedicated to helping companies save time, energy and money, Scale Factor simplifies bookkeeping and compliance management by offering a software solution that easily integrates into existing company ecosystem, automates routine tasks and accelerates business processes. By streamlining back-office operations, ScaleFactor software eliminates human error and helps businesses operate faster and more efficiently.
Skills Fund – is offering a radically different approach to student loans treating them as investments, and enabling all parties involved to share in the benefit. Partnering particularly with boot camps that teach coding and data science skills, Skills Fund helps overcome tech talent shortage, offer students accessible scholarships and claims to have already transformed 10,000 lives for the better.
Honest Dollar – is yet another fintech startup combining business and social initiatives, and offering an alternative approach to retirement planning. Having won $3 million in investments, the company helps workers streamline and manage their retirement savings.
Mozido – promotes financial inclusion by offering the unbanked population in the world regions like India, Africa, and China mobile fintech tools that connect them to merchants and online retailers around the globe.
Check out FinTech development outsourcing cases:
FinTech Developer Salaries In Texas
Understandably, with such an overwhelming boom of fintech activity, software developer salaries in Texas are also bound to increase. On average, the annual tech salaries in Austin depend on a job role (like anywhere else) and currently amount to:
- Software developer/engineer: $122,443
- UI and UX Design: $100,690
- Data analytics: $105,954
- Product Manager: $113,706
These figures outline average base salaries, excluding the amount of additional compensation and remunerations. Texas fintech ecosystem is rapidly developing; currently, the Lone Star State hosts a number of fintech conferences and events enabling fintech professionals and stakeholders to network and share ideas.
FinTech Events In Texas Worth Attending
Below are some of the regular annual events totally worth visiting in 2019-2020:
Digital Banking – the digital banking conference held each summer in Austin, Texas, focusing on AI, mobile and blockchain technologies for both U.S. and international attendees.
Pushpay Summit – hosted by Pushpay, a fintech app designed to financially empower churches, the conference takes place in Dallas and offers inspiration and practical tips for ministry professionals.
Retail Banking – taking place in Austin, TX, this event focuses on strategy and technology in banking, with emphasis on data science and its transformative power and potential.
FI Fintech – a free conference for financial institutions scheduled to take place on November 12, 2019, in Fredericksburg, TX.
While most of these conferences have already taken place this year, we strongly recommend that you keep an eye on them and attend next year.
Fintech Challenges in Texas
In Texas, particularly in North Texas cities Austin and Dallas, fintech is showing impressive growth dynamics. Yet, to fully grow and develop, Texas fintech industry has to come up with creative solutions for meeting its current challenges.
Lack of FinTech developer talent
Texas fintech companies are hiring, and you may find a plethora of open vacancies on local websites like builtinaustin.com. While businesses are ready to offer salaries and compensations rising above the average mark, the talent shortage is still quite substantial.
Lack and/or high cost of domestic expertise
The direct outcome of talent shortage, a lack of domestic expertise is also hindering Texan fintech industry growth. Startups like SkillsFund, for instance, revolve around the idea of fostering local talent, although, meeting the job market demand is definitely going to take a while.
Just take a look at fintech developer salaries above! While well-established financial service companies can afford to hire such expensive talent locally, fintech startups are often pressured by investors to save software development costs and do more for less. Outsourcing fintech solution development to resource-rich yet lower-cost countries like Ukraine can help fintech startups build an MVP fast and cost-effectively and use it for raising extra funds for the full-fledged product development.
One thing is for sure–despite the existing challenges, Texas, with its thriving oil and gas economy, an impressive list of Forbes 500 companies and business acumen is a likely candidate for becoming the hotbed for U.S. fintech R&D and innovation. Given the support from local academia, investors and business community, attracting offshore talent could give the industry a final boost needed for Texas to propel to the worldwide fintech leadership.