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REVIEW SUMMARY
Company: Fintech
Industry: Business-to-business electronic funds transfer
Key: Getting clients' vendors paid securely, on time and at less cost.
Fintech.com started in 1989 as a business-to-business technology company that helped clients reduce paperwork by paying vendors electronically.
It served a variety of industries and competed with large companies such as First Data on credit card payments.
When Scott Riley, an entrepreneur and investor in the company, took over as chief executive officer in 2005, he believed it could be more successful focusing on one niche: payments to beer, wine and spirits distributors.
What happened next: Annual revenue growth of 20% to 30%; a move to a new corporate headquarters in Tampa; and a host of large clients seeking efficiencies, including Wal-Mart, Kroger, Costco, Outback Steakhouse and Publix.
"We were trying to be all things to all people," Riley says. "This was an opportunity. There was a need. And it was being overlooked."
The company calls its service "invoice settlement solutions," and it now serves convenience, grocery and drug stores; restaurants; mass merchandisers; stadiums and institutions; and hotels.
Fintech.com.com handles more than 135,000 buyer/seller relationships daily. This service is designed to save time and invoice processing costs and improve the reliability and manageability of data.
Business should always drive technology, not the other way around, Riley says.
"The most successful companies design products on the needs or wants of the consumer," he says. "Technology is obviously taking a big step, but great technology isn't worth anything if there's no business to apply it to."
Technology also makes for easy math. What takes 50 Fintech employees to do today took 200 to 300 people years before, thanks to the efficiency from Sisco servers and Microsoft processers.
Technology, timing and persistence has helped Fintech continue to grow in the current economy. It has worked to earn legal approval for its service from 49 states, which have different liquor laws.
It has companies like Ker's WingHouse, BP Oil and Hooters, but more business is out there. Specifically, half a million more liquor licenses. And the number is growing.
"People are still drinking, in good times and bad," Riley says. "Like a hockey puck, we hit a certain penetration, now many want to be part of the scenario. We've been around for a while, so penetration drives growth rate."
Entrepreneurial lifer
Riley, 55, calls himself a serial entrepreneur. He grew up locally in Indian Rocks Beach, served in the Air Force and got a degree in mass communications and a minor in industrial psychology from the University of South Florida.
He started an advertising firm and sold it to a company in New York. He built a broadcast group and worked on establishing the GTE Grand Prix.
Riley also co-founded Parker Communications Network Inc., a satellite-based monitor system distributing commercials to large grocery chains throughout the country for companies such as Coca-Cola, General Mills, Procter & Gamble and Nabisco.
He also started In Store Media, which worked with such major grocers as Publix, Kroger, and Albertson's to merchandise their private label products.
Riley was enjoying early retirement-investor status before his partners at Fintech, Tampa's Parker family, who own the Pepsi distributorship, asked him to run the company.
"The industrial psychology I studied was helpful," Riley says. "It helped in dealing with people. That's a lot of what business is about."
Not everyone knew Fintech when he took over, which frustrated Riley, a former marketing executive.
"Some people wondered if we were dolphin trainers," he says. "Now they know us."
Carving a niche
Part of the reason for Fintech's niche growth is that the cost for retailers in setting up their own electronic payment systems for liquor vendors is high. There are hundreds of liquor suppliers. Each needs to interface with the retailer's payment system in a different way.
"The alcohol industry is so chopped up," Riley says. "They would have to build a Fintech.com. About 1,300 liquor distributors interface with our accounting software systems. It is very complicated for a retailer to leave us."
The other alternative for retailers is the old-fashioned way: paper checks. That is a much slower and process that introduces more chance for errors.
"Our system is like a paycheck going right into your bank account," Riley says.
But with this business comes risk, which means lots of sensitive information that could be exposed to hackers or hurricanes. That's why Fintech has backup servers and a disaster recovery site in North Carolina, running parallel to its Tampa servers, so it can keep operating, 24 hours a day, seven days a week.
The privately held firm has had 20% to 30% annual revenue growth, even in this slower economy. And Riley believes it can grow faster. It is processing $40 million to $80 million in liquor bills a day.
"Fourty million dollars is a slow day," he says.
Execute the chemistry
Riley knows that Fintech needs to go beyond hiring good people and providing good service as a corporate strategy. But he believes many firms don't do those basics.
"There's a big difference between talking about it and doing it," he says. "You have to have a structure, with good SOP (Standard Operating Procedures). You have to connect the dots."
Successful firms need not only good people, but good people that communicate well and get along. He retained an IT person who moved to Budapest because Riley valued that person. Another IT code writer lives in North Carolina.
"If someone is causing pain and disruption, you have to get rid of that person," Riley says. "I trust our managers to know their areas. The only thing I do is I have to sign off on the final thing, to make sure they are our type of people. One bad apple spoils batch."
His other management strategies include keeping it simple with employees and customers and listening to employees and customers for ways to improve Fintech. If a CEO doesn't talk to his staff or customers, he becomes detached and can make poor judgments, Riley says.
"We tend to get egos," he says. "Will the customer buy it? Maybe. Get input. Get specifications from customers and build it. The philosophy behind building a good staff is getting great people to make sure you have a working team. You need to make sure they benefit from your success."
That's why Fintech rewards customer service people with bonuses.
"I want operations people as excited as sales guys," Riley says. "There are incentives for adding more locations."
Still learning
The biggest lesson Riley has learned as CEO is the importance of being consistent and fair. But he's not sure if he's fully learned it.
"It involves understanding the strengths and weaknesses of the staff, but you also have to really know your own strengths and weaknesses," he says. "You need analytical, numbers people and creative people. It is a neat mix to have."
Those people will be leading Fintech into the future, which will likely mean new services.
The company is seeing a big trend in retailers wanting more and more sales data, more quickly. Publix wants to how many bottles of Michelob Light sold in the past week. It helps the Lakeland company become more efficient in buying and stocking.
"We'll be developing things to take advantage of this," Riley says. "That's where the future is."
Security will continue to be a concern, although Fintech is audited constantly by states and retailers and has enhanced its security encryption.
"We've never lost a dollar in 15 years doing this," Riley says.
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