With the acquisition, Fiserv will enhance its digital financial services portfolio. Here are the top-line bullets you need to know.
Fiserv, a financial services tech company, has acquired Finxact, a core banking software developer, for $650M. The transaction is expected to close by the end of 2022.
WHO ARE THE PARTIES TO THE DEAL?
- Finxact: Florida-based Finxact offers a Core-as-a-Service platform with an open banking API that allows banks to offer new services to omnichannel customers. Some of the startup’s clients include FirstBank, First Horizon Bank, and Woodforest National Bank. Finxact is supported by a team of 140 employees that will join Fiserv upon completion of the acquisition.
- Fiserv: Wisconsin-based Fiserv offers a variety of financial services solutions, including customer and channel management and processing services. Fiserv has 12K+ clients, including nearly 10K financial institutions, across 100+ countries. Fiserv has about 100M digital banking users and 1.4B global accounts on file. The company reportedly generated $16.2B in revenue in 2021, up 9% year-over-year. The fintech company had over 44K employees as of December 2020.
Source: Finxact
WHY DOES THE MARKET MATTER?
- The global open banking market is expected to reach a value of $43.2B by 2026, growing at a CAGR of 24.4%, according to Allied Market Research.
- The increasing adoption of online banking applications, particularly amid the pandemic, has contributed to the market’s growth.
- Given that software developers are in short supply, businesses are turning to pre-built open banking tools for application development.
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