SoFi Acquires Technisys, A Digital Cloud-Based Core Banking Platform

February 28, 2022
SoFi Acquires Technisys, A Digital Cloud-Based Core Banking Platform
SoFi had been using Technisys since last year, said Miguel Santos, CEO of Technisys.

SoFi Technologies will acquire Technisys, a leading cloud-based core banking system in an all-stock transaction valued at approximately $1.1 billion. SoFi had been using Technisys since last year, said Miguel Santos, CEO of Technisys.

“Technisys has built an attractive, fast-growth business with a unique and critical strategic technology that all leading financial services companies will need in order to keep pace with digital innovation,” said Anthony Noto, CEO of SoFi. “The acquisition of Technisys is an essential building block in delivering on our member-centric, digital one-stop-shop experience for SoFi members and our partners through Galileo, our provider of fintech cloud services.”

The entire fintech management team is staying, Santos said.

“Its an all-stock deal so it is a huge bet on both sides. We know our tech is there, and it is kind of unique. Now we have the possibility of fulfilling the dream, and making a transcendent technology and generate value for all the stakeholders.”

Technisys has clients in almost all Latin American countries, Santos said, and two implementations in the U.S. — TAB Bank in Utah and Rellevate, an early wage access platform. With so many banks running on core systems that are 20 or 30 years old, added Santos, banking presents a huge opportunity.

“Every bank or other financial institutions really needs to go to modern technology. Legacy systems are slow to create new products and expensive to maintain.”

SoFi anticipates significant operational savings as it migrates off multiple core banking systems it now operates onto Technisys, the company said in its announcement.

“It expects to be able to innovate even faster, perform more real-time decisioning, and offer greater personalization for its more than three million members.”

Technisys is cloud agnostic — it can run on Google, Amazon’s AWS or Microsoft Azure, or on-prem/proprietary clouds, he said, which is useful for countries that require that customer data be kept within the national boundaries.

The company’s management is distributed, and was well before Covid, Santos added. He is based in Madrid, their chief product executive is in Toronto, the chief sales offices is based in Jacksonville and compliance is in Uruguay.

“For us the pandemic didn’t change anything.”

The company has recently added three people to expand in Europe.

One North American client that will be dropped from the Technisys roster is ATB Financial which announced in December that it would shut down Brightside, a digital financial wellness app it had founded two years ago using Technisys technology.

The announcement was accompanied by cheery language:

“We’ve been thrilled to see how Brightside has helped you and so many others across the province take control of your spending and save for what you love.

“Two years ago, we proudly introduced an all-new banking app by ATB to Albertans. However, even with the success, Brightside has had, we’ve come to a critical point when it comes to our ongoing investment in both Brightside and ATB’s main digital banking experience.”

The banks will shut down Brightside to focus on ATB’s digital banking.

ATB declined to discuss the decision or the announcement. The bank has been running on SAP banking software, which has spawned a couple of amusing YouTube videos.

Santos said he expects Technisys will be a strong contender when ATB selects a digital platform for the bank.

“As they are happy with the platform, which reached practically 100% uptime in these years, I am optimistic they will consider it for the mothership when it is time to replace the SAP banking core the bank is using.”

SoFi acquired Galileo Financial Technologies, a financial services API and payments platform in 2020.

In its announcement, SoFi said “Together, Galileo and Technisys are expected to enable the combined company to meet both the expanding needs of their existing partners, as well as serve additional established banks, fintechs and non-financial brands looking to enter financial services.”