Finxact, the emerging leader in SaaS core banking, today announced it has raised $30 million in equity financing from new and existing investors. New investors include the American Bankers Association (ABA), Accenture Ventures, SunTrust Bank, and other strategic industry leaders. Also investing in this round are all of Finxact's existing investors, including Live Oak Ventures, First Data, Woodforest National Bank, and T.N. Incorporation Ltd (TNI) of Thailand.
The new funding will support Finxact's growth as it completes development and builds scale to match the market's demand for a new category of core banking platform. Finxact's Core as a Service represents a first-of-its-kind option for banks to efficiently differentiate their customer experiences by seamlessly integrating new services and migrating to a real-time digital banking enabled system of record.
"We started Finxact in the beginning of 2017, and we have focused on building a banking system of record that can effectively replace legacy core systems and also serve as a platform for rapidly evolving digital banking requirements," said Frank Sanchez, Finxact CEO and founder. "We've developed a platform that is functionally robust, reliable, scalable and highly efficient. We have multiple customer implementations currently underway and have raised capital to expand our capacity to go to market on a broader scale. We also plan to expand our integration activities with the financial services ecosystem and to mitigate the risk and complexity historically associated with core system migrations."
To date, innovations around core banking have been lacking, especially as it relates to building new core technology from the ground up. As a result, many financial institutions are burdened with antiquated high cost systems and the inability to react to rapidly evolving customer demands. Finxact's approach to core banking goes beyond simply providing the industry with modern technology, to fundamentally changing the way financial institutions and vendors will engage and operate with one another.
"Bankers know that innovation is essential to remaining competitive, yet I've heard time and again that their relationship with their core provider can make it difficult to be agile in selecting products and partners," said ABA President and CEO Rob Nichols. "We are confident that the impressive team at Finxact will challenge the entire industry, including banks and their providers, to think differently about the way a core platform enables a bank to innovate."
Finxact and its partners share a vision to provide transformative solutions for every bank. Together with its partners, Finxact is delivering a new category of banking platform, which will be technologically available and economically valuable to banks of all sizes and types. Finxact's ecosystem brings together best-of-breed modern technologies and practices to deliver commercial and technical scale that is required for all banks to compete and grow.
"The core banking market in the U.S. is set to experience significant disruption in the near future, as banks continue to grow frustrated with their existing core providers and advances in cloud and digital technology make it possible to upgrade aging systems without doing a full rip and replace," said Brett Goode, a managing director at Accenture and head if the company's North America Core Banking Practice. "We are pleased to invest in and form a strategic alliance with Finxact, enabling us to jointly bring our clients innovation that will help them transform to meet the digital needs of today and tomorrow."
"The Finxact core is designed to address the entire marketplace from community banks and credit unions to the largest money center banks," said Michael Sanchez, President of Finxact. "As we transition from our initial development phase to market delivery, we are working with our service partners in each segment to develop a new set of best practices that not only reduce the risk of transformation but also the implementation cycle time."
Finxact's core banking platform is providing the industry with a regulatory compliant system of record for processing core banking transactions. As a result, partners and customers now have a platform for quickly creating new customer experiences and services using a highly accessible and customizable platform.
Chip Mahan, Chairman and CEO of Live Oak Bancshares, the holding company for Live Oak Ventures and Live Oak Bank said, "We aim to revolutionize banking and Finxact provides the technology and data that today's financial institutions need to succeed in a modern world. Frank Sanchez and his team have created a new core banking industry standard that is open and progressive which is why we are proud to invest once again in Finxact's mission."
Finxact is working with best-of-breed partners that bring an entire set of banking services which are being seamlessly integrated into Finxact's Core as a Service. What is different about the approach now, is that Finxact's platform is enabling partners to deliver an end-to-end SaaS solution, meaning more rapid time to market, lower operating costs, and a more compelling value proposition to the industry.
Chris Foskett, Executive Vice President of First Data said, "Finxact has made great strides in redefining what core processing is, how it is delivered, bolstering the value it drives for banks and consumers. First Data remains committed to Finxact and its leadership as the company innovates open core banking platforms with Finxact's Core as a Service."
Finxact was founded by the same team that launched the first real-time banking systems on the eve of Internet banking, and is built on more than three decades of building and operating regulatory compliant core banking systems. The company is currently working with multiple U.S. and international financial institutions, from de novo banks to top-tier banks, on projects ranging from full bank conversions to digital-only initiatives.
About Finxact
Finxact is innovating the first enterprise class cloud-native Core-as-a-Service platform with a 100 percent accessible open banking API. Finxact's modern architecture enables banks to rapidly deliver new experiences by creating products on demand and integrating new services as needed. The Finxact team has been at the forefront of banking software for 35+ years, and together with its best of breed partners is disrupting core banking so financial institutions can truly transform on their terms. Learn more at www.Finxact.com.
