Finxact, a back-end technology provider for banks, recently raised $30 million from investors such as Accenture Ventures, SunTrust Bank and the American Bankers Association, a trade group for U.S. banks, according to a report from Reuters.
The outlet adds that existing investors in the fintech startup also participated in this funding round, including Live Oak Ventures, First Data Corp, Woodforest National Bank and T.N. Incorporation Ltd of Thailand.
“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.”
“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 of the firm’s North America Core Banking Practice, in a press release. “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.”
Finxact CEO Frank Sanchez told Reuters in an interview that plans for funding include technology and operations.
Reuters examines this investment in the context of banks suddenly in dire need of a technology infrastructure overhaul to serve customers who have come to expect a seamless digital experience. Expensive back-end IT often derails efforts from smaller banks seeking to compete with fintech upstarts and large banks who can afford these updates. Sanchez told Reuters these community and regional banks are their target customers.
“I have heard from bankers across the country who wish they had more nimble and agile core processing platforms that allowed them to keep pace with customer demands,” ABA President and CEO Rob Nichols said to Reuters via email. “We understand that a bank’s ability to innovate is highly dependent on its core processing platform.”
