The American Bankers Association recently announced a direct investment in Finxact, an emerging technology company that offers an innovative, open core banking platform for financial institutions. The investment in Finxact reflects ABA’s commitment to ensuring that member banks have the technology and tools they need to make the transition to banking’s digital future, according to a release from the organization. The association’s board of directors, acting on a recommendation by ABA’s Venture Investment Committee, approved the investment.
Per ABA, Finxact’s unique Core as a Service platform, built for financial institutions of all sizes, enables banks to be more nimble and innovative by quickly adding new customer experiences and services to their core banking operations. The platform’s SaaS, cloud-native model allows banks to make proprietary enhancements and custom configurations, while also giving them 100-percent access to their data.
“We believe the team at Finxact is bringing to market not just a new core product but a new model for banks to deliver enhanced customer experiences,” said ABA President and CEO Rob Nichols. “ABA is pleased to take part in this historic opportunity to chart a new path for core banking services. We see this as an investment in the future of banking that will foster innovation and allow our members to adjust quickly to changing customer demands.”
“We appreciate the confidence ABA is showing in our business and technology to galvanize our shared vision of near-team and visionary change for the industry,” said Frank Sanchez, Finxact’s CEO and founder. “Our goal is to provide banks of all sizes a modern core banking platform that is functionally robust, reliable, scalable and highly efficient, and this partnership will help accelerate our go-to market.”
Nichols noted that ABA members have frequently expressed frustration with core processing limitations since he took over as president and CEO three years ago. ABA’s investment in Finxact follows a letter Nichols sent in October 2018 to the CEOs of major core providers asking them to empower bank with the modern technology demanded by today’s competitive marketplace. Nichols also recently formed a Core Platform Committee, which is composed of bankers charged with identifying concrete ways to address these challenges.
“We are looking at every avenue — whether it’s investments in companies like Finxact, working with other core providers or endorsements of new products and services — to help all banks keep pace with the digital banking revolution underway,” said Nichols. “This commitment will help keep our members on the cutting edge and allow them to provide their customers the banking services they will want and need in the future.”
Based in Jacksonville, Fla., Finxact launched in 2017 and has secured multiple rounds of private funding from a range of strategic investors.