Finastra, the new megavendor, to use IBM’s cloud for core banking

Finastra, the company formed by the merger of the bank technology vendors D+H and Misys, will run a digital banking and core processing platform in IBM’s cloud, the companies said.

The announcement follows the completion of the merger, an arrangement that had been in the works since March, when Vista Equity Partners, Misys’ owner, announced a $3.6 billion deal to buy D+H. The deal closed in May.

Cloud-based core banking isn't unheard-of. Several providers have hosted cores for several years now. But there is a crop of new companies, including Nymbus and Finxact, hoping to disrupt the current core banking landscape through cloud-based systems that run on application programming interfaces.

Harry Chambers

“Our open architecture and open approach enables us to embrace a wide ecosystem of partners, and as we enter a new era of banking where collaboration is a must," Finastra CEO Nadeem Syed said in a press release.

"Our relationship with a dominant player like IBM can extend our product offering and enable clients to access enhanced transformation capabilities,” Syed added.

Misys created FusionBanking Essence several years ago to enable faster and easier banking on mobile devices than the industry’s creaky legacy core systems could. To soup it up further, IBM will offer multiple APIs connected to Watson, Big Blue’s cognitive computer; give cognitive capabilities to Finastra’s products; and support Finastra as it develops retail banking proofs of concept and product demos. The companies will also collaborate on financial crime prevention and a blockchain-based offering.

“We envision using our combined strengths to impact more organizations, from the largest banks to the newest crowdsourcing lender, to help them harness the disruptive power of cloud, cognitive and data,” David Wilson, a vice president at IBM Cloud Business Partners, said in the press release.