Q2 Holdings announced Monday that it is buying Gro Solutions in an effort to improve customer onboarding at the fintech.
In an interview, Gro Solutions CEO David Eads said too many banks develop digital banking and lending products without a clear path for prospective customers to engage with those same offerings.
“Banks work so hard to get a click,” Eads said. “And then the click goes to the bank’s home page, and it’s up to the customer to root around. In e-commerce, when you click on a link, it goes to a very specific product right for you.”
Gro's solution to that problem made it attractive to Q2.
“Having the best practices of e-commerce, coupled with best practices in digital banking and loan origination, putting that together in a data-rich platform to ensure the right offer, to the right person, at the right time, that is powerful,” Eads said.
The price of the deal was not disclosed. Most of Gro’s development team will remain in its headquarters of Atlanta, though some may shift to Q2 offices. Q2 is based in Austin, Tex., but works in Atlanta on legacy banking solutions.
Q2 recently acquired the lending and leasing platform Cloud Lending. “We been fairly active in acquisitions of late,” said Travis Arthur, Q2’s vice president of marketing.
Gro appealed to Q2 partly because it was a good cultural fit, Arthur said, but also because its tech addressed the shortfall in sales execution his firm has noted among banks.
“We are adding sales and marketing techniques to the banking repertoire, so banks not only are serving customers, they are able to acquire customers, and we can reach better financial inclusion while growing bank profitability and assets,” he said.
Arthur said the sales and marketing and onboarding features Gro will bring to the Q2 platform will appeal to banks as small as $500 million in assets as well as those with up to $30 billion: big enough to want to move into new markets and develop new solutions, but lacking the resources to do so.
“That is a good sweet spot where a lot of innovation is happening in the American market,” Arthur said.
He acknowledged another impetus for the deal: the demands customers are putting on financial institutions of all sizes. “The expectations for bank customers are being set by Amazon and Airbnb, not by other banks,” he said. “The more barriers or friction to trying to open any account is just another reason to drop out of the cycle.”
Arthur said his company is constantly looking for innovative technologies to invest in. Unbill, a utility billing app, and the online savings bank Smartypig are two such properties it acquired.
“We’re being thoughtful about" acquisition strategy, he said. “We’re not on a spree."
