Technisys is SoFi’s (NASDAQ: SOFI) latest acquisition in digital banking. It provides the resources for banks, lenders, financial services firms alike — handling the digital infrastructure required in the background to build efficient financial companies’ platforms.
What does Technisys do?
It serves retail, commercial, and corporate banking segments. Technisys operates two core products — Cyberbank Digital, and Cyberbank Core. Cyberbank Digital permits the creation of digital experiences and ecosystems, and Cyberbank Core allows the creation and refinement of existing products and services to cater to customer needs.
Technisys also has cybersecurity services that allow companies to identify potential threats and breaches and give its customers the resources to make changes and improvements to their platform in a time-efficient manner.
The financials behind SoFi’s Technisys deal
SoFi will acquire Technisys in an all-stock acquisition valued at $1.1 billion, allowing it to retain its cash reserves in a turbulent market environment. The existing CEO at Technisys, Miguel Santos, will continue to lead the company as a separate entity.
Technisys is expected to generate between $75 million and $85 million in cost savings for SoFi from 2023 through to 2025, and $70 million in the years proceeding. Based on incremental growth projections, Technisys is also expected to add between $500 million and $800 million to SoFi’s total revenue from the date of acquisition until 2025.
What does SoFi’s Technisys acquisition mean?
This acquisition slides in reasonably well with SoFi’s existing array of products. The matchup is a solid complementary business to SoFi’s existing Galileo platform, which handles payments, transactions, and the issuance of debit and credit cards for neobanks like Dave, Chime, and Revolut. Although operating separately, SoFi is building the backbone of digitization the financial services sector is undergoing, while strengthening its own banking business.
Another plus is geographic diversification. It will expand the company’s footprint in the U.S. but other large new markets such as Brazil and Canada are noted as key divisions for Technisys’s 60 established customers across North America and Latin America.
SoFi is still a little fish in a large pond when it comes to banking — compare its roughly 3 million users with the likes of Bank of America, with a 67 million-strong small business and consumer client base. That’s a world of difference. Add on the advantages industry behemoths have in relation to capital resources and it’s evident SoFi needs to think outside the box before taking the big guys on head-on.
But it looks like that’s what it’s doing. Not just aiming to become a leading consumer-centric fintech, but also becoming a digital banking as a service provider. SoFi isn’t just trying to scoop up market share from traditional lending leaders anymore, it wants to have them as customers.
Financial Writer at MyWallSt
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