Avaloq acquired by Japanese company NEC Corporation

By Edil Corneille

Today, Japanese multinational information technology and electronics company, NEC Corporation announced the acquisition of Avaloq, a Swiss financial software company. The acquisition of Avaloq will provide NEC with digital finance software and domain knowledge as it enters into the field globally and strengthens its business in the digital government field. The acquisition is expected to be worth 2.05 billion Swiss francs and is to be completed by April 2021, following the confirmation of necessary procedures and approvals for each organisation.

NEC’s biometric and AI technologies are helping the expansion of business globally, mainly in the digital government field. The technologies help to promote safe, secure, fair, and efficient communities. NEC is now shifting more attention towards SaaS business models that utilise software capable of being horizontally deployed.

“NEC will be placing great importance on building long-term relationships with Avaloq and its customers, and aims to create new solutions that combine Avaloq’s software with NEC’s cutting-edge technologies, such as its brand of biometric authentication solutions, “Bio-Idiom,” the company’s AI technology brand, “NEC the WISE,” and its innovative blockchain technologies,” said Takashi Niino, President and CEO, NEC Corporation. “NEC will also promote global sales expansion of Avaloq’s software by taking advantage of NEC Group sales channels, including KMD, a leading European software and IT services provider that NEC acquired in February 2019.”

Avaloq is a digital banking solutions provider and has a reach across over 150 customers in 30 countries worldwide. Avaloq’s business growth is partially driven by recurring business from the provision of software as a service (SaaS) and business process as a service (BPaaS) for wealth management and other applications. The company is said to hold the top market share in wealth management software within Europe and the Asia Pacific.

“The Avaloq team is delighted to be joining the NEC Group, a highly trusted and well-respected company with a long heritage, which will help further enlarge our geographical footprint across the globe,” said Juerg Hunziker, CEO of Avaloq. “Due to very similar values of professionalism, reliability, quality and excellent service for clients with a focus on precision, we firmly believe that this union will be a successful one for all involved and we are looking forward to an exciting and fruitful cooperation. The whole Group Executive Board at Avaloq is committed to driving forward our growth strategy and we are very glad to have a strong partner on our side who supports our long-term vision and offers us continuity, stability and an exciting future of accelerated growth in new markets. With NEC, Avaloq found a perfect new home to continue our success story of serving our clients with solutions that make their lives simpler in an ever more complex world.”

In recent years, Avaloq has worked with FinTech startups and other partners to aggressively promote digitisation through AI, blockchain and other technologies as part of capitalising on new service needs brought on by open banking, particularly in Europe.

NEC will acquire software and domain knowledge in the digital finance field through the acquisition of Avaloq while strengthening its business in the digital government field. The company aims to expand its business and improve profitability, mainly in the digital government and digital finance areas, by globally developing SaaS business models that utilise software and technologies from throughout the NEC Group.