APRIL 11 2024
Nordic Capital, one of the most active and experienced investors in Technology & Payments globally announced three strategic investments within the Financial Software sub-sector during February and March 2024. “Regulatory requirements and increased pressure on financial institutions to digitalise have been key drivers behind these investments”, said Fredrik Näslund, Head of Technology & Payments at Nordic Capital.
After many quarters of market diligence and sourcing, spring 2024 saw a hat trick of investments in this space for Nordic Capital. In the beginning of the year, Nordic Capital acquired Zafin, a Canada-based provider of global SaaS retail bank core modernisation and transformation solutions. This was followed by the acquisition of ActiveViam in February, a company specialising in advanced analytics and decision-making solutions for the capital market side of financial institutions. By the end of March, Nordic Capital announced the signing of the acquisition of One Inc, a digital payments platform focused on modernising the insurance industry in North America.
“Despite the fact that all these companies have different products and are targeting diverse clients within banks and financial institutions, these investments tap into broader industry trends such as automation and digitalisation of work flows and increased regulatory requirements which are affecting the entire financial market, said Fredrik Näslund.
Increased advantages and pressure to digitalise
McKinsey[1] reports that approximately 73 percent of the world's interactions with banks now occur through digital channels, underlining the significance of this trend. Zafin aligns seamlessly with this digitalisation trend, serving a wide selection of financial services organisations, including some of the world's largest banks and credit unions. Similarly, ActiveViam enables Tier 1 and Tier 2 banks to increase real time control over capital markets activities and automise regulatory reporting. One Inc targets the insurance sector, its focus on modernising operations and digitising work flows significantly simplifying and improving the end customer experience. The rise of instant payments is certain to significantly impact the insurance industry, with 23 % of consumers in the US expressing a preference for instant insurance pay-outs, as reported by PYMNTS[2].
"One Inc. is automating the insurance sector with its digital and integrated payment network tailored exclusively for the industry. Focusing solely on insurance, One Inc. empowers carriers to modernise their operations, reduce costs, bolster security, and elevate customer experiences," said Fredrik Näslund.
Regulatory requirements
The regulatory landscape is complex, vary across geographies and changes over time presenting banks and financial institutions huge challenges to ensuring continuous compliance across markets. One example of this is the tight deadline facing large US banks until mid-2025 to implement the Fundamental Review of the Trading Book (FRTB) regulation. The regulation aims to standardise risk measures across credit, market, and operational risk for large banks increasing the regulators control over the US banking landscape. ActiveViam, with its focus on addressing financial institutions risk management and regulatory compliance needs in the era of big data, is well-positioned to navigate these challenges.
