SoFi continues to expand its infrastructure technology through its acquisition of Technisys. In addition to SoFI’s core front-end consumer banking app, the move solidifies their deeper investment into back-end systems following the previous purchase of Galileo. As mentioned in the Motley Fool, Anthony Noto, SoFi CEO, believes these acquisitions put SoFi in an advantageous potion to support client needs.
Pairing Galileo with Technisys could create a very strong combination and help SoFi on its mission of becoming the Amazon Web Services of fintech, in which it could provide all of the plumbing necessary to meet any of the needs of a fintech company or bank. One synergy pointed out by SoFi Chief Executive Officer Anthony Noto on a conference call is that SoFi can cross-sell Technisys products to Galileo’s 100-plus partners and vice versa with Galileo to Technisys’ 60-plus customers. Noto explained that there is good reason to believe that these partners would support one another because both are focused on back-end infrastructure:
“In evaluating SoFi’s needs, we concluded that many Galileo partners would also need an extensible, customizable multi-core product. The vast majority of Galileo’s existing partners want to offer lending, credit cards, rewards and many other products but they can’t extend their current core. Building separate cores for new products risk the same siloed issues we see in legacy banks and architecturally would be a step backwards.”
SoFI’s investment into core processing helps to power digital banking alternatives to legacy companies, such as Fiserv, that are also investing in the space as noted by Fiserv’s recent acquisition of Finxact. The key difference for SoFi will be its positioning in both the consumer backing and back-end processing spaces.
Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group