Finastra Sells Mid-Market Banking Business to Software Aggregator CORA

Finastra says software acquisition company CORA Group has purchased its U.S. mid-market banking business.

The deal, announced by the FinTech on Wednesday (June 3), covers brands including the Phoenix Core Banking System, MalauzAi Digital Banking, Analyzer IQ, and Enterprise Content Management.

“Finastra’s U.S. Mid-Market business is exactly the kind of company we look for — strong products, loyal customers, and people who really know their industry,” Denis Brosnan, portfolio CEO of CORA Group, said in a news release.

“We don’t acquire businesses to change what’s working. We give them a permanent home, the resources to keep delivering, and the space to stay close to their customers. That’s exactly what we plan to do here.”

According to the release, the solutions in question are “mission-critical” pieces of software used by hundreds of U.S. banks and credit unions. For example, Phoenix helps banks and credit unions attract new account holders, and scale as business and regulatory demands evolve.

The release added that the U.S. mid-market business will operate as a standalone company with its existing products, people, and customer relationships in place, backed by CORA parent Constellation Software and its platform.

“We believe this move sets the U.S. mid-market business up to thrive,” said Chris Walters, CEO of Finastra. “CORA Group’s long-term approach is the right fit for this business and its customers. For Finastra, it sharpens our focus on the areas where we lead and where we can deliver the greatest value.”

PYMNTS spoke last week with Mihail Duta, director, global solutions consultant, payments, at Finastra, about the pressures facing banks as they move from legacy payment systems.

“Legacy solutions continue to do what they were designed to do. But I believe we’re reaching a point where they’re struggling to keep up with the ever-changing trends and other initiatives in payments,” said Duta, interviewed for the May edition of the “What’s Next in Payments” series, “When Legacy Becomes Leverage.”

As instant-payment rails proliferate, ISO 20022 modernization speeds up, and artificial intelligence begins transforming operations, banks and technology providers are facing a difficult question: Can the institutions that created the payments system evolve quickly enough to remain a central part of that system?

“Legacy solutions have done what is needed to reach the minimum necessary to be able to produce ISO-formatted messages,” Duta said. “But it hasn’t been easy.”

More importantly, he argued, last year’s ISO 20022 migration was not a one-time event.

“The ISO journey just started. It didn’t start and end on July 14.”