Global wealth management platform FNZ has added Swiss fintech company New Access to the list of strategic acquisitions it has made worldwide in recent years. The organization appears to be strengthening its wealth-tech capabilities in order to make its offering more robust and enter new markets.
But the thing that makes the continued expansion of FNZ truly stand out—and why wealth management vendors and wealth managers should pay attention—is its operating model.
FNZ operates as both a Platform-as-a-Service (PaaS) and a business process outsourcing (BPO) provider, combining the Software-as-a-Service model with trade processing and asset custody. Its growth has been tremendous; FNZ now has more than US$1.5 trillion assets under administration.
The variety of delivery model options for core banking vendors can spur new opportunities and pockets of innovation for wealth managers—PaaS, BPO, and SaaS are all on the table. FNZ has plugged an essential gap in its capability set with New Access’s Apsys Core Banking System. By doing so, it can show up even stronger to serve wealth managers through its array of offerings.
Seven Reasons to Watch FNZ Closely
The acquisition of New Access shows that FNZ has no plans to slow down its expansion of offerings. Here is why the deal matters along with some reasons to keep an eye on the company’s next moves:
- The deal to buy New Access extends FNZ into the core banking wealth market that was analyzed in Aite-Novarica Group’s recent report Aite Matrix: Wealth-Management-Focused Core Banking Systems in Europe and Asia. Its focus on “core-to-digital” functionalities and managed services model is in keeping with FNZ’s business model. Look for it to expand aggressively from the Swiss roots of this acquisition.
- While other big core banking software vendors that cater to the wealth management sector are largely technology providers, FNZ acts as a technology firm as well as a regulated financial entity (by the U.K.’s Financial Conduct Authority). This is a maximalist interpretation of the PaaS concept by FNZ, stretching from technology—including core banking technology—to transactions all the way through to asset servicing, in a way other core banking vendors are not doing yet. The truly end-to-end nature of the offering is a real differentiator.
- FNZ has global presence and bought its way into the U.S. The firm already has a robust list of clients across 21 countries, and, in 2020, it made its play into the U.S. by acquiring a majority stake in State Street’s Wealth Manager Services, which gives FNZ custody capabilities, operations, and, perhaps most notably, a credible gateway into the market.
- FNZ has also, in a span of six months, significantly strengthened its client life-cycle management (CLM) capabilities. This is a hugely important area for wealth managers, and firms globally are focusing on improving key elements of their client life cycle.
- FNZ now has New Access’s CLM functionalities under its umbrella. It also has these capabilities from Switzerland-headquartered Appway—a client onboarding and life-cycle management specialist vendor that FNZ acquired in February 2022.
- Wealth-Management-as-a-Service is a differentiated service capability with tremendous revenue potential for vendors and financial institutions (FIs). Embedded wealth management is about making wealth management products and services frictionless and integral parts of different customer journeys, as well as giving FIs out-of-the-box access to products in a preconfigured capacity. Technology plus custody plus the no-code Appway engagement layer positions FNZ as a key contender in this space.
- FNZ’s sweet spot has historically been the retail investment management space, particularly the pensions outsourced services. It dominates the U.K.’s advised platforms market. With recent acquisitions, the vendor is pushing hard into the private banking and cross-border wealth sector.
FNZ has grown exponentially in the last two decades, both organically and through an aggressive acquisition and investments strategy. Any end-to-end wealth-tech vendors that did not have FNZ on their competitor radar need to take note. As do FIs.
For more information on the core banking vendor market, please read our most recent Aite Matrix report, Aite Matrix: Wealth-Management-Focused Core Banking Systems in Europe and Asia. To discuss this deal or other M&A activity in the wealth management market, feel free to reach out to me at [email protected] or my colleague Wally Okby at [email protected].