Japanese IT giant NEC is moving into the digital payments arena after agreeing to acquire Swiss financial concern Avaloq. Formed initially as an IT solutions company, Avaloq has built up a thriving business based around software as a service (SaaS) cloud solutions and business process as a service (BPaaS).

NEC will pay 2.05 billion Swiss francs for the company, which equates to around US$2.33 billion. With plans to boost its business in the digital government field, the move will allow NEC to develop its digital finance software and domain knowledge. However, Avaloq will to continue to operate as a standalone company.

With NEC’s existing expertise in biometric and AI technologies the acquisition will see the Japanese tech company move its business towards innovative SaaS business models. 

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Since launching in 1985 Avaloq has grown its customer base significantly and now numbers 150 clients across 30 countries around the globe. The Zurich-based company is well known for its work with Fintech startups and specialisms in AI, blockchain and other emerging areas of financial tech.

SaaS products

"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.

With the financial industry moving away from conventional practices and heading towards a more open banking-based setup NEC hopes that its purchase of Avaloq will give it the capacity to grow its digital finance capability by developing a more expansive range of SAAS products.

"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 on the acquisition, which should complete by April next year.

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