Digital account opening — and more broadly Digital Sales – is HOT. Many banks and credit unions are wrestling with it this year. In fact, according to recent research, it is the single hottest application being implemented or replaced right now in banking. The vendor market for digital account opening has seen a number of new providers enter the market to challenge the legacy account opening solutions, both core provided and independent third-party providers.
Prior to this Jack Henry/BOLTS deal, there’s been a LOT of acquisition activity around digital sales this year. Thoma Bravo orchestrated the mash-up of Meridian Link and CRIF, Q2 announced its intent to acquire Cloud Lending Solutions, adding loan origination capability along with its homegrown account opening solution. Finastra, which owns uOpen and other origination assets, purchased Malauzai, a digital banking provider, cementing a long-standing relationship.
What’s going on out there?
Third Party Players, a crowded field:
Core Providers:
And keep in mind that all the core providers seem to be intent on bringing digital origination capabilities beyond their core bases.
So What About this Deal?
Filling Gaps: Cornerstone Senior Director Sam Kilmer points to Jack Henry beefing up their origination capabilities with this BOLTS acquisition, complementing their acquisition of Vanguard Software Group around this time last year. Commercial loan origination, check. Deposit account origination, check.
Positioning: Jack Henry announced they will offer the solution to both their core clients through Jack Henry & Associates and to all others through its ProfitStars wing. This also shows faith in the strength of the BoltsOpen product.
MeridianLink partnership: Reading the tea leaves, this could mean the end of that strategic partnership which isn’t necessarily a bad thing for Jack Henry. MeridianLink — while wildly successful in the digital origination space — has been slower to adopt a true mobile-first approach to account opening while Bolts was purpose-built for mobile account opening.
For this to work, Cornerstone Advisors President Steve Williams pointed to Jack Henry learning from the fits and starts it experienced with GoDough and more recent experience with Banno. Retaining development talent and keeping talent out of the corporate bubble while providing Bolts resources for implementation, customer support, and sales will be important.
Instant Market Credibility: The road to viability as a technology startup is long. Banks — and to a lesser extent Credit Unions — are hesitant to take big risks on vendors newly entering the market. This acquisition quells all grumbling about BOLTS long-term financial stability and any fears of ownership changes over the course of a contract term.
Scale: Jack Henry brings to BOLTS bodies and knowledge around how to scale this product. What will be interesting to watch is how quickly that happens and how quickly BOLTS is integrated to the Banno platform.
Warm Cross Sell Market: With deep ties to the Credit Union core market and deepening ties to the Bank core market, BOLTS now have a huge opportunity to capitalize on the deep integration it built to the Jack Henry cores.
This acquisition seems like a solid move for Jack Henry and for the founders of BOLTS. Time will tell if Jack Henry can make the most of the talent within BOLTS.
Special thanks to Sam Kilmer and Steve Williams for their contributions to this article.