Ohpen, the Dutch cloud-based banking system, has announced the acquisition of Davinci, a provider of cloud-based cross-border loans and mortgages. With the acquisition, Ohpen can offer a full suite of products — across savings, investments, loans, mortgages and current accounts — in a cloud environment.
The company works with traditional banks that want to move to a fully digital core banking platform, said Matthijs Aler, Ohpen’s CEO.
“Mid-size and large banks in Europe have product portfolios that date back to the last century and they want to make the transformation to fully digital servicing.” They need a partner that can help them migrate accounts and modernize their IT infrastructure, he said.
That distinguishes Ohpen from challenger banking platforms which can support the account types they have developed but are not good at administering older banking account types or historic portfolios. Ohpen can use its bulk migration API to migrate millions and millions of accounts in just 30 minutes, he said. The company has about 20 banks using its software in Holland and expects to expand into the UK and Belgium where its system is already compliant with those countries’ regulations.
In the Netherlands, its clients include Aegon and Volksbank. It can support retail banks, asset managers, insurers, building societies, lending and mortgage specialists, online brokers and private banks to build new propositions and migrate complex legacy products into the cloud within a matter of weeks, the company said in its announcement.
Using the Ohpen platform, banks can be more flexible.
“So if you are a bank and want to create a new loan type, such as a buy-to-let mortgage, in the old world you need to deal with your IT providers and it might take two or three months to configure the product into the system and then it will be deployed to you as a client. In our system it is a matter of minutes rather than months.”
While challenger banks have generated a lot of attention, added Aler, more than 90 percent of assets are still held by traditional banks. With Ohpen, banks can move off their legacy IT to a digital platform without building it themselves, Aler said.
“Banks want to focus on bringing services to their clients and on product enhancement — they don’t want to do all kinds of testing and invest a lot of time maintaining back office platforms. Ten years ago banks wanted to build everything themselves, now that has dramatically shifted. The fear of outsourcing may not have disappeared altogether, but it is different from 10 years ago.”
Rather than build its own lending platform, Ohpen decided to look for a cloud-native solution, and found it in Davinci, which was just six kilometers from its office.
“We knew them, but not the scope of their service.” With the acquisition, Ohpen was able to double its product offering and address a much bigger market than both companies could do alone, he added. The complete Davinci team will stay on board, he said.
The lending software company uses AI and machine learning to achieve a high level of onboarding and STP in loan and mortgage processing which can result in cost savings of up to 80%, the company said. The combined entity will have a head count of 350 and $35 million in revenue. Both companies use AWS for their cloud platform.