December 03, 2013

With it's $1.65 billion acquisition of Digital Insight, NCR Corp says it is transforming its financial services business to offer "a full suite of retail banking solutions for banks and credit unions" across digital and physical channels.

The Duluth, Ga.-based company, best known as a manufacturer of ATMs and point-of-sale equipment, also purchased Alaric, a provider of secure transaction switching and fraud prevention software for $84 million.

But the big news was undoubtedly the purchase of Digital Insights, which is one of the largest mobile and online banking services providers in the U.S.

According to Jacob Jegher, senior analyst with Celent, the move helps position NCR as more of an end-to-end service provider, something small to medium sized banks are increasingly looking for in a vendor partner.

For fintech vendors, in the current environment "it's really important to build out and offer financial institutions a different mix of channel-oriented products that can talk to each other," Jegher notes.

On a conference call conducted Monday shortly after the deal was announced, NCR chairman and chief executive Bill Nutti said the deal was a historic one for the company, and that it meant NCR was "fundamentally and permanently changing" it's financial services business.

"For the past eight years, NCR has been executing a deliberate and thoughtful strategic agenda to profoundly reinvent the company," Nutti continued. "Over that time, we have orchestrated a patient balance between legacy issues and growth initiatives that has led to delivering a compelling value proposition for all of our stakeholders. Today represents a culmination of many years of effort, particularly as it relates to what was once NCR's core businesses."

Digital Insight has a customer base consisting of more than 1,000 financial institutions with 12 million online banking users and nearly 4.8 million mobile end users, according to NCR. The acquisition will also provide an opportunity for NCR to offer its clients additional solutions for mobile, bill pay and online banking, the company said.

Private equity firm Thoma Bravo purchased Digital Insight for $1.03 billion from Intuit on Aug. 1, which itself had bought Digital Insight for $1.22 billion in 2007.

[See Also: NCR/uGenius Technology Deal Targets Growth of Video ATM Technology]

ABOUT THE AUTHOR
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as ...