NEC is a leading Japanese information technology company and hopes to significantly expand its client offering by connecting Avaloq’s leading digital banking solutions to its advanced biometrics and artificial intelligence technologies.
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Competition between technology companies offering financial services is intensifying thanks to the ongoing digitization of the sector, the increase in non-cash payments and the possible establishment of digital currencies by central banks.
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Avaloq has experience in software development for financial institutions and currently has more than 150 clients in 30 countries. Among them are Deutsche Bank and HSBC. The company had sales of CHF 610 million last year, 70 percent of which came from Europe.
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NEC buys Avaloq from the company’s founders and employees and the private investment firm Warburg Pincus. It owns a 45 percent stake in the Swiss company and organized the sale. The agreement should be finalized next April, and must be approved by the antitrust authorities.
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NEC has spent the last decade restructuring its non-profit divisions, which lagged behind Asian competitors, and sold its semiconductors, personal computers and smartphones divisions.
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The company added that it wants to focus on Japan, where financial institutions are slow in the transition to the Internet. The new Japanese Prime Minister Yoshihide Suga has also promised to modernize outdated government systems and supports digitization.
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Among other things, in 2018, NEC already bought the British company focused on Internet services Northgate Public Services, whose clients include the London police. A year later, he bought the Danish company KMD focused on so-called eGovernment, ie the digitization of public administration, for more than one billion USD (23 billion CZK), the agencies Kyodo and Reuters wrote.
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