The story
Background
Core banking includes information about customers, transactions and account balances. Banks have traditionally bought software for these purposes rather than developing it internally. More functions had to be added over the years as requirements changed, such as for online banking. The result has been very complex computer programs that can be difficult to manage. Coding changes for compliance with new regulations and for accommodating new products can be problematic.
As a result, banks have tended to buy in modern comprehensive software from large, specialist firms. This may be run by the bank itself or by an agency running the computing service on behalf of the bank.
Company history
Avaloq was founded in Zürich in 1985, under the name "BZ Informatik Aktiengesellschaft", functioning as the information technology subsidiary of BZ Bank. The founder is Francisco Fernandez. In 1991, 30% of the share capital was taken by the employees as a result of a partial management buyout. At that time, there were five staff members and the cost of the buyout was $200,000.
The first customer was Swiss National Bank, followed by five other commercial banks in Switzerland. The system then spread worldwide although it has had little impact in America. Initially, the firm was called BZ Informatik, and its product “AdvAntAge”.
In 1996, the current name was adopted. In 2001, the company split from BZ Bank, as the employees acquired 100% of the share capital.
Product development of the software takes place in Zürich and Edinburgh, supported by a support center in Manila. New capacity was built primarily at the international sites, most notably in Edinburgh.
In 2013, the group expanded its presence in Germany by entering into a cooperation with quirin Bank, acquiring Höll Computer & Software GmbH and establishing Avaloq Sourcing (Deutschland) AG, based in Berlin.
In 2015, Avaloq went live with its two BPO centers in Germany and Singapore. Avaloq is continuously building new business process outsourcing (BPO) centers.
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In November 2019, Reuters reported that Warburg Pincus was working with Goldman Sachs and Barclays on a planned IPO or sale of Avaloq.
In October 2020, Avaloq was acquired by NEC Corporation for $2.2bn.
From Wikipedia’s article on Avaloq, shared under CC BY-SA 4.0.5