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NCR to buy Digital Insight Corp for $1.65bn as it completes $84m Alaric acquisition

NCR Corporation, maker of automated teller machines (ATMs) and other consumer transaction technologies is expanding its financial services (FS) business by announcing its intention to buy Digital Insight Corporation, a specialist in online and mobile banking solutions, for $1.65bn. It has also completed the acquisition of Alaric Systems in the UK, a provider of secure transaction switching and fraud prevention software, for $84m.

The combined acquisitions by NCR, with the larger $1.65bn purchase of Digital Insight not expected to close until next year, are part of the ATM hardware and software manufacturer’s drive to expand its FS business.

The technology company is hoping to create a complete enterprise software platform that will deliver a comprehensive consumer experience across all digital and physical channels, including mobile, online, branch and ATMs. Target retail bank clients and other customers can theoretically reduce maintenance and legacy costs by consolidating on one integrated platform and this will no doubt be one of the key marketing points for the combined entity. The aim will also of course be to sell new product on the single platform with omnichannel services covering all payment and transaction types and Software-as-a-Service (SaaS) delivery mechanisms for new clients will no doubt be targeted to ensure on-going revenue.

News Analysis: Creating a Retail Banking and Payments Integrated Offering
According to NCR the purchases of Digital Insight and Alaric Systems continue its strategic plan of transformative acquisitions across the company’s core lines of business from branch banking to retailing, and will enhance NCR’s existing capabilities in retail banking. "This is a historic day for NCR," said NCR chairman and chief executive officer (CEO), Bill Nuti. "For the past eight years, NCR has been executing a deliberate and thoughtful strategic agenda to profoundly reinvent the company. 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. Today, we are fundamentally and permanently changing our largest line of business, financial services.

“With the announcements of our agreement to purchase Digital Insight and our acquisition of Alaric Systems, NCR becomes a powerful, global fintech solutions provider enabling retail banks to deliver on the promise of omni-channel capabilities," he concluded.

Digital Insight and Alaric Enhance NCR Product Suite
Digital Insight is based in Menlo Park, California, US, and Alaric Systems is based in London, UK. The latter has a diversified customer base consisting of more than 1,000 financial institutions (FIs) with 12m online banking users and nearly 4.8m mobile end users. The Digital Insight acquisition will also provide an opportunity for NCR to offer its clients additional solutions for mobile, bill pay and online banking.

Alaric Systems’ makes payment processing and fraud prevention software enabling FIs, payment processors and retailers to manage ATM, Point-of-Sale (PoS), electronic e-commerce and mobile payment or banking transactions to be scanned for fraud risks. Its software - principally the Authentic payments and Fractals fraud prevention offerings - are used on more than 1.25bn transactions a month across 30 countries.

“Together, NCR, Digital Insight and Alaric Systems are committed to delivering value to financial institutions," said Andy Heyman, senior vice president of NCR Financial Services, who will head up the expanded division. "We have an opportunity to enable differentiated consumer experiences through safe, secure, and integrated transactions across every banking touch point. We will help FIs to reduce costs, serving as a single solutions provider for ATM, branch, mobile, commerce and internet banking services, as well as the payments and processing infrastructure behind those experiences.”

By Neil Ainger