Cognizant Acquires FinTech Startup Meritsoft
- Written by TechXO Team
- Category: Fintech
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IT consultancy giant Cognizant has acquired yet another financial technology startup, this time an Irish company called Meritsoft.
The Dublin, Ireland-based company owns an automation solution named Finbos that assisted financial institutions manage taxes, commissions, cash flow functions, and fees. This means that the platform assisted banks improve operational efficiency, comply with the requirements for regulation, and control the costs of whatever functions they did. It has been reported that the products of Meritsoft are currently being used by five out of eight of the world’s leading investment banks. The Irish firm originally ran an office in New York, with Wall Street banks being part of their clientele. In fact, before the acquisition, Cognizant was using the Finbos platform in its managed services and digital operations products.
Cognizant’s acquisition not only means that Meritsoft will be under a new company, but it also means that the IT consultancy giant has access to the huge clients that Meritsoft originally had. This expansion of market reach could mean future success for Cognizant, depending on how it plays its cards regarding the acquisition. Furthermore, it needs to assure Meritsoft’s clients that procedures and systems will still function the same way if it hopes to integrate those big-time clients into its own list of clientele.
This is not the first time Cognizant has acquired a known tech corporation. In January 2019, Cognizant acquired the Nordic tech service provider Oy Samlink Ab, allowing it to gain a mega contract to build and manage a shared core banking system for three major Finnish banks.
This series of multiple acquisitions could mean multiple things for Cognizant. Primarily, it could mean that Cognizant is planning to expand its services and reach the modern market. While focusing on digital business, operations, and systems & technology services, Cognizant offers multiple services that encompass the needs of consumers in multiple markets. However, given that Cognizant is a big corporation, people tend to look over it and instead opt for FinTech startups that cater to their individual needs. By acquiring these types of startups, Cognizant now has access to that market while expanding its reach towards other consumers that it was not originally able to reach.
It could also mean that Cognizant is preparing to improve its own financial systems. In a world where technological developments occur on a day to day basis, it is increasingly difficult to keep your own systems up to par with the changing world of tech. Cognizant’s acquisition of multiple tech corporations could mean that they are arming themselves with new digital and technological solutions in the face of increased compliance and regulatory obligations. This improvement within Cognizant’s systems will not only allow for Cognizant to function more efficiently but will allow them to be on good terms with regulatory systems which will give them an edge over other competitors.
Cognizant acquiring unique FinTech startups that have innovative offerings could also mean that it is clearing the competition. While Cognizant is already an established player in the game, fresh and young FinTech startups offer something to consumers that is difficult for Cognizant to do: a personalized service. Therefore, in order to remove any threats to business, Cognizant buys these startups out and integrates them to their own systems, allowing for Cognizant to offer the same services to consumers.
Regardless of what Cognizant intends to do with its acquisitions, it is clear that all of it will contribute to further the growth of the IT giant. Clearly, Cognizant has established itself well in the world of tech services and solutions. It is only a matter of time before we see Cognizant battling it out with other, major tech corporations.