Sun. Aug 14th, 2022

Malvern, Pennsylvania-based Savana, a company that builds financial software products for legacy banks, today announced it has raised $45 million. Part of the capital – $10 million – was debt, with the rest being a Series A tranche of shares led by Georgian Capital Partners.

Director Michael Sanchez told BestFitnessBands that the proceeds will be spent on general growth and to support Savana’s go-to-market and product development projects.

Savana was founded in 2009 by Sanchez, who was previously chairman of the international division of FIS. Before joining FIS, he launched Sanchez Computer Associates, a provider of core banking systems.

The problem Savana solves relates to architecture, Sanchez tells BestFitnessBands. Despite banks’ digital transformation efforts, many have not made the switch successfully, he fervently claims.

At his point, a 2022 study found that — among banks and credit unions who believe they are at least three-quarters through the transition to digital – less than 25% have seen a significant increase in revenue. Moreover, nothing but 11% of financial managers say their organization has modernized systems in such a way that they can easily integrate new digital technologies, Deloitte said.

“Today’s consumers prefer digital banking. This change in consumer behavior has been underway for several years and accelerated by the COVID-19 shutdown, allowing consumers to complete everyday tasks such as grocery shopping, depositing their checks or managing their bills all online,” said Sanchez. in an email conversation. “Despite the appearance that banks have all made the digital transformation, the majority of banks are not ready for this major change in consumer behavior… This is a big problem for banks trying to stay competitive in an environment with tons of fintech pressure.”

Savana claims to solve this problem through a combination of templates, APIs, and integrations designed to automate back office and core banking processes. The company’s platform offers a “process architecture” for service that spans different banking and customer channels, ostensibly accelerating time-to-market for products and ensuring service requests are handled quickly.


A glimpse of Savana’s service management dashboard. Image Credits: Savana

More specifically, Savana attempts to decouple and abstract components from third-party banking systems into APIs that contain not only the components, but also the rules, workflows, automations, and integrations needed to perform business tasks. The APIs serve as a library of customer and account service functions that are reusable and complementary to Savana’s enterprise content management system, a repository of a bank’s content related to customers and accounts. In addition, Savana provides a low-code UI framework to build internal and customer-facing apps that interact with the above APIs.

“Through preconfigured processes and integrations, [bankers using Savana] get a real-time, holistic view of all customer accounts, maps, communications and more, while customers benefit from a better, more personalized service,” continues Sanchez. “It eliminates process silos by automating processes between systems and people and eliminates the need for multiple siled suppliers. [The] turnkey, end-to-end platform is pre-configured with hundreds of APIs enabled.”

Of course, Savana is not alone in the banking modernization tool market. The amount recently raised $99 million at a valuation of more than $1 billion for its suite intended to help banks better compete with fintech companies. There are also MANTL and Bankjoy, two startups developing technology to make it easier for people to open accounts digitally at community banks and credit unions. One fintech that competes almost directly with Savana is London-based 10x Future Technologies, which is helping larger, established banks build next-generation services as well as tools to make their legacy services run more efficiently.

Competition is likely to intensify as economic headwinds turn stormy. Deloitte reported last week that investment in fintech fell to $52.9 billion in H1 2022, down 24% from $69.6 billion in H1 2021. Banking technology providers in particular suffered, with a 14% drop in the first half of 2022 compared to the same period last year .

But Sanchez is not worried – despite Savana’s relatively small customer base of about 10 customer banks and fintechs. Sanchez said “a number of entities” will go live with Savana between now and the end of 2022, though he wouldn’t say how much — or what to expect on the revenue front.

Savana’s digital delivery platform is the first and only technology solution to help banks overcome operational challenges to meet changing customer expectations,” Sanchez boldly stated. “The banking sector is undergoing an incredible transformation. Digital banking is rapidly evolving from being defined only by a consumer mobile banking app to an end-to-end digitally-enabled enterprise. Getting all the right parts in place, from the core to the customer, is the new necessity for banks that want to become digital banking enterprises.”

Regardless of the strength of Savana’s platform, like any vendor, it will face the challenges banks face when implementing new technologies. According to a study by the Monetary Authority of Singapore, it takes six to eight months for a bank to research, vet and develop a prototype with a fintech. One of the biggest hurdles holding back banks is upfront investment in technology – Forbes reports that it can add up to 10% of a bank’s annual spending.


Resolve chargebacks and other disputes through the Savana platform. Image Credits: Savana

Sanchez states that Savana has an advantage in her experience building digital systems for banks and financial institutions. For example, Mike Wolfel, the company’s president and CTO, previously led the design of process automation systems for mortgage production and service, business administration, and finance as a consultant.

Many of Savana’s competitors also have finance experts in their ranks. But – broadly speaking – Sanchez could mean something. A poll of financial services executives found that 70% believe that a lack of skills or insufficient training remains the biggest barrier to a new digital initiative within their organization. In other words, outsourcing remains attractive.

“According to the Digital-First Banking Tracker, nearly 50% of today’s consumers prefer digital banking,” said Sanchez. “It will be essential for banks to upgrade their technology infrastructure to meet…changing expectations. Ensuring a frictionless customer experience will be the difference between the banks that thrive and those that don’t.”

To date, Savana has raised $54.2 million in capital. (The company previously closed a seed round in April 2010 and a small venture round in February 2020; the Series A is its first round since the last.) The workforce stands at 200, which Sanchez says will grow to nearly 400 by the end of the year.

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