EXCLUSIVE: Woodforest National implements Finxact on Microsoft Azure

EXCLUSIVE: Woodforest National Bank in core banking tech overhaul with Finxact

Woodforest National Bank has been confirmed as one of the initial clutch of takers for the emerging new core system from US-based Finxact. Martin Whybrow reports.

The Texas-based financial institution has 750+ branches and is lined up to be the first taker of the Finxact system on Microsoft Azure, as opposed to Amazon’s AWS.

The bank is taking the full Finxact suite, across deposits and lending, says Finxact co-founder, Frank Sanchez, and will replace a more or less in-house-based system, with FIS roots. Implementation is underway although production dates have still to be confirmed. He expects go-live will be before the end of the year or early 2021.

While the supplier is now claiming to have signed twelve users, the only other one in the public domain to date is initial signing, Wilmington North-Carolina-based Live Oak Bank.

Live Oak Bank is still lined up to be the first live site but the cutover has been delayed from the initial mid-2019 target. Sanchez says this is due to additional requirements, with the plan now to go live for full deposits and lending, including digital channels, whereas the original first phase scope was solely deposits. He says the code is delivered and final testing is underway.

Overall, Sanchez claims Finxact is ahead of target, with six projects underway, compared with the intended two-to-four. Of the twelve takers, four are fintechs, one is a bank in Thailand and the others are regional or sub-regional US players.

In terms of the Thai taker, this is for deposits and stems from an Asian investor/partner that has been involved with Finxact from the outset and always intended to take the system to market in its region. At the same time, Sanchez emphasises that Finxact’s focus during 2019 was firmly on its domestic US market, ahead of international plans that will kick in this year.

The original cloud platform for the new core system was AWS but with a stated intention from the start to support others. Woodforest National’s requirement for Azure partly stems from the fact that many of its branches are in the stores of Amazon arch-rival, Walmart.

More generally, Sanchez sees Microsoft making progress in the financial services market with Azure. For one thing, Microsoft has been able to build on the fact that it has a large presence already in most banks. As it has shifted applications from the desktop to the cloud, it has done an excellent job and has built up trust, he feels. “Two years ago, I would have told you that Amazon had won the market,” he says, but that is no longer the case, with IBM also catching up. “In the US at least, the market has really brightened up for Azure versus AWS.”

The container-based design of Finxact Core aids the support of multiple cloud platforms, says Sanchez, but each provider has its own stack of solutions for areas such as security and data management, so adapting for these is the main overhead.

One other change of late is related to Finxact’s original choice of the Google-derived open source Golang high-performance language. While an excellent language for cloud deployment, says Sanchez, the challenge has been the pool of resources, with many taken by Google, Facebook and Silicon Valley firms. Finxact has now developed a transpiler for converting Typescript code into Golang, so that developers can work in either.

Woodforest National Bank was one of a second tranche of investors in Finxact, announced last year. On the back of this, Finxact has grown significantly, with 80 staff at present and with ongoing further recruitment. Sanchez foresees another round of funding, pointing out the gap between upfront investment and income when building and delivering a core-as-a-service solution.

The supplier has also signed a number of partners, including Accenture, Wipro and, on the application side, Backbase. There are no takers to date with the Dutch digital banking specialist, says Sanchez, but there are paid-for proof of concept studies with some larger US banks that are looking at Backbase for the channel delivery and orchestration layer.