US banking giant JP Morgan has acquired payments fintech Renovite Technologies to support its strategy to put more of its IT in the cloud.
It was not too many years ago that large traditional banks showed a reluctance to move systems to the cloud, but today they are accelerating the process through the acquisition of financial technology firms, or fintechs.
Renovite Technologies’ cloud-native payments technology will become part of JP Morgan Payments and support the bank’s move to cloud-based IT.
JP Morgan said the acquisition would help it achieve its goal “to develop the next-generation payments processing platform globally”.
“Renovite’s cloud-native merchant acquiring capabilities are already helping us better serve our clients. As the Renovite platform integrates with JP Morgan Payments, merchant acquiring clients will be able to accept more methods of payments around the globe to help grow their business,” said Mike Blandina, global head of payments technology at the bank.
Renovite CEO and founder Viren Rana said the fintech’s mission was to provide modernised infrastructure in the cloud with the latest technology.
“We are very proud of the team and the world-class payment technology we’ve built and are excited to be part of JP Morgan Payments. This business is the natural home for our people and technology,” said Rana. “We believe the transaction will help us to realise our joint vision to deliver world-class payments capabilities globally through next-generation infrastructure for JP Morgan Payments clients.”
Renovite is headquartered in California and has offices in the UK and India.
Details of the value of the acquisition were not revealed, but it is another example of JP Morgan using its financial resources to keep pace with fintech developments.
Traditional banks are trying to move away from legacy IT systems, which are expensive to maintain and inflexible when it comes to launching new digital offerings, through the migration of systems to the cloud. With huge amounts of capital, they often acquire fintechs working in niche areas to support this strategy.
Banks are also replacing in-house-developed legacy systems with cloud technology by partnering with fintechs. For example, JP Morgan Chase, the US bank’s retail banking business, is replacing its core system with a cloud-native system from UK fintech Thought Machine. The supplier’s Vault platform will enable the bank to take full advantage of the cloud for core banking.