Finxact: The Platform for Banking, Fintech and Embedded Finance

Finxact: A Platform at the Core of Banking, Fintech and Embedded Finance blog

Next-generation banking platform opens the door to a more flexible future


Every financial institution today operates using a primary account processing system, a software “core” that enables daily business. It’s at the heart of an institution’s technology investment. Over time, additional software solutions are integrated with the core to offer new products and services, and to accommodate functions such as risk management and regulatory compliance. 

Traditional banking cores were built to automate existing manual processes, which was a tremendous boon to efficiency. However, those processes were largely branch-based and supported banking that occurred when the branch was open. Processing of accounts was done in batch mode after close of business.

Now, of course, the world of banking is changing. Rapidly.

Today, customers expect 24/7, digital banking access and up-to-the-minute funds availability. Their expectations have been shaped by the digital experiences offered by fintechs – experiences that are personalized and contextualized. Financial institutions and their core technology providers must evolve or lose their ability to compete.


Meeting the change

In response, a variety of next-generation banking platforms is coming to the market. These platforms are built from “a blank sheet of paper,” unencumbered by the limitations of inherited technology choices. Just as traditional cores did when they were first created, today’s next-gen players take advantage of the latest technologies. These newer technologies enable platforms that are flexible, agile and scalable.

“One of the key differences between traditional cores and next-generation platforms is that the latter don’t try to anticipate and satisfy every technological need a financial institution will have,” said Tom Lowry, chief operating officer of Finxact. “Rather, they are designed to operate as platforms within an open ecosystem where organizations can readily assemble unique technology stacks to enable their particular business goals.” 


The Fiserv entry: Finxact

In 2022, Fiserv acquired Finxact, a company founded in 2016 to provide clients with a real-time and extensible banking solution that offers enhanced access to data. 

Finxact is an open, API-first financial services platform designed for the business of banking, fintech and embedded finance. It’s a modern system of record and a transaction processing engine that is agnostic to asset classes, currencies and time zones, providing maximum flexibility in offering products to a broader market.

Finxact can help organizations of all sizes launch new products and digital capabilities through a robust set of modern APIs. As financial institutions and companies across all industries around the world embrace new, fast-growing digital technology for embedded commerce, finance and payments, Finxact will enable Fiserv to provide clients with the capability to create modern, flexible and highly personalized digital banking experiences.

Who’s right for Finxact

As Fiserv extends the reach of Finxact to an even wider audience, the kinds of organizations that will be able to benefit from Finxact will likely expand. “The beauty of a next-gen platform,” said Lowry, “is that it can support uses that have not yet been imagined, and in fact, can serve as an engine driving the discovery of those new use cases.”  

Currently, we’re focusing on three market segments that can reap substantial benefit:

Large financial institutions (LFI). Finxact helps large institutions transform their banking infrastructure, but uses an incremental, smaller-scope approach that minimizes risk and avoids the disruption of a complete and immediate core conversion. Finxact can work alongside an LFI’s traditional core, so the institution can use Finxact to set up a digital bank or a couple of new products, for example, and then test the results. Over time, as the institution more fully understands what Finxact can do, it may decide to move all processing to the new core. This approach ensures immediate market wins while the institution explores the full potential of Finxact.


Live Oak Bank was an early adopter of Finxact. Seeking to move away from batch processing, Live Oak first moved its deposits to Finxact and is now in a position to migrate its loans as well. By adopting a real-time, open API-first core, the bank is easing integration with its other banking channels, lowering operating costs and shortening the time-to-market for new products.


Embedded finance providers. While some retailers and fintechs may not think in terms of using a “core,” they may well be looking for the system-of-record capabilities delivered by a core – and especially a next-gen platform. Finxact is ideal for big retail players and other businesses that want to embed financial services into the customer experience to boost sales and expand relationships. 


ONE Finance leverages Finxact to embed financial services into a next-gen digital experience for customers and employees of one of the world's largest retailers. Aiming to enable its customers to enjoy a healthier financial life, ONE created an easy-to-use app that lets consumers save, spend and borrow – all in one place.


Community banks and credit unions. For community financial institutions (CFIs), Finxact serves to level the playing field with the largest banks and fintechs. Community banks may not have the resources of the larger institutions, but they’re still looking for a core that is versatile and adaptable. Product teams have been actively integrating Fiserv surround solutions with Finxact, expanding options for community financial institutions. CFIs can leverage the openness of Finxact to partner with a wide array of other fintechs, or they can leverage their existing investments in Fiserv surround solutions and take advantage of the full technology stack Fiserv has to offer. 


A few community institutions are already making their mark with Finxact. Primis Bank, a $4 billion institution in Virginia, used the platform to roll out a new digital account opening experience. The initiative extended the bank’s market reach from 26 to all 50 states in the U.S., and led to the remarkable achievement of nearly $1 billion in customer deposits in just six weeks.

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What makes Finxact different

In addition to the foundational traits for a next-generation platform, Finxact has several features that make it unique. It has a multi-asset and multi-position account structure. Accounts can be comprised of multiple “positions”: for instance, an account may have a position that is like a traditional demand deposit account, another that is a certificate of deposit and another that is a loan or line of credit. In other cores, all of those would be separate accounts and possibly in separate systems. Also, the Finxact account structure can track multiple currencies or things such as securities, precious metals, rewards points or anything of value. 

Finxact is highly extensible. Users can add unique features and evolve Finxact to meet their needs. A schema editor enables users to modify the structure of the models within Finxact to add fields or their own custom schema. A domain-specific language makes it possible for users to modify the behavior of Finxact by injecting custom business rules. The extensibility of Finxact is one way this platform future-proofs an organization’s technology investment. 

While most core systems are bound by the notion of a 24-hour “day,” Finxact uses a temporal database that stores data relating to specific time points. That means an institution can recreate “as-of” views into any transaction, event or occurrence. Finxact is capturing much more information about the transaction or event, and that information is then available for customer analytics and real-time fraud detection.

With traditional bank cores, intraday balances can be simulated, but aren’t “real” until end-of-day processing is completed. That means the financial institution is working from two versions of the “truth,” which entails risk. With Finxact, high-velocity, in-balance transaction processing eliminates end-of-day and batch reconciliation and delivers a single version of the truth. 


The way forward

The one thing we know about the future of financial services is that it won’t be static. The winners will be those who can pivot quickly and adapt readily to changing circumstances. Finxact delivers the agility those winners will need. It’s made for the future. Finxact is built to flexibly support the way you do business and to promote growth – today, and tomorrow.