Switzerland-based financial software provider Temenos looks poised for expansion in the U.S., where it sees great potential for growth in digital banking. Of course, it’s up against entrenched players in the core vending space like Fiserv, Jack Henry & Associates and FIS, which have long enjoyed a commanding grip on the U.S. market, and appear well aware that foreign competition is coming.

Emily Steele, President for North America at Temenos, told Bank Innovation the company is “absolutely” interested in increasing its U.S. market visibility.

“With 40% of technology spend coming from the U.S., it is one of Temenos’s absolute strategic markets, and we’ve been focused on growing our footprint here,” she said.

The company announced last week it will acquire Avoka, a Colorado-headquartered firm focused on digital customer acquisition and onboarding, for $245 million. While it was Avoka that approached Temenos, both companies said the deal was a cultural, technological and strategic fit that made sense right off the bat.

The acquisition, subject to regulatory approval, also makes a lot of geographic sense for Temenos’s overall strategy.

“There isn’t a CIO, CTO or chief digital officer today who isn’t talking about digital, and how to transform the financial institution’s technology to support that,” Steele said. “From our perspective, digital traverses any number of technologies, so we see the greatest opportunity across all financial markets and product segments.”

She said Temenos doesn’t limit itself to a specific market or product segment, or technology, because of its belief that “true” digital transformation can start from the front or the back, but, ultimately, needs to be end-to-end.

“The reason we view it like this is because the U.S., while it’s the largest technology spender, has fallen pretty significantly behind on technology innovation,” Steele said. “So, where we really see our opportunity for expansion in the U.S. is partnering with financial institutions of any size to ensure that we’re providing technology to future-proof them, really for years to come.”

Steele said Avoka has a “substantial customer base” and “strong traction” within Europe, Australia and the U.S., with its highest growth occurring in the U.S. But while location was an important factor, it was far from the only factor.

From a product standpoint, Steele said Avoka’s platform addresses a “critical” part of the customer journey that Temenos feels is lacking in most other existing platforms yet increasingly expected to be a seamless process by customers.

“Today, that’s really a major investment for banks as they’re looking to grow their customer base and sell existing customers new products,” she said. “They’re specifically addressing this market need.”

She said consumer expectation is setting the tone and there isn’t really another option for banks wanting to build brand loyalty.

“Banking is experiencing a real once-in-a-generation reinvention because of the ever-changing customer expectations, the regulatory demands, and the competitive pressures,” she said. “From our perspective, bringing Avoka and Temenos technologies together provides a really unique value proposition to help financial institutions act now and, more importantly, to win.”

The Temenos-Avoka deal could also spell more competition within the U.S. market for core banking systems, which is already seeing movement. In the past couple of years, Fiserv, for instance, has made acquisitions and entered into strategic partnerships, and even boosted its R&D spend.

According to data gathered by FedFis.com, the top processor as of 2017 was Fiserv. With 37.1% of the marketshare, it was well ahead of its competitors. Jack Henry & Associates had just half Fiserv’s marketshare with 17.6%, followed closely by FIS at 16.6%. CSI, Finastra and a long tail of other core providers, including Temenos, made up the remaining 28.6%. Fiserv is the technology partner of INV Fintech, this company’s sister accelerator.