SoFi Technologies announced today it is acquiring digital multiproduct core banking platform Technisys, which will operate as a subsidiary of SoFi.

Technisys’ shareholders will receive aggregate consideration of approximately 84 million shares of SoFi common stock — approximately $1.1 billion — less than 10% of SoFi’s fully diluted share count as of Sept. 30, 2021, according to a release.

The acquisition is expected to close in the second quarter, Miguel Santos, CEO at Miami-based Technisys, told Bank Automation News.

“Technisys will operate as a subsidiary of SoFi Technologies, Inc., the parent company,” Santos said. “It will work in partnership with the existing Galileo subsidiary to provide enabling capabilities to banks and fintechs, including SoFi’s own banking subsidiaries, similar to how AWS provides capabilities to both Amazon and other companies.” Galileo Financial Technologies is a financial-infrastructure company that focuses on card and payment capabilities, which SoFi purchased in 2020 for about $1.2 billion.

The data of Technisys’ existing clients will not be accessible to SoFi, Santos noted.

“The SoFi deposit, lending and brokerage businesses will have no access to proprietary company and client data for those banks and fintechs which use Galileo and Technisys solutions,” he told BAN. “There is essentially a ‘Chinese wall’ between the banking-as-a-service business of Galileo and Technisys and the direct-to-consumer business lines utilizing the SoFi brand.”

While the current plan is for Galileo to continue to focus on card and payment capabilities and Technisys to focus on deposit and lending capabilities, those functions “will come together in a more unified offering over time,” Santos said.

San Francisco-based SoFi also anticipates savings in third-party costs by integrating Technisys’ technology stack. Once SoFi has migrated off its current multiple third-party cores to a single owned and operated Technisys core, it expects to be able to innovate faster, perform more real-time decisioning, and offer greater personalization for its more than 3 million members, a press release from SoFi noted.

SoFi estimates this shift and the vertical integration with Galileo will create approximately $75 million to $85 million in cumulative cost savings from 2023 to 2025 and approximately $60 million to $70 million annually thereafter, according to the press release.

Shares of SoFi [NASDAQ: SOFI] fell 9.92% from market open, trading at $10.26 as of market close.

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