Avaloq, a fintech company and provider of software as a service (SaaS) and business process as a service (BPaaS) solutions to banks and wealth managers, has reported strong results for 2018 driven by continued demand for the firm’s SaaS, BPaaS and on-premise solutions.
Overall, the firm generated full-year revenues of CHF579 million, a year-on-year rise of 6 per cent on an underlying basis. Adjusted EBITDA for 2018 was CHF90 million while the liquidity remains robust with cash on hand in excess of CHF144 million.
Avaloq saw a significant number of successful ‘go-lives’ and new client wins in 2018. In particular, one of Switzerland’s biggest IT projects was successfully completed when 253 separate Raiffeisen entities (246 Raiffeisen banks, six branches and the central bank) moved to one platform developed by Avaloq. The platform is available to all 11,000 employees at 900 separate Raiffeisen sites throughout Switzerland. Separately, KASIKORNBANK, Pictet Group, Deutsche Bank and Edmond de Rothschild all benefited from the successful roll-out of Avaloq’s solutions last year.
New clients won in 2018 included Intesa Sanpaolo, Smith & Williamson in the UK, and China’s Industrial Bank Co. Underpinning the firm’s SaaS and BPaaS strategy, Smith & Williamson further upgraded its relationship with Avaloq by adopting its SaaS solution in February 2019. In December last year, Avaloq announced the development of a highly innovative crypto asset solution in partnership with Gazprombank, the result of a project with Metaco, the cryptocurrency specialist in which Avaloq acquired a 10 per cent stake in April.
The year also saw Avaloq expand its geographic footprint: the share of revenues from EMEA region doubled to 27 per cent – up from 13 per cent in 2017 – and revenues from Asia Pacific increased to 10 per cent while 63 per cent of revenues were generated in Switzerland/ Liechtenstein over the 12-month period. Both EMEA and Asia regions continued to accelerate in terms of market opportunities, and Avaloq has continued to grow its presence with new and larger offices in London, Madrid as well as Singapore and Sydney. In terms of staff numbers, the workforce grew by 8 per cent, mainly in these locations.
Juerg Hunziker (pictured), Avaloq’s Group CEO, says: “We continued our strong growth path in 2018 while successfully completing our largest digital transformation project ever, driving forward in terms of international expansion and capitalising on innovation. One of the many things I am particularly proud of is our ability to successfully complete projects of vastly different sizes and scope, from the complete digital and processing transformation of Raiffeisen’s network in Switzerland to more specific solutions for time-boxed projects at banks like KASIKORNBANK in 10 months and Intesa Sanpaolo in nine months.”
The growth in client activity and sales in 2018 was complemented by new products and solutions as well as a number of innovations and partnerships – with much of the focus on the further growth of the Avaloq ecosystem. The year saw the launch of Avaloq’s open API offering with 150 API endpoints made available to the community, while in October, avaloq.one, the firm’s ecosystem innovation, won “Best of Show” at FinovateAsia.
Avaloq announced a key strategic partnership with IBM to build the Swiss Banking Cloud, which will transform Avaloq’s IT service delivery model, leveraging on IBM’s Infrastructure as a Service offering. The migration of Avaloq’s existing SaaS and BPaaS clients in Switzerland to the new private cloud setup will start in the course of 2019, with the ambition for it then to be rolled out in Asia and EMEA.
Hunziker adds: “The development of avaloq.one showcases the very best of Avaloq and our central role in the digitalisation of the financial services sector. It also future-proofs our business model and consistently gives our clients the finest that the world’s fintech sector has to offer.
“Looking forward, Avaloq’s growth is underpinned by a robust pipeline. As an international leader in fintech and integrated banking solutions, Avaloq is exceptionally well positioned to help its clients succeed in the digital transformation and is increasingly seen as a partner of choice.”