Kinective’s Strategic Acquisitions Build a Unified Banking Operations Platform

By John San Filippo

Stephen Baker, CEO of Kinective, is orchestrating a series of strategic acquisitions aimed at creating a cohesive and comprehensive banking operations platform. Kinective was formed in June 2023 through the combination of CFM, IMM, and NXTsoft. In the past few months, the company expanded its portfolio with the additions of Datava, Epic River, and Janusea. These acquisitions are part of a deliberate strategy to simplify and modernize operations for financial institutions. “As the leader of the business, I’m committed to making sure that what we put together is a sensible platform where all the pieces add value and fit together.” Baker told Finopotamus.

Connecting the Enterprise with Janusea and NXTsoft

Stephen Baker

The acquisition of Janusea is a natural fit for Kinective, particularly in its overlap with NXTsoft. Baker explained that NXTsoft “by far has the most deployed, what I would call connectivity software in the market.” He noted that NXTsoft’s business “was born out of the need to connect loan origination with core, and then branched out from there.” Janusea, on the other hand, “started from a different point,” coming “fresh, saying we want to help be able to allow credit unions to connect to the business systems they want to use.”

Baker highlights the complementary nature of the acquisitions, stating, “What we found is a pretty complimentary fit where we were able to bring in this great talent.” He added that the expertise and leadership from Janusea, with “guys like Kyle (Stutzman) and David Atwood,” are “really critical to help us maintain the mantle of premier integration partner.”

While many in the industry speak of application programming interfaces (APIs) as a simple plug-and-play solution, Baker acknowledged this isn’t always the case. “I think the fact that Janusea and NXTsoft exist points to that not being exactly true.” He credits core banking providers for becoming “more open in their thinking” and “embracing the idea that we need to connect.” However, he emphasized, “Just because there’s an API on one side, that doesn’t solve the problem. You’ve got to be able to link the systems together.” Kinective’s role is to provide “a full operational, working integration,” simplifying processes for financial institutions, especially those without large IT staffs. “They just need it to work, a turnkey solution,” Baker said, “That’s what we’re providing versus, here’s an API; go build to it.”

Activating Data with Datava

The integration of Datava into Kinective’s platform is a crucial step towards aggregating and normalizing data. Baker explained, “One of the reasons that we were so excited to bring Datava into the mix is Datava basically becomes the data backbone for our entire suite of solutions, what we call the Kinective banking operations platform.” He told Finopotamus that when pitching the Datava acquisition to his board, he told them, “We have a Datava-shaped hole in this business. And I want to plug it in right here because it allows us to bring core data together with our systems to make all of it way more valuable.”

Baker stressed the inefficiency of “data islands,” characterizing them as a “big waste of time.” By aggregating and normalizing data on a single platform, Kinective intends to enable institutions to “apply AI models so they can start to do really clever things, like determine what a next best offer could be for a consumer, or make some observation about cash optimization.”

Enhancing Document Workflow and Notarization with Epic River

The acquisition of Epic River strengthens Kinective’s e-signature and document workflow capabilities, supplementing IMM’s technology. Baker described Epic River as a “great company, small but mighty team, great product.” He explained the motivation in acquiring Epic River was to “increase our muscle around e-signature and document workflow,” and to gain a “big relationship with Finastra” which Kinective previously lacked.

A significant benefit of this acquisition is Epic River’s advanced solution for digital and remote online notarization. “Epic River has developed what I think is the best solution for digital, electronic notary – both remote online notary and digital notary,” said Baker.

He highlighted the critical role of electronic notary in digitizing workflows. “The number one thing that breaks [the workflow] today is notary,” he explained. “This solution allows an institution to keep it digital all the way through, even for a notarized document.” Furthermore, Baker pointed out the security benefit. “If I’m running an electronic notary solution, that’s my data, and I keep that record of the notarizations that happen.” This contrasts the traditional “wet” notary, where the notary takes their book with them if they move to a new employer.

The Future of Branches: Digitization with a Human Touch

Baker believes that the physical branch is far from dead. He told Finopotamus, “Even as institutions consolidate through mergers and acquisitions, the consolidation of branches happens at a much slower rate,” adding, “You actually see in today’s market, some of the biggest institutions in the market building branches. The big six are collectively building hundreds of branches, which is really interesting.”

Baker continued, “This demonstrates as much as anything, the branch is not dead. People want that physical presence.” He strongly believes that community institutions excel at “engaging with the community,” and that “it’s really hard to do that if you don’t have a physical presence where you can have that relationship development.”

Kinective’s solutions for branch automation modernize the branch experience while maintaining this crucial human element. Baker cited the goal of “digitization with a human touch.” He explained how Kinective’s technology allows for a withdrawal signature to be sent via text message and signed with a finger, and then automatically archived in the core. He also described the company’s use of GemView signature capture devices, which enable “a face-to-face, richer human experience, but it’s still a digitally enabled experience and preserves that digital chain of the workflow.”

According to Baker, digital is here to stay, but it still needs to evolve. “Digital needs to serve the experience better,” he noted, especially as smaller institutions compete with larger banks. He added, “They’ve got to embrace the idea of an experience that’s more personal. Otherwise, why do I choose credit union A over megabank B down the street?”

A Unified Vision for the Future

Baker made it clear that Kinective’s ongoing acquisition strategy, including potential future acquisitions, is driven by a clear vision: to simplify the world for financial institutions and assemble a sensible platform where all pieces add value and fit together seamlessly. “The reception in the market been good,” he noted. “Everybody seems to understand what we're doing, so I'm committed to that.”