Banking software company Temenos has agreed to acquire digital banking software-as-a-service (SaaS) firm Kony for $559 million and an earn-out of $21 million, subject to regulatory approvals.

The acquisition significantly enhances Temenos’ scale and capabilities in the US and accelerates digital front office product Temenos Infinity.

Thomas E. Hogan, chairman and chief executive of Kony, will become president of Temenos North America and join the executive committee, effective on the acquisition closing date.

Kony has achieved rapid growth with both top tier and mid-market banks in the US and internationally with its Kony Digital Banking Experience product (Kony DBX). With 1,500 employees and expertise in digital and cloud technologies, it has been helping banks with digital applications and its development platform, served through a cloud-hosted SaaS model. The Kony DBX product includes a suite of mobile banking apps which support conversational interfaces, artificial intelligence, augmented reality and wearable technologies.

Temenos, which also recently acquired Avoka, is banking on its Infinity product to push growth, offering customer acquisition and onboarding, customer retention and marketing, plus modules supporting payments, wealth advisory, financial crime, compliance and analytics.

Max Chuard, chief executive at Temenos, said: “The acquisition of Kony is highly strategic and will allow us to grow both our US and our digital front office business faster, while being highly accretive and synergistic to the rest of our business.

“We are acquiring a digital front office product that has already been successful in the US market and is connected to most third party cores, we are also adding a significant amount of exciting functionality and ease of generating customer journeys and experiences that will accelerate Temenos Infinity, providing banks in both North America and internationally with an unrivalled customer experience and omnichannel banking product.”

The transaction is due to be completed by early in the fourth quarter of 2019.

Temenos will also strengthen the North America Leadership team with Emily Steele as executive vice president for field operations and delivery for Temenos North America. She joined Temenos in 2015 by way of the company’s acquisition of Akcelerant and has held a number of key roles.

Meanwhile, Jeffery Kendall will become executive vice president for North American sales and distribution, moving from the position of executive vice president and general manager of banking at Kony.

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