HCL delves deep into Avaloq with the Confinale acquisition

The Situation: Mergers and acquisitions across the tech industry are at full throttle, particularly given the one-two punch of resignations and wage inflation. Corporate consolidation, as they say, is the road most traveled when companies want to diversify, grow their customer base, or weed out their competitors. These days, it may be the most direct path to obtaining specialized talent. The lure of specialized talent to buttress its recent partnership expansion with Avaloq led HCL to Confinale, a Switzerland-based Avaloq Premium Implementation Partner. This is a boon for capital markets firms seeking Avaloq capabilities.

HCL’s acquisition of Confinale is timely and deepens the Avaloq partnership to serve financial institutions

In April 2022, HCL enhanced its partnership with Avaloq to help enable its financial institution customers to leverage Avaloq’s technology and services more effectively. As part of the now global partnership, HCL is investing in a lifecycle management center for Avaloq clients and is upping its Avaloq-focused training and development capabilities for HCL’s wealth management resources. A month later, HCL announced its acquisition of Confinale, one of four Avaloq Premium Implementation Partners globally.

Founded in 2012, Confinale focuses on IT consulting in the banking and wealth management sectors and has a large pool of Avaloq-certified specialists in Europe. It has in-house developed products and solutions that accelerate the implementation of the Avaloq platform. HCL couldn’t have timed its acquisition of Confinale better, as it gets instant access to an Avaloq-trained talent pool. This may well be HCL’s quickest path to building a stable of Avaloq specialists. It will also promote the adoption of Avaloq’s products and services globally. Through this strategic acquisition, HCL will increase its global wealth management market footprint, emphasizing Avaloq consulting, implementation, and management capabilities. Capital markets firms currently working with Avaloq or those considering embracing technology modernization, particularly in wealth management, now have an additional viable partner option. The enhanced Avaloq partnership plus Confinale acquisition showcase an intentional sequence of market activation activities.

Confinale focuses on banking knowledge, Avaloq, and integration

The Confinale team has specialists in five banking sectors: wealth advisory, tax, compliance, regulatory reporting, and credit business. It is also adept at integrating third-party applications and data suppliers into core banking systems.

In recent HFS conversations with HCL’s capital markets leadership, the firm shared it has been endeavoring to transform its capital markets practice by investing in customer experience and employee experience. It launched NOVUS earlier this year as part of its updated proposition for capital markets. NOVUS delivers a bouquet of capabilities across pre-trade, trade, post-trade, wealth, and asset management on a common foundation of enterprise services, execution services, and integration services, providing consistent governance. Core services, shared services, digital services, and customer experience within each offering are composable to fit specific customer needs. Confinale’s in-house intellectual property snaps into HCL’s NOVUS framework to enhance its specialized vertical domain capabilities for wealth management clients.

The Bottom Line: Capital markets firms are ready for their turn with digital transformation. HCL’s Avaloq-focused acquisition plays to this need.

HFS is compiling its forthcoming Capital Markets Services Top 10, scheduled for publication in June 2022. One of the key emerging themes of the study is that much of the flashy, often front-end, digital investment poured into financial services firms has largely benefitted banking. The buy-side, sell-side, and market infrastructure players comprising capital markets are getting serious about the hallmarks of digital transformation: customer experience, employee experience, and the modernization that comes with it. Aside from the robo-advisory attempt to reach a broader and deeper segment of wealth management clients, wealth management firms are hungry for front-to-back digital innovation and the platform modernization that can help them nimbly offer new products and offerings. HCL’s investment in Avaloq capabilities aims to address this need.