Intuit Quickens Pace Into Online Banking
The financial management software vendor will acquire on-demand banking services provider Digital Insight, which will allow Intuit to blend financial management workflows with online banking.
Posted Nov 30, 2006
Page 1
Intuit is cozying up to the online banking market: The financial management software provider revealed Thursday that it had signed a definitive agreement to purchase Digital Insight, a provider of on-demand banking services to U.S. midmarket banks and credit unions. The deal, valued at about $1.35 billion (Intuit will shell out $39 per share in cash for each Digital Insight common share), is subject to customary closing conditions, but expected to close in 2007's first calendar quarter. Digital Insight will continue to operate from its current facilities in California and Georgia, becoming part of a new financial institutions business division within Intuit once the acquisition has closed, according to Intuit. Jeff Stiefler, Digital Insight's chairman, president, and CEO, will take the helm as the unit's president. Intuit, which provides popular financial management offerings for SMBs and consumers such as QuickBooks, Quicken, and TurboTax Software, contends that it will be able to combine workflows in its financial management tools with Digital Insight's online banking functionality to create better-value offerings. Digital Insight's business solutions portfolio includes a corporate banking suite, business banking offerings, member business services, and small business banking solutions. Its consumer solutions portfolio features several offerings such as Internet banking solutions, a management console suite of administrative, marketing, and analytical tools, a Web platform, online bill payment and presentment products, customer support products, and a marketing suite. The two companies have been working as partners during the past year to pursue the online banking opportunity, Steve Bennett, Intuit's president and CEO, said during a conference call Thursday morning. The combined companies will serve more than 5,000 financial institutions, about 7 million small businesses, and about 25 million consumers. "This transaction is all about increasing revenue growth rates--Digital Insight's and ultimately Intuit's--by enabling financial institutions to reap greater benefits from online banking," Bennett said. "How? By dramatically improving online banking capabilities and ease of use, so financial institutions attract more new users and generate more revenue from existing clients." He added that "We want to be an even stronger partner with financial institutions to deliver next-generation online banking solutions, accelerate adoption rates, and to create additional services that better serve their customers and create additional revenue opportunities." This deal moves Intuit up the value chain and positions it closer to the ultimate finance gatekeepers--the banks, according to George Goodall, research analyst at Info-Tech Research Group. "Competitors like Microsoft and Sage are gaining ground on Intuit's QuickBooks while vendors like H&R Block and CCH are retrenching in the tax preparation market," he says. "This deal better positions Intuit as a true enterprise software vendor." Goodall adds, though, that Intuit has to diversify its business. "It is very reliant on tax preparation software and this strategy has created dramatic seasonality in its revenue pattern," he says. "Intuit's current model is also very reliant on reseller channels to reach the consumer and small business market. Digital Insight gives Intuit an opportunity to focus on larger deals with much larger accounts." Related articles: Intuit Gets Dynamic with QuickBase SMBs Are Shopping For ERP and CRM Solutions Trust Will Drive Market Share for Banks
Page 1
To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
Related Articles
From hodgepodge to homogeneity, Intuit provides a new home for customer information.
Popular Articles

Home | Get CRM Magazine | CRM eWeekly | CRM Topic Centers | CRM Industry Solutions | CRM News | Viewpoints | Web Events | Events Calendar
DestinationCRM.com RSS Feeds RSS Feeds | About destinationCRM | Advertise | Getting Covered | Report Problems | Contact Us