CSI buys Qolo to expand commercial banking and payments tools

CSI has acquired Qolo, adding treasury, payments and card infrastructure to its commercial banking software suite for community financial institutions. The company said the deal is intended to help smaller banks offer more flexible deposit structures, real-time cash visibility and broader commercial card programs, while extending CSI’s presence among fintech and B2B payments providers.

CSI, a provider of financial software and technology, said Qolo’s platform will be used as an orchestration layer across payments, accounts and business workflows. The technology is expected to connect with CSI’s core banking platform, digital banking products and application programming interface capabilities to support pre-integrated commercial banking services.

The acquisition reflects demand from businesses for faster payments, clearer views of cash flow and financial tools that sit inside the systems they use day to day, according to CSI. Datos Insights research cited by the company found that 85% of small and midsize businesses would choose their primary financial institution over a fintech or larger bank if it offered comparable capabilities.

Capabilities added through Qolo

CSI said Qolo adds three main product areas to its commercial banking infrastructure.

• A real-time account ledger, designed to give banks and business customers immediate visibility into balances, transactions and authorizations.
• Multi-rail payment orchestration, which routes domestic and international money movement across multiple payment networks and business processes through a unified engine.
• Expanded card issuing and processing, including debit, prepaid, virtual and secured corporate credit card programs.

A ledger is the system of record for account activity. A real-time ledger updates balances and authorizations as events occur, which can reduce delays between a payment instruction, an approval and the balance information available to a bank or customer. Payment orchestration refers to software that selects and coordinates different payment rails, such as card, bank transfer or other networks, depending on the use case and geography.

Nancy Langer, president and chief executive of CSI, said in the company’s announcement that community financial institutions have local relationships and market knowledge, while their business customers increasingly need sophisticated banking capabilities that fit into daily operations. She said the acquisition also expands CSI’s ability to support fintechs and B2B payments providers as more financial services are embedded in business workflows.

Qolo serves fintechs and B2B payments companies that use its infrastructure for card issuing, multi-rail money movement, virtual account management and embedded ledgering, according to CSI. CSI said those customers will gain access to its scale, compliance expertise and long-term investment capacity.

Patricia Montesi, Qolo’s co-founder and chief executive, said banks and fintechs face related problems, including fragmented vendors, disconnected payment rails and manual workarounds. She said joining CSI would support further investment in infrastructure for modern financial services.

CSI said the transaction supports its broader vertical banking strategy, including commercial banking packages tailored to industries with specialized deposit, payment and workflow requirements. D.A. Davidson & Co. served as Qolo’s exclusive strategic and financial adviser, and Cooley LLP acted as Qolo’s legal counsel.

This story draws on original reporting from Finextra Research.