Tier1 Financial Solutions, a provider of client relationship management software for banks and Wall Street firms, is broadening its reach.
The company announced Friday that it had acquired Alessa, a maker of compliance and fraud prevention software. Alessa is used by banks, credit unions, fintechs and others to detect financial crimes starting from the point a customer is onboarded and over the life of the relationship. If the software detects risky or criminal activity, the company will help banks report such activity to regulators.
The acquisition will let both companies cross-sell to each other’s bases.
“The name Tier1 implies focusing on the enterprise banks,” said Jiro Okochi, Tier1's CEO. “But in October we launched an effort to democratize capital markets and investment banking customer relationship management for any size shop. Alessa has done a great job of going after some of the middle-market financial institutions, so it’s a complementary fit.”
Okochi also values the opportunity to use Alessa’s artificial intelligence and machine-learning technology to help Tier1’s front-office sales and trading clients and provide a more digital, rather than manual, onboarding process for bank customers.
“Our understanding these days is compliance reaches more and more into the front-office workflow, where paperwork and screening are more rigorous and more on the front end of the relationship than ever before,” he said. “The customer experience can be painful if the customer is waiting to do their first transaction and the bank is still processing paperwork.”
Both companies have a significant presence among North American financial institutions.
Tier1 was founded in Toronto (it also has offices in New York and Sudbury, Ontario) and counts six of the top 10 Canadian banks by assets as customers, including Bank of Montreal. Overall, 75% of its bank customers are located in North America. About half of Alessa’s financial institution customers are in North America. Alessa is also based in Toronto.
Discussions between both parties began in late fall, and the entire process happened virtually — which both Okochi and Andrew Simpson, chief operating officer of Alessa, say had its advantages, even though the two teams have not yet met in person.
“Trying to get an in-person meeting now would be really difficult and takes time to plan,” Simpson said. “Now we can say hey, can we get an all-hands call in three hours or tomorrow. Previously that would have taken a couple of weeks to organize.”
