Truist Financial Corp. has expanded its reach in artificial intelligence by acquiring Monday a series of assets from Zaloni, including its Arena platform. Terms were not disclosed.
Zaloni’s operations will remain in Raleigh, where it has 20 employees. Among its customers are Laboratory Corp. of America, TIAA affiliates and what is described as a Top-10 global bank
Truist said the acquisition will “accelerate its data governance, metadata management, advanced analytics, and artificial intelligence and machine learning (AI/ML) programs.”
Most of Zaloni’s top management, including founder Ben Sharma, as well as product, engineering and date professionals, will become part of Truist’s Enterprise Data Office, led by chief data officer Tracy Daniels.
“Truist is making investments to continuously grow and evolve with our clients’ banking needs,” Scott Case, chief information officer at Truist, said in the news release.
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“In partnership with Truist Ventures, we identified the Arena platform as an investment that will help us deliver better financial experiences, advance our strategy and demonstrate our purpose to inspire and build better lives and communities.”
Truist Ventures, based in Charlotte, debuted in September 2020 as the corporate venture capital arm of the bank. The group is designed to “focus strategic partnerships and investments in innovative companies within and beyond traditional fintech” for the benefit of Truist customers.
Zaloni’s Arena Data Governance platform delivers trusted data for advanced analytics and AI/ML use cases using an intelligent and collaborative data catalog, automated governance, and unified observability to reduce information technology costs and accelerate time to insight.
“This acquisition validates our philosophy that data is a strategic asset and requires a product-oriented mindset and discipline,’ said Susan Cook, chief executive of Zaloni.
“Our Arena product and our incredibly talented people will serve as a catalyst for Truist, accelerating its growth and vision of becoming a leader in data.”
Zaloni has offshore operations that “will continue serving their current customers while also providing technology delivery services to Truist.”
Janney Montgomery Scott analyst Christopher Marinac said Zaloni Arena "allows a company to make unique data analysis that take historical behavior and then predict future needs ."
"We also understand that Zaloni has been proactive in digital sssets. This represents a new operational channel for all large banks with formation of smart contracts and other tools on Blockchains or digital ledgers."
IT acquisition pattern
The Zaloni transaction represents the latest push into advanced information technology by Truist and its predecessor BB&T Corp.
In May, Truist Ventures acquired financial mobile app Long Game for an undisclosed amount. Long Game, a female-led business, offers a gaming-oriented strategy that connects consumers with banks utilizing prize-linked savings and casual gaming.
Truist also said that Long Game is aligned with Truist’s existing technology stack, “which will increase client engagement, savings and financial education, particularly among millennial and Gen Z populations.”
Marinac said that Truist "has been focused for several years on utilizing its own customer data to better customize products and responses to customer needs."
He cited SunTrust Banks Inc.'s IT efforts before it was purchased by BB&T for $33.4 billion in December 2019.
"In our view, this is a superb example of Truist being proactive to build leading tools in both digital areas and predicting future behaviors," Marinac said.
"This can lead to both higher revenue generation, plus better risk management tools. These combine to support higher earnings and shareholder returns.
"While Zaloni is surely a small transaction for Truist, it could have real strategic value as the company spends slightly higher expense pace in future periods."
In March, Truist was among five of the largest national and super-regional banks that contributed to a $40 million fund raise by Greenwood, a Black- and Hispanic-owned financial technology startup company.
Among the investors are Bank of America Corp., JPMorgan Chase & Co., PNC Financial Services Group Inc., and Wells Fargo & Co. The other named investors are MasterCard, SoftBank and Visa.
Greenwood, based in Atlanta, focuses on providing online banking services and innovative products to support Latino- and Black-owned banks, along with “give-back programs” focused on Black and Latino causes and businesses. Among Greenwood’s co-founders is Andrew Young, the former mayor of Atlanta and U.S. congressman, and rapper Michael “Killer Mike” Render.
King speech
Going back to February 2019, Kelly King, chairman and chief executive of BB&T, cautioned local business leaders of the need to update their economic formulas to reflect the ever-accelerating nature of technology.
It’s now more a function of blending technology with a consumer touch to create the trust necessary to build and sustain profitable relationships, King said.
King spoke before about 550 attendees at the State of the Economy luncheon for the Winston-Salem Chamber of Commerce.
The speech came two days before BB&T announced on Feb. 7, 2019, what became a $33.4 billion purchase of SunTrust Banks Inc. that closed in December 2019.
The presentation represented King’s sharing, like a minister preaching the Gospel, information on the internal digital-driven restructuring that BB&T began in 2017 known as “disrupt or die.”
The initiative focuses on pouring resources into its digital platform and information-technology network, increasing spending on its community bank unit, and relying on organic growth and flat expenses.
King said the “disrupt or die” concept was designed “to simply get everyone’s attention that this is a market where you simply have to make major, tough decisions to pare away expenses from the old bank to build a new bank of the future.” In January 2019, King told analysts that the theme has been shifted to “disrupt to thrive.”
“If you don’t disrupt yourself, Amazon or someone else will, and you may be in extreme difficulty or you may not be around in five years regardless of how well you are doing today,” King said.
King said the paradigm shift is happening in real time as consumers “shift their satisfaction demands.”
“People have decided that they demand more convenience. They want what they want when they want it, right here, right now.”
