CREALOGIX’s front-end banking applications have gained strong credence in the Swiss market, where the group’s core online/mobile applications are in exclusive use in 11 of the top 30 Swiss banks. Crealogix Holding AG (SIX:CLXN) is now expanding the opportunity globally, primarily targeting the UK, Germany and Austria as well as the nascent Asian market. The group returned to EBITDA profitability in H116 and in our view is well positioned to benefit from attractive business drivers as traditional banks are forced to update their technology to maintain competitiveness against nimble fintechs entering the space.
Digital banking in strong growth phase
Digital banking is in a major growth phase globally, boosted by the advent of smartphones and tablets; smartphones are expected to take 80% of the banking market by 2020 (AT Kearney). This is driving increasing spend on front-end systems and CREALOGIX expects the front-end system spend to rise to c 50% of banks’ total IT spend within five years, from c 20% at present and c 5% traditionally.
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