New global division brings banking and insurance technologies together, with an eye toward ongoing M&A
Volaris Group's financial services portfolio has reached a critical mass. With 14 businesses under its umbrella as of November 2022, the portfolio has taken on a new identity as Vencora, a global division focused on growth through acquisition and excellence in operations.
The launch of Vencora comes two years after Volaris successfully introduced two other new brands: Modaxo as its transit-focused portfolio and Lumine Group as its communications and media portfolio.
Acquired Knowledge magazine caught up with Vencora CEO Mike Dufton to check in on the early days of the new division.
When I joined Volaris, it was very much with the intention of building out a financial services vertical. You could argue this is a plan that has been more than ten years in the making.
-Mike Dufton, Vencora CEO
Why make the decision to launch Vencora now?
One of the great things about Volaris is having the opportunity to learn from other groups’ experiences. Watching the success of the Volaris transit portfolio being spun out through Modaxo—particularly as it relates to M&A—gave us the inspiration and confidence to move forward with Vencora at this point.
I had a front-row seat to the creation of Modaxo, and I was actively involved in discussions as the new entity was being created. I've been able to see first-hand the benefits they've gained by having their own brand identity, being able to highlight their focus on a single vertical, and nurturing a group of companies that all want to solve problems that matter in the industry.
We’ve had the best of both worlds by having the support of a strong parent like Volaris behind us, but also the freedom to try new things.
-Mike Dufton, Vencora CEO
What support has Volaris has given the financial services portfolio up until this point?
We’ve had the best of both worlds by having the support of a strong parent like Volaris behind us, but also the freedom to try new things. The businesses that have grown under Volaris Group’s leadership have had the benefit of mastering the skills needed to run a great software business. Volaris has been instrumental in helping us to see the value of branding, and has supported the ongoing development of all our leaders.
On the M&A side, Volaris has taught us best practices for how to acquire software companies, and even guided us to experience new ways of doing acquisitions.
What currently makes the financial services industry exciting to watch?
The financial services sector is typically one of the top three or four industry segments in any particular market. On top of that, the industry is undergoing a tremendous transformation right now, with a lot of new entrants trying to disrupt the market.
Mike Dufton speaking at Activate, an annual internal conference for Vencora team members to network, learn, and share best practices.
Tell us more about how these new entrants are changing the industry.
The relationship with consumers has changed dramatically in the last 10 years. Traditionally, there were a small number of large and powerful financial services organizations, and the consumer felt fortunate to have the opportunity to work with one of them.
Over the past decade, the industry has become more disintermediated. New players, like fintech and insurtech companies, are entering the market with a different value proposition. Their view is that the consumer is at the center of the relationship. Their promise to the consumer is: “We will meet your needs, we will make it easy to do business, and we will be more cost-effective.”
How does the trend of open banking fit into the changes you see in the industry?
Open banking or open insurance are about giving more control to the end consumer and giving them the ability to consent to what they'd like to do with their personal data. It’s also about making it easy for consumers to share personal information across multiple organizations they want to do business with.
Consumers want to have the confidence that the data that they share is protected, transferred, and shared in a secure fashion. As more people embrace mobile technologies and become comfortable with using easier and simpler devices, they want the ability to conduct business as seamlessly and effortlessly as possible. So, large enterprises that don't adapt to the shifting landscape run the risk of being left behind.
You’ve described the trend so far from the consumer's perspective. What does the trend look like from the bank or insurer’s perspective?
The dilemma every bank or insurer faces is that implementing these large systems is incredibly costly. Migrating to a new technology is expensive and time-consuming and competes with other priorities banks and insurers face – the most significant and important of which is maintaining regulatory compliance.
Open banking is really trying to find a delicate balance of recognizing that consumers need to have control and power over their personal information, while creating a framework that makes it easier for banks or insurers to protect the significant investments they’ve made in infrastructure and technology. Companies that we work with are often providers that understand the data and the needs of the customers, and they are well-positioned to help their customer base understand the most efficient ways to access that information.
At the core of it, open banking for the consumer means: ‘I should have the right to choose what institutions do with my personal information.’
-Mike Dufton, Vencora CEO
Vencora’s tagline is “Stronger Together”. Can you give an example of how your portfolio companies make each other stronger?
Vencora companies can find opportunities in the broad range of products, services and technologies that can be leveraged across clients.
For example: One of our portfolio companies, Kaboodle, is creating a data integration hub to simplify the process of exchanging data more freely between various systems and technologies. They are now offering their solution to a client from another portfolio company, SSP, and entering a totally different geography.
The partnership enabled SSP to bring a new capability to their customer set, and for Kaboodle to enter a new market. Both companies were able to enjoy the benefits of expansion and could accomplish it with a friendly partner, in a scenario where the risk of making a mistake was dramatically reduced and which led to a successful outcome for the customer.
I have learned even more about running software businesses in more than 10 years at Volaris than I did in the 15 years that preceded my time here.
-Mike Dufton, Vencora CEO
What’s your own background working in financial services technology?
Prior to joining Volaris, I spent approximately 20 years working in banking and insurance technology, including as the CEO of three different enterprises that focused on meeting the needs of insurers and banks on a global scale. I saw how technology evolved over time for large enterprises and small, early-stage startups, and I worked for businesses with strong service orientations. I spent time looking at the benefits of offshoring and how to support clients in a high-cost market with the resources of a lower-cost market.
But I have learned even more about running software businesses in more than 10 years at Volaris than I did in the 15 years that preceded my time here.
What’s your advice to leaders of companies that join Vencora?
A lot of CEOs come into the Vencora ecosystem thinking they've got all the answers already. I probably made that same mistake when I first came in, because I'd already run big companies. But there's still a ton to learn.
That value of continuous learning is the secret sauce of what we do here. People that embrace continuous learning will have a wonderful career inside Vencora, because they've never had access to so much information that they can use to shape and form strategies.
Look into a crystal ball and give us your long-term vision for Vencora.
Over time, with our focus of continuing to invest in, and acquire companies, we feel extremely confident that the number of companies under the Vencora brand is going to grow to a number that's multiple times larger than what that number is today. We've achieved critical mass already to start sharing meaningful information about how to service the needs of the financial services market as a technology provider.
As we continue to add more businesses to the fold, it will give us access to a greater group of customers, new markets that we can enter, and a broader range of knowledge to share. Vencora sees a sizable opportunity to address.