Nasdaq to buy Verafin for $2.75B in cash
Nasdaq Inc. agreed to acquire Verafin, a provider of technology that fights financial fraud and money laundering, for $2.75 billion (U.S.) in cash.
Verafin, based in St. John’s, N.L., provides a cloud-based platform that helps customers detect and report financial crimes, according to a statement Thursday. Its current clients include 2,000 banks and credit unions in North America, and Nasdaq aims to expand those services to the largest banks and second-tier institutions, including in Europe.
“Financial crime, including money laundering, is among the biggest and most difficult challenges that banks face around the world,” Nasdaq chief executive officer Adena Friedman said in a presentation. “Regulators are becoming more demanding of banks, brokerages, fintechs and other financial intermediaries as the front-line defence against criminals using the financial system to fund their illicit activities.”
About $2 trillion is laundered a year, and the $12.5-billion market for combating financial crime is expected to grow 17 per cent through 2024, Nasdaq said. The purchase fits a strategy laid out at the company’s investor day earlier this month, when Friedman said it was seeking acquisitions to provide more software and analytics to the financial industry.
Many banks are using old systems that aren’t very effective at detecting money laundering and financial crime, Valerie Bannert-Thurner, a senior vicepresident at Nasdaq, said in an interview. “It’s such a big problem, fines are huge and it’s a big worry for CEOs for banks, and it has to be solved better.”