IBM and Oracle named as potential Monitise buyers

IBM and Oracle have emerged as potential candidates to take over British mobile software company Monitise.

In January, Monitise said it was reviewing its options, including the possibility of the company being taken over. This followed news that it might report a drop in revenues.

A company statement said: “The board believes that the company has an exciting future as an independent business, however it recognises that there may be other businesses which could leverage Monitise’s capabilities for digital commerce enablement to significantly accelerate the growth of the business and take maximum advantage of the growth opportunities in the market today.”

According to Sky News, several US technology giants, including Oracle and IBM, are showing interest in acquiring Monitise.

In today’s colliding IT and finance sector, this is hardly surprising. Companies such as Google, Amazon and Apple are all entering the financial services sector, offering services such as payments and information enrichment.

Companies such as these, as well as the likes of IBM and Oracle, could add mobile financial services software to their portfolios. A new breed of challenger banks is also emerging, using technology as a selling point.

The future is going to be more about IT-driven mobile services, according to one source in banking. “The big banks cannot do it all themselves and there is an opportunity for suppliers, including startups,” the source said.

New banks are also emerging as a result of changes to the regulatory requirements around setting up a bank. Mobile services are increasingly important in banking, and companies supplying off-the-shelf mobile banking software will enable banks to get mobile services up and running quickly.

Gareth Lodge, financial services IT analyst at Celent, said Monitise will be an attractive buy for somebody, potentially offering “a jump-start in payments”. 

In terms of users, Lodge said Monitise is probably one of the biggest operators, having gained a number of US banks as customers when it acquired ClareMail for $173m in 2012.

Monitise is in the middle of changing its business model, moving to cloud-based subscription model. This could fit in with what IBM has already done and Oracle’s move into the cloud.