GLASTONBURY, Conn. – With each passing year, Open Solutions Inc. is making it clearer and clearer that it is much more than just a core processing firm. The Glastonbury, Connecticut-based company once again expanded on its product line by acquiring voice response technology firm Maxxar Corporation based out of Wixom, Mich. OSI will pay $6.5 million in cash for Maxxar, which had revenues of $5 million last year. Maxxar will operate as a wholly-owned OSI subsidiary, reporting to OSI's Strategic Solutions Group. It will maintain its own branding, offices and management. OSI made its mark in the credit union space through its innovativeness on the processing side with its open architecture and relational database backbones, but its leaders want everyone to know it is not a one-trick pony. Over the years it has added a number of ancillary products (many through acquisitions) including relationship management applications, Internet banking, cash management products (including ACH, balance reporting, wire initiation), accounting solutions, image-enabled item processing, and commercial and mortgage loan origination software. It has even broken the company into two focuses, the core processing side and all the other products which are under OSI's The Strategic Solutions Group, where Maxxar will fall. This deal demonstrates OSI's new financial strength since going public last year. Through the issuance of stock it has become a firm with capital that can help it compete with other tech firms for acquisitions. It couldn't play in those waters as much as a private company because of cash flow. Acquisitions have shaped the current CU tech landscape and have helped some large players with little stake in CUs get into the industry on a much bigger scale, such as Jack Henry & Associates via its acquisitions of Symitar Systems, CU Solutions and Peerless; and more recently Fidelity National's recent acquisition of Aurum Technology. This deal also brings together two companies strong in the credit union space. Maxxar has been serving credit unions with touch tone banking since the `70s. It has more than 2,000 credit union clients. Maxxar's technology has evolved dramatically from just touch-tone systems; it now has products that allow members to apply for loans over the phone using voice recognition. Its latest product is its Total Natural Transaction (TNT) solution, which supports Natural Language Speech Recognition, Speech-enabled Lending, Text-to-Speech, Proper Name Recognition, Address Recognition, Speaker Verification and Touch Tone Interactive Voice Response (IVR), on a single hardware/software platform. Mike Nicastro, SVP and General Manager of Open Solutions' Strategic Solutions Group, said with any company OSI acquires, its technology is the most important asset. “Voice technologies are one of those delivery pieces that we don't own. They have good solid voice recognition technology, and we are pleased with their new TNT platform. While voice activated technology is not leading edge in anyone's industry, it is the next step for the community financial institution. There's still a ton of touch-tone out there; it's time to really expand and change that as you look at what you can do with voice activation,” said Nicastro. Maxxar's business plan from the beginning was not to have a massive sales force to market directly to credit unions, but rather partner with core processors to reach their CU clients. Maxxar and OSI have had that kind of relationship for many years, and Maxxar has deals with just about every major CU data processor. With it now being an OSI subsidiary, will that hurt relationships with other CU processors? Max Bishop, one of Maxxar's owners, and its VP of sales and marketing doesn't think so. Bishop said for years it has had relationships with competing vendors and has always maintained individual, unique relationships with each of them and works to meet each of their needs. He said given that OSI is going to allow Maxxar to keep its name and branding and operate independently as a subsidiary, their same business practices will continue. Nicastro also pointed out that tech firms in this space have come to realize that they can't be all things to all credit unions – they need to have third-party relationships because their CUs demand those products. Maxxar employs 35 people. While its headquarters are in Wixom, Michigan (40 miles Northwest of Detroit), it has employees in Toronto, Orlando, Detroit and Chicago. It's a company that relies on itself to drive innovation. “We're very heavy in the engineering area. We have our own R&D group. We do a lot of development,” said Bishop. Bishop has seen the business evolve over the years, and while the new voice recognition products have that whiz-bang factor, many credit unions are still happy with old-fashioned touch tone-banking. How do you spur them to change? “Change is always a difficult thing for people. What we have found over the years is there has to be something in it for them, and that's what we found in natural speech recognition. The payoff is convenience. It can be accessed from anywhere. It's for those who don't like touch-tone. It's very intelligent, it will ask them questions. It's a much more human type of a transaction,” said Bishop. The payoff for CUs? It can be about 35% faster than a credit union employee having to take a loan application. While Maxxar is strong in credit unions, banks and other financials, it also serves government and many large corporations. On the banking side, one of its largest clients is Bank of America. However Bishop said Maxxar has much better penetration among CUs than banks. He hopes it can get a better foothold with banks via OSI banking clients. [email protected]