Q2 Holdings, Inc. provides digital solutions to financial institutions, financial technology companies, or FinTechs, and alternative finance companies, or Alt-FIs, seeking to incorporate banking into their customer engagement and servicing strategies.
The company’s solutions transform the ways in which financial institutions and other financial services providers engage with account holders and end users, or End Users. The company’s solutions comprise a broad and deep portfolio of digital bank...
Q2 Holdings, Inc. provides digital solutions to financial institutions, financial technology companies, or FinTechs, and alternative finance companies, or Alt-FIs, seeking to incorporate banking into their customer engagement and servicing strategies.
The company’s solutions transform the ways in which financial institutions and other financial services providers engage with account holders and end users, or End Users. The company’s solutions comprise a broad and deep portfolio of digital banking solutions, digital lending and relationship pricing solutions, Q2 Innovation Studio, and Helix. Q2 Innovation Studio leverages Q2's open technology platform to enable a partnership ecosystem, allowing the design, development, and distribution of innovative products, services, features, and integrations on Q2's digital banking platform. Helix serves as a cloud-native core and banking as a service, or BaaS, solution. The company purpose-builds its platforms and solutions to enable success for its customers and partners by allowing them to digitize their operations and offerings, differentiate their digital brands, integrate traditional and emerging financial services, and ultimately, enhance their End-User acquisition, engagement and retention.
The company’s expanded collection of solutions spans digital banking, digital lending and relationship pricing, regulatory and compliance, risk and fraud, account switching, data-driven sales enablement, spending insights and portfolio management, and also includes its open platform solutions as well as its core and BaaS offerings. The company serves account holders and borrowers across retail, small to medium businesses, or SMBs, and commercial segments. As of December 31, 2024, the company had more than 1,200 financial institution customers using one or more of its solutions, including more than 40% of the top 100 U.S. Banks and more than 40% of the top 100 U.S. Credit Unions, based on total assets. As of December 31, 2024, the company had 460 installed digital banking platform customers, and those customers had approximately 24.7 million account holders registered on its digital banking platform.
The company has developed a comprehensive suite of offerings to accelerate and optimize this transformation for its customers, ranging from digitizing entire banks to facilitating partnerships between financial institutions, FinTechs, and Alt-FIs.
The company’s portfolio of digital solutions includes a comprehensive suite of offerings for retail, SMB and commercial banking, onboarding, regulatory and compliance, risk and fraud, digital lending and relationship pricing, open platform solutions, BaaS, account switching and data-driven sales enablement, spending insights and portfolio management solutions, among others. The company’s solutions utilize a software-as-a-service, or SaaS, model designed to scale with its customers as they grow their business, add End Users and expand the breadth of digital services and solutions they offer. On average, Q2 digital banking platform customers have historically grown contracted revenue by approximately 45% within 36 months of implementation.
The company provides digital solutions that are designed to be highly configurable, scalable and adaptable to the specific needs of its customers. The company designs and develops its solutions with an open platform approach intended to provide comprehensive integration among its solution offerings and its customers' internal and third-party systems. This integrated approach allows the company’s customers to deliver unified and robust financial experiences across digital channels. The company’s solutions provide its customers the flexibility to configure their digital services in a manner that is consistent with each customer's specific offerings, workflows, processes and controls. The company’s solutions also allow its customers to personalize the digital experiences they deliver to their End Users by extending their individual services and brand requirements across digital channels. The company’s solutions are designed to comply with the stringent security and technical regulations applicable to financial institutions and financial services providers and to safeguard its customers' data and that of their End Users.
The company primarily sells its solutions through its direct sales organization and the related revenues are recognized over the terms of its customer agreements. The company’s digital banking platform revenues generally increase as its customers buy more solutions from it and increase the number of End Users and companies utilizing its solutions and as those retail users and companies increase their number of transactions on its solutions. The company has invested, and intends to continue to invest, to grow its business by adding delivery and support resources aligned with its growth, developing and acquiring new solutions, enhancing its existing solutions and technical infrastructure and expanding its sales and marketing activities.
Solutions
The company provides digital solutions that transform the ways in which financial institutions and other financial services providers engage with account holders and End Users. The company offers its solutions to financial institutions, FinTechs and Alt-FIs wishing to incorporate banking into their customer engagement and servicing strategies. The company’s integrated, end-to-end collection of solutions and services are designed to enable End Users and customers to engage with and manage financial experiences anytime, anywhere, and from any device, across all devices. The company purpose-builds its platforms and solutions to enable success for its customers and partners by allowing them to digitize their operations and offerings, differentiate their digital brands, integrate traditional and emerging financial services, and ultimately, enhance their End-User acquisition, engagement and retention.
Key Solution Offerings
The company’s portfolio of digital solutions includes the following key offerings:
Digital Banking Platform: The company’s end-to-end digital banking platform supports its financial institution customers in their delivery of retail, SMB and commercial functionalities across digital channels through a single technology platform. The company’s open digital banking platform spans onboarding, banking and a vast set of integrations to third-party financial services across the retail, SMB and commercial segments, and provides its financial institution customers with the tools, knowledge, and access necessary to: monitor and optimize End-User acquisition, engagement and retention; customize and extend the platform; and, improve operational efficiencies. In addition, the company offers a suite of risk and fraud solutions designed to assist its customers in their effort to safeguard the financial service offerings against fraudulent activities. The company’s risk and fraud solutions include a streamlined dispute management solution, assisting customers with Regulation E compliance, and including optional fraud alerts functionality for enhanced security. The company’s risk and fraud solutions also include fraud monitoring and risk reporting capabilities, including real-time validation features to help mitigate fraud. The company’s risk and fraud solutions serve a critical function in assisting its customers with fraud detection and mitigation and underscore its commitment to delivering innovative technologies that prioritize security and integrity in financial operations. The company offers some of the solutions included in its digital banking platform on a standalone basis to financial institutions, as well as Alt-FIs and FinTechs.
Q2 Innovation Studio: The company’s application program interface, or API, and software development kit, or SDK, based open technology platform allows its financial institution customers and other partners to develop unique extensions of and integrations to its digital banking platform, allowing financial institutions to quickly and easily deploy customized experiences and the latest financial services expected by End Users.
Helix: The company’s cloud-native, real-time core processing platform combines the services and functionality necessary for companies and financial institutions to incorporate unique banking services into their digital offerings. The company’s BaaS Helix solutions allow FinTech customers to easily and efficiently incorporate highly personalized financial experiences within their digital offerings without having to independently meet the stringent regulatory and technical requirements applicable to financial institutions and their banking services. As a core, Helix allows financial institutions to launch unique and personalized digital banking services.
Growth Strategy
The company is well positioned to connect and serve financial institutions, FinTechs and other financial services providers as they transform the ways in which they engage, either independently or in partnership, with End Users and to capitalize on the evolving needs and challenges within the financial services industry. The key elements of the company’s strategy are to further penetrate its large market opportunity; expand its relationships with existing customers; and relentlessly innovate to expand its solutions offerings and enhance its platform.
The Q2 Solutions
The company offers a comprehensive suite of over 60 product offerings and maintain more than 1,000 integrations. The company’s solutions are designed to meet the diverse needs of financial institutions, FinTechs, and Alt-FIs, enabling them to deliver unified and robust financial experiences across digital channels. The company designs and develops its solutions with a platform approach intended to provide comprehensive integration between its solution offerings and its customers' and partners' internal and third-party systems. This integrated approach allows its customers to deliver a unified and robust financial experience across digital channels.
The company’s key solution offerings include:
Digital Banking Platform
The company’s digital banking platform allows financial institutions to offer a comprehensive suite of retail, SMB and commercial digital banking services to their End Users through a single technology platform. The company’s open platform architecture, deep integration with other systems and the multi-tenant aspects of its infrastructure, enable it to develop digital banking solutions that allow its customers to harness the power of the information within their other systems to gain greater insights and to improve the overall security of their End Users and themselves. As of December 31, 2024, a substantial majority of its revenues continue to result from sales of its digital banking platform.
Additionally, the company offers the following products that enhance and complement its digital banking platform risk management suite for transaction monitoring and fraud management; advanced security analytics using behavioral analysis and machine learning; remote deposit capture and mobile check-processing solutions; data-driven marketing tools and user analysis features; personal financial management and goal-setting tools; card management and direct deposit switching functionality; and spending insight solutions for SMBs to streamline expense management and provide financial oversight.
Risk and Fraud Solutions
The company’s comprehensive risk and fraud solutions are designed to enhance the security and integrity of digital banking operations. These solutions are integrated into its digital banking platform and can also be offered as standalone products, providing flexibility to meet diverse customer needs. The company’s risk and fraud solutions help financial institutions proactively identify and mitigate potential fraud risks, enhance regulatory compliance, and improve operational efficiency. Key offerings include real-time security analytics and behavioral analysis; event-driven validation for non-transactional fraud management; electronic transaction dispute management; ACH file monitoring and risk reporting; and check and ACH positive pay systems for commercial users.
These solutions leverage advanced technologies, such as machine learning and real-time analytics to provide robust protection. By integrating or independently implementing these solutions, the company’s customers can strengthen their overall security posture; streamline fraud management processes; enhance End User trust and satisfaction; and adapt to evolving fraud threats and regulatory requirements.
The company’s risk and fraud solutions complement its digital banking platform while offering the flexibility to be deployed separately, allowing financial institutions to tailor their security approach to their specific needs and existing infrastructure.
Q2 Innovation Studio
The company’s Q2 Innovation Studio is a comprehensive technology suite that empowers financial institutions to innovate rapidly and efficiently. It consists of four key components designed to facilitate the design, development and distribution of innovative products, services, and features through its digital banking platform:
Customer Program: Provide tools for customer feature development and open API integrations;
Partner Developer Program: Enables collaboration with certified development partners;
Partner Accelerator: Offers pre-integrated FinTech solutions selected by the financial institution; and
Q2 Partner Marketplace: Offers pre-integrated FinTech solutions selected by the End Users.
This ecosystem can reduce time-to-market for new offerings, enhance customer engagement, and facilitate collaboration between financial institutions and FinTechs. It enables its clients to customize their digital banking experience, differentiate their brand, and stay competitive in the evolving financial services landscape.
Digital Lending and Relationship Pricing Solutions
The company’s digital lending and relationship pricing solutions provide comprehensive tools for managing commercial lending deposits and fee-based transactions. These cloud-based, data-driven solutions cater to financial institutions, FinTechs and Alt-FIs, offering advanced capabilities to streamline lending processes and optimize pricing strategies, including advanced loan pricing and negotiation tools; treasury pricing and fee-based service structuring; portfolio management including analysis, performance, reporting and trend identification; AI assistance for relationship managers; end-to-end loan origination and servicing; support for diverse loan types and asset classes; and automation of lending activities.
By leveraging these solutions, the company’s customers can enhance their lending operations, improve decision-making, and deliver more competitive and tailored financial products to their clients.
Helix
The company’s BaaS solution allows FinTechs and financial institutions to incorporate banking services into their digital offerings. Helix empowers its customers to expand their service offerings, enter new markets, and deliver innovative financial products while maintaining regulatory compliance and operational efficiency. Helix provides a cloud-native, real-time core processing platform; integrated issuer processing and identity verification; and access to regulated banking services through Q2's financial institution partners.
Implementation Services, Professional Services and Customer Support
The company seeks to deepen and grow its customer relationships by providing consistent, high-quality implementation services, professional services, advisory services and customer support. The company structures its implementation teams to effectively collaborate with the management and technology teams of its customers ensuring the rapid deployment and effective utilization of its solutions. The company offers customized professional services to assist its customers with their efforts to extend its offerings and differentiate their digital brands. The company engages with select established customers for more tailored, premium professional services, or Integrated Services, resulting in a deeper and ongoing level of engagement with them. Under certain circumstances for its Symphonix lending solutions, the company also partners with third-party professional system integrators to support its customers in the installation and configuration process. These implementation teams develop and execute a coordinated implementation plan for its customers centered around five standard phases of IT transformation projects: initiation, configuration, application testing, limited production and production.
The company’s customer support personnel serve the comprehensive support-related needs of its customers. Due to the highly-regulated and complex nature of the financial services industry, its implementation and customer support teams, including any third-party professional system integrators with which the company partners, must be knowledgeable about its solutions and the regulatory environment in which its customers are required to operate.
Partner Offerings
In addition to its Q2 Innovation Studio offerings, the company’s customers are reliant on an ever-growing ecosystem of third-party digital solutions to complement their financial services offerings, and the company provides a broad range of tools to help its customers efficiently bring them to market. The flexible nature of its solutions, along with its proprietary, highly flexible set of integration tools, allows its customers, third parties, and Q2 to build rapid integrations with its customers' internal and third-party systems to support End-User activities and customer processes. These integration tools connect with a wide variety of third-party applications, allowing the company to seamlessly integrate with its customers' internal and third-party systems, such as account services, payments and imaging. The company’s ability to integrate with these systems enables its customers to offer a comprehensive set of consumer and commercial functionality to their End Users.
Sales and Marketing
The company’s sales and marketing organization is responsible for growing its customer base and maintaining and expanding relationships with its existing customers. The company sells its solutions primarily through its direct sales organization and also through partnerships for select solutions and global regions. The company’s direct sales organization consists of experienced sales professionals who are organized by geography, account size, type of market and whether a prospect is a new or existing customer. Customers are assigned a dedicated representative to provide ongoing assistance in the execution of the customer's digital strategy to meet the needs of its End Users. The company’s sales representatives are supported by its lead generation, solutions consulting, digital strategy and sales operations teams.
The company’s marketing team complements its sales organization through integrated programs for demand creation, pipeline acceleration, customer expansion and brand advocacy. While the financial institution market is well-defined due to the regulatory classification of financial institutions, the markets for FinTechs and other financial services providers are broader and more difficult to define due to the changing number of providers in each market. The company focuses its marketing efforts on sponsorships, highly-targeted tradeshows, publications, digital newsletters, digital advertising, account-based marketing, as well as referral agreements with strategic industry partners. The company’s marketing team also conducts primary research to support its industry thought leadership and to identify emerging trends in End-User behavior and digital activities. The company’s marketing programs primarily target digital transformation, technology, finance, operations and marketing executives, as well as senior business leaders.
Research and Development
The company’s research and development expenses included $143.2 million for the year ended December 31, 2024.
Technology and Operations
The company’s solutions utilize a multi-tiered architecture that allows for scalability, operational simplicity, security and disaster recovery. The company has also developed an internal operations and analytics platform that aggregates and leverages customer instance and End-User experience captured within its solutions to drive future innovation and scale.
The company serves its digital banking platform customers from a distributed cloud which combines multiple third-party public cloud service providers and a private cloud consisting of active-active globally-adopted ANSI/TIA-942 Telecommunications Infrastructure Standard data centers managed by a co-location partner. The company’s digital lending and relationship pricing, Helix and some of its digital banking platform solutions are hosted by third-party public cloud service providers, and it is in the process of migrating the computing, storage and processing of its digital banking platform solutions from its third-party data centers to third-party public cloud service providers. All of its hosting environments are under its security posture and compliance stance. The company integrates various solutions together so that it is a seamless experience to its End Users, minimizing the impact and relevance of any one component on its combined distributed cloud hosting environment.
The company utilizes prevailing industry configurations to minimize service interruptions and regularly consider and implement improvements to enhance the resiliency of its services, including its improvements to actively distribute services across both third-party data centers. As a result of these improvements, its network infrastructure is designed to be fully redundant within each of its third-party data centers, including network teaming to provide network redundancy that includes multiple upstream Internet connections. The company has also purchased a private block of IP address space to simplify and expedite its disaster recovery management operations for its digital banking platform customers.
The company’s digital banking platform has had average uptime in excess of 99.9% since January 2013. The company actively monitor its infrastructure 24x7 for any sign of vulnerability, and it seeks to take preemptive action to minimize and prevent downtime. The company’s hosting environments employ advanced measures to enhance integrity and security, from layers of zero-trust network access, design-to-fail architecture, anomaly behavior detection of technical assets, to privileged credential access control. The company also uses strong endpoint hardening and monitoring to mitigate risk posed by the devices used by its globally distributed workforce.
The company’s solutions are designed to enforce that End Users are authenticated, authorized and validated before they are granted access, requiring at a minimum, a valid user ID and associated password. Many of its customers also employ other authentication methods, such as out-of-band, one-time password delivery to log on to its solutions and hardware cryptographic tokens to authorize transactions. The company’s layered security model is designed to allow different groups of End Users to have different levels of access to its solutions. The company’s software development practices require code to be peer-reviewed multiple times before being deployed into production and that its solutions' vulnerability is tested using internal tools prior to release. A Q2 penetration testing team, supported by an independent third party, performs penetration and vulnerability tests on its solutions periodically.
Intellectual Property
As of December 31, 2024, the company had nine patent applications pending and 16 patents issued in the U.S. and other countries, with expiration dates ranging from October 2027 to October 2040. The company licenses third-party technologies, such as bill pay technologies, that are incorporated into some of its solutions.
Competition
With respect to its digital banking platform, the company has several point solution competitors, including Candescent, Alkami Technology, Backbase, Apiture and Lumin Digital in the online, consumer and SMB banking space and Finastra and Bottomline Technologies in the commercial banking space. The company also competes with core processing vendors that provide systems and services, such as Fiserv, Jack Henry and Associates and Fidelity National Information Services, or FIS. With respect to its digital lending and relationship pricing solutions, the company competes against several point system competitors, including Abrigo, Baker Hill Solutions, nCino, Finastra, Brilliance Financial Technology, Temenos AG, and core processing vendors, including FIS and Fiserv. With respect to its Helix solution, the company primarily competes with Galileo Financial Technologies, Marqeta and Green Dot in the BaaS and embedded finance markets, and the company competes with Finxact, a Fiserv company, Nymbus, Mambu and Thought Machine Group in the cloud-core markets.
Government Regulation
The company’s customers and prospects are subject to extensive and complex regulations and oversight by regulatory authorities. These laws and regulations are constantly evolving and affect the conduct of its customers' operations and, as a result, its business. The company’s solutions must enable its customers to comply with applicable requirements such as the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank Act; the Electronic Funds Transfer Act; Mobile Banking Guidance; the Electronic Signatures in Global and National Commerce Act; federal, state and other usury laws; the Gramm-Leach-Bliley Act, or GLBA; the Fair Credit Reporting Act; the Americans with Disabilities Act, or ADA; the EU General Data Protection Regulation, or GDPR; laws against unfair, deceptive, or abusive acts or practices; the Privacy of Consumer Financial Information regulations; the Bank Secrecy Act and the USA PATRIOT Act of 2001; the Guidance on Supervision of Technology Services Providers promulgated by the Federal Financial Institutions Examination Council, or FFIEC; third-party risk management regulations; the NCUA's Guidelines for Safekeeping of Member Information; the Guidance on Outsourcing Technology Services promulgated by the FFIEC; and other federal, state and international laws and regulations.
The company is subject to periodic examination by regulators under the authority of the FFIEC under its Guidance on the Supervision of Technology Services Providers and the Gramm-Leach-Bliley Act of 1999, and federal, state and other laws that apply to technology service providers as a result of the services the company provides to the institutions and entities they regulate.
The Dodd-Frank Act granted the Consumer Financial Protection Bureau, or CFPB, authority to promulgate rules and interpret certain federal consumer financial protection laws, some of which apply to the solutions the company offers.
In the ordinary course of its business, the company and its customers using its solutions access and transmit certain types of data, which subjects it and its customers to certain privacy and information security laws in the United States and internationally, including, for example, GLBA, CCPA, CPRA and GDPR, and other federal, state, and other international data privacy, security, and protection laws and regulations designed to regulate consumer information and mitigate identity theft.
History
The company was founded in 2004. The company was incorporated in 2005 in the state of Delaware under the name CBG Holdings, Inc. and changed its name to Q2 Holdings, Inc. in 2013.
