IBS Journal April 2015
Fundtech: what lies ahead?
Fundtech’s EMEA user conference in London last month saw the company set out its roadmap for the overhaul, integration and rationalisation of its product set. It also talked about the corporate restructuring of the last couple of years and where it might look for future acquisitions.
Fundtech, whether by design or circum- stance, until very recently has been one of the survivors in the payments system space, where others have fallen to consoli- dation. It seems to have been making good progress in the last few years, following its 2011 acquisition by a Chicago-based pri- vate equity company, GTCR. At the end of March 2015, it was announced that Canada based D+H Corporation is to buy Fundtech from GTCR for $1.25 billion. D+H already owns Harland Financial Solutions, a core banking software vendor in the US, and the acquisition of Fundtech is thought to be complementary to the existing product portfolio of D+H. At its EMEA user conference in London
in March, Fundtech presented on its cur- rent product strategy, which will see the gradual move to single flagship solutions in each of its four areas of activity: pay- ments, cash management, financial mes- saging and merchant services. The supplier also set out where it is seeking to integrate these, with Unicredit and Banco do Brasil highlighted as pioneers here. At a corpo- rate level, as part of a considerable restruc- turing that has been underway in the last
couple of years, the supplier was described by president and COO, Edward Ho, as now being ‘acquisition ready’. This could have been misconstrued but turned out to mean that Fundtech is preparing to make acquisi- tions of its own. Across the four product areas, the com-
pany has accumulated a user base of 1200+ financial institutions and claims 30 of the top 50 banks. Its headcount has increased in the last few years, standing at close to 1600, of which 500 or so are in India, 300 in Israel and 380 in the US. Co-founder and CEO, Reuven Ben Menachem, said revenues in the last year had risen by nine per cent to $260 million and profits had risen by 15 per cent. Its payments business, centred on
60 per cent of banking activities end with a payment and banks derive 40 per cent of their revenues from here.
Global Payplus (GPP), remains the compa- ny’s core. It is not a bad place to be, given the focus in many banks on this area of late, in part due to the arrival of non-bank challengers such as Paypal (‘a worry to all of us’, said Menachem), Apple, Google, Pop- money, Payoneer, Earthport, Square et al, and in part due to heightened regulation. As he pointed out, 60 per cent of banking activities end with a payment and banks derive 40 per cent of their revenues from here. In the industry, cross-border transac- tions increased last year by eight per cent by volume and ten per cent by value. Local and regional banks are moving increasingly into the traditional domain of global banks, bringing the need to offer a wider range of products and provide full support for global transaction banking. In the bigger banks, the supplier’s EMEA sales MD, Peter Reynolds, said Fundtech had more than ten ‘payment hub conversations’ at present in Europe, although he pointed out that the first thing to do was always to ask what was meant by ‘payment hub’, as it means differ-
38 © IBS Intelligence 2015
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conference report: fundtech emea
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