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“breadth and depth” of Finastra. It’s going to be “a lot of intense work” over the next few months bringing the two firms together and interacting with customers on both sides but it’s a challenge Syed relishes.
Third firm from the sun
Throughout the merger’s coverage the term “third-largest” was almost ever-present. Finastra sits behind FIS and Fiserv in the “biggest financial software firm” rankings. When I mention the fact to Syed, he’s poised ready to answer my follow-up question: does that third place really reflect properly on Finastra?
“If you look at it from a footprint perspective FIS and Fiserv are a bit larger than us – there’s no question about that – but their business models are very different from ours. Both of them do a lot of managed services and a lot of hosting. Their technology is based around the outsourcing of banking operations on really old technology.” Finastra, adds Syed, has the well-established FusionFabric architecture from legacy Misys paired with the unique offerings that D+H brings to the table. “D+H is a pioneer in building cloud-ready solutions which are designed to operate in a next-generation model on the cloud. That’s the level of expertise we have brought into the company.”
Syed believes that in terms of technology sophistication and in investments made into R&D, Finastra is well ahead of the competition. “If you look at the product portfolio we have [you can see that] these guys don’t have the same breadth and depth.”
Syed reckons that Finastra has its competition beat when it comes to geography, too. “If you look at Fiserv, 94-96% of its business comes from North America and the remaining 4-6% from the rest of the world. From a geographic perspective they’re not there and from a product footprint standpoint they’re not there.” FIS, admits Syed, has expanded its portfolio through the SunGard acquisition but also doesn’t have the same level of product depth as Finastra. FIS still isn’t done with all its mergers, running some as independent subsidiaries. Comparatively, Finastra is raring to go having completed its merger quickly.
“We firmly believe that our value proposition is creating a unified, modular platform for our customers so that they can deploy whatever they want,” says Syed. Although it might take some time to integrate and align the legacy D+H solutions into the product portfolio the organisational alignment has already occurred. “We’ve unified the entire product organisation, everything is under one roof.” Finastra has already started working on what Syed calls the “1+1=3 paradigm”: the creation of “tremendous value” via the tying together of disparate systems. “With some of the changes we’re seeing across the industry – PSD2, GDPR etc – there’s a need for a seamless banking experience that our customers’ customers are demanding.” Syed says he doesn’t see FIS and Fiserv heading in that direction at the moment. “I think we have a leg-up over them. We’ll continually invest and not settle with the third position.”
Finastra offers a modular platform so customers can deploy what they need
The Finastra identity
As Finastra moves forward it’s “crucial” that the original identity of its two merged companies is removed: “We are one Finastra and we have one unified culture.” It’s the reason the firm chose to go with a new name: it wanted workers to feel united in a single company, not feel like a D+H person at Misys or vice-versa.
The Finastra product strategy has three pillars: protect, extend, innovate. “The message to our customers is that no matter what platform that you use, you can rest assured that the platforms will be protected and supported.” Another commitment Finastra is making to its clients is that – where it makes sense – platforms will be integrated more closely. This will create more “end-to-end capability”. Syed highlights Cash Management, a former Fundtech system, as an example. “It’s one of the best platforms in the industry,” he says. “Customers typically look at corporate banking as a holistic system. They’re looking for trade, cash and supply- chain finance.” Misys had two of the three nailed down, while Fundtech covers the third. In that example, the two systems would be stitched together to create a platform that covered all angles.
Cross-sell is very important to the firm, too. “Historically in this industry, customers used to either build their own solutions or buy them from a vendor. As the complexity of the environment increases, banks are recognising that they can’t look at emerging
www.ibsintelligence.com | © IBS Intelligence 2017
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