Change of ownership – FIS
However, the plans were to come to nothing. The first twist, a month or so after the Temenos partnership, saw M&I, which was the 34th largest bank holding company in the US with $56.5 billion in assets, decide to spin off its banking technology division, Metavante. Metavante would become an independent public company. Private equity firm Warburg Pincus planned to invest $625 million to gain 25 per cent ownership of Metavante. Metavante was valued at approximately $4.25 billion. With M&I shareholder approval, the transaction was expected to close in the fourth quarter of 2007. Metavante expected $1.5 billion in revenues in 2006.
In April 2009, with the US version of TCB still awaited, there
came the news that four US heavyweight suppliers would become three, with FIS buying Metavante. By this stage, existing Metavante core banking system customer, Florida- based Everbank Financial, had signed as a first taker, both for Temenos’ T24 and initial components of the ‘Americanized’ TCB.
The takeover created a colossus in the US payment and financial core processing sector, bringing together 8000
Takers – Bankway and IBS
The aforementioned NobleBank & Trust has Bankway and has added a range of components around this. The A2i tool is for designing, scheduling and delivering reports, with the bank’s IT officer, Jeremy Farr, explaining that probably only around 20 per cent of the data was previously being accessed. The new tool brought much greater transparency and drill-down capabilities. The bank also switched from the traditional Windows front- end to the browser version, for both front-end tellers and back office staff. There have been migrations from Bankway, including to other FIS systems. For instance, Bankway was being used for commercial banking by New York Community Bank ($33 billion), alongside core platforms for Open Solutions and Fiserv. It moved to Miser as it sought to consolidate, within an 18 month project, although among other applications from FIS, the roll-out included the EFT platform derived from Metavante.
IBS still gains deals. For instance, Cole Taylor Bank, a
commercial bank in Chicago with assets of $4.4 billion, selected IBS on an outsource basis in April 2010. The decision came before the expiry of the bank’s contract with its existing processor, Fiserv, at the end of the year. Cole Taylor Bank had been working to diversify from lending into the housing
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customers from the former and 14,000 from the latter. Notably, given the valuation of $4.25 billion at the time of Warburg Pincus taking its stake almost two years earlier, after which there had been a flotation on the New York Stock Exchange, the takeover by FIS valued Metavante at around $2.94 billion. The financial crisis meant a bleak market for the processing companies, and rationalisation and cost savings were a key part of the message from FIS/Metavante, with anticipated cost synergies of $260 million.
Given the competition between FIS and Temenos, the continuation of the partnership was clearly in doubt and the answer was not slow to arrive. Metavante unilaterally terminated the agreement; a resultant legal dispute was subsequently settled, in mid-2009.
Since taking over Metavante, FIS has continued to invest in Bankway. In its first full year in charge, it added teller capture (check image capture) and redesigned deposit origination application, as well as starting to market and integrate complementary FIS applications. A browser front- end to Bankway was in place by this time, with existing user, Anniston, AL-based NobleBank & Trust, a signing for this in 2010, alongside a reporting tool, A2i.
market, and wanted a system to help broaden its product offering and make processing more efficient. ‘Part of our strategy is to have a system that is much more current, flexible and aligned with what we’re trying to achieve,’ said Randy Conte, COO and CFO of the bank. There were a few other IBS wins at this time, in part due to Fiserv bringing to an end its mainframe-based SourceOne offering. In 2011, IBS also gained United Bancshares ($9 billion and 111 branches in five states). More recently, Bremer Bank signed in July 2012 to replace
its 25-year-old Premier system from Fiserv. IBS was chosen ahead of competition from Jack Henry. Bremer Bank also looked at upgraded versions of Fiserv’s offerings, but did not see the solid functionality compared to FIS’s core system. A signing in 2013 was Milwaukee-based Guaranty Bank. The multi-year agreement was intended to see a streamlining of many of the bank’s processes by integrating its third party systems, resulting in improved operational efficiency and cost effectiveness. Privately-owned, Guaranty Bank had 160 offices across Wisconsin, Illinois, Michigan, Minnesota and Georgia. The project included online account opening, bill pay, and text alerts for online, tablet and mobile. New mobile options would allow the bank to extend offers to customers and enable enrollment of new services via the mobile channel, enabling
US Financial Services Technology Market Report |
www.ibsintelligence.com
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