International strategy


There have been significant corporate and product level changes over the last few years at Fiserv. The corporate changes have largely been to do with turning the company into a truly international force. Over the years there had been talk within Fiserv about offering a much wider range of solutions and services outside the US but this had not been backed up with much action. This has changed, partly due to changes at the top. Leslie Muma retired as president and CEO in 2005 and was replaced in November by Jeffrey Yabuki, who moved over from H&R Block Inc. where he had been COO since 2002. Muma, who agreed to remain with Fiserv in a consulting capacity until June 2006, had presided over the establishment of a huge US business which constituted a major base from which to grow elsewhere. The average growth in the company’s stock price had been 21 per cent per annum; the average annual net income growth had been 27 per cent; annual revenue growth had been 24 per cent. All of the next five to ten years would be to do with international growth, said Hamilton in early 2006. By this stage, the first signs that Fiserv meant business were


visible. It had set up Fiserv Global Services (FGS) to accelerate the internationalisation of its operations and recruited Dr Arun Maheshwari as president. He was formerly CEO of CSC India. In January, the company officially launched an Indian subsidiary, Fiserv India, to operate out of a 100,000 square foot leased facility in Noida backed up by an initial investment of around $8 million. Over the next few months, the company recruited 1000 staff for this operation. The facility was meant to initially act as an offshore BPO and IT services centre for its parent. It would also market Fiserv’s products in the Indian market and was reported to be looking for acquisitions in the country. Hamilton described it as international ‘investment number one’.


International investment number two came in April 2007, when Fiserv acquired Netherlands-based NetEconomy. NetEconomy had over 130 implementations of its modular Erase Financial Crime Suite, across 58 countries. The suite covers compliance, market surveillance, fraud prevention and employee fraud. The suite was to be integrated into ICBS. Two major announcements also followed the NetEconomy acquisition. Firstly, Fiserv stated that it was to offer a full end- to-end Islamic banking solution based on ICBS and Aperio. The ASP or licensed offering was being designed in partnership with Malaysian treasury management system vendor, Meridian Diversified. The partnership brought in a number of Islamic scholars to help it meet guidelines. ICBS would undergo ‘a little bit of tweaking’ to ensure Shari’ah compliance. Secondly, the vendor bought US payments firm, Checkfree, for about $4.4 billion. The deal gave Checkfree shareholders $48 a share, a 30 per cent premium on the share price at the close of play on the day of the announcement. Completion saw Fiserv take on Checkfree’s electronic systems for online bill paying. The vendor claimed its systems processed more than one billion transactions a year.


Fiserv also invested in Latin America in 2006, expanding


its offshore development operations in both Costa Rica and Colombia, and it planned to expand its Costa Rican enterprise still further by 2009. For the ICBS business, the aim was to offer a much wider


range of products and services and to become less dependent on Initial Licence Fees. Outsourcing and managed services were meant to be a key thrust. It already had a few users with this type of set up, including Cahoot and ICICI Bank. The latter’s operations in the UK, US and Canada are run out of Fiserv’s Chicago data centre. In 2005, Fiserv signed an outsourcing deal for cheque processing for Commonwealth Bank of Australia, National Australia Bank and Westpac in Australia. In late January 2006 it was also claiming a major outsource win with ICBS at a UK retail banking institution. By this stage, the US CBS business apparently had around 85 per cent of its revenues confirmed at the start of each year (reflecting its heavy bureau nature); Hamilton put the ICBS equivalent at 65 per cent, which marked a considerable increase from a few years earlier. The aim, he said, was to shift Fiserv from ICBS to being more like IBM or EDS in terms of its breadth of services. On the product front, a key offering is now Aperio. This


is the front-end multi-channel sales and service platform built on top of the Portrait Foundation application platform suite from Portrait Software (AIT Group, as was, and now part of Pitney Bowes). It provides a single customer view across all systems and channels, intelligent prompts, workflow, rules engine and BPM. It is intended to support rapid response to customer enquiries, accurate targeting of sales campaigns, efficient application processing, and consistent follow-up. It is integrated with ICBS, CBS, and other Fiserv applications (it has been applied to Fiserv’s SourceOne outsource solution in the US although this product is now to be sunsetted by the vendor), and can be linked to third party systems or be used stand-alone. It is based on .Net and XML, with banking specific messages and processes (e.g. change of address or opening a loan account) available out of the box or built and copied using its process modeller. It can link to the likes of Tibco, MQSeries and Websphere. The CBS Communicator layer provides the channel integration (implemented at over 60 banks worldwide). An equivalent product would probably be Fidelity’s Touchpoint. With this emphasis on the Aperio and Communicator front and middle layer, it is no surprise that Fiserv has been talking Service Oriented Architecture (SOA), with this approach now supposedly implemented at Principal Bank in the US, with this CBS user running CBS Communicator as an integration layer. By the end of 2005 there were more than 35 users of Aperio


or its previous iteration, Alliant CRS. Countrywide Bank took it during 2005 to replace Siebel. It was part of the solution for ICICI Bank as well as for the UK outsource contract of early 2006. Other users were Higher One and Principal Bank.


Universal Banking Systems Market Report | www.ibsintelligence.com 141


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