Although core systems transformation projects don't have quite the "buzz" that surrounded them several years ago, the reality is that very little banks hope to accomplish in terms of omnichannel delivery, customer engagement and driving growth can happen without a modern core platform. So it makes sense that the 2013 acquisition of Open Solutions by Fiserv has created opportunities for both entities.
For Fiserv, the acquisition of Open Solutions and its DNA account processing platform "has filled a void in our service offering to grow market share around real-time capabilities, particularly for the in-house delivery model," says Teri Carstensen, president of bank solutions for Fiserv. "We've got five really strong bank platforms we go to market with. We work collectively to figure out what is the right solution for the client, based on a number of factors, including business model, delivery model, propensity to be retail or commercial focused, experiences with different platforms."
For Open Solutions, the deal has provided financial strength, expanded resources, credibility and autonomy. "Prior to the acquisition, we were challenged in the market," acknowledges Steve Cameron, president of Fiserv's Open Solutions division. "There was a challenge selling DNA because prospects and clients didn't know what was going to happen." Not only has Fiserv kept the Open Solutions sales and operations teams pretty much intact, Cameron says, it has invested in the DNA solution.
Furthermore, "We were pleasantly surprised by the power and value of the surround content at Fiserv" -- assets related to card services, mobile and digital channels that are being integrated into DNA, Cameron says. "Open Solutions was more of a product company, while Fiserv is more solution-focused. Prior to the acquisition, we had a lot of alliance partners but we didn't actually own the products. Now we do, and that's been a great uplift. Our average deal size is larger being part of the Fiserv family."
There were almost immediate benefits. Compared to only one new logo sold in 2012, 31 were sold in 2013 -- a total that by mid-April 2014 had risen to 38. 2014 began with a bang with what Cameron calls a "landmark deal" -- the February announcement that Seattle-based Washington Federal had selected DNA and a number of complementary Fiserv solutions (including Corillian Online, Mobiliti, ChecFree RXP bill payment and Popmoney personal payment) to replace its home-grown core system and support its growth strategies via increased efficiency and an enhanced customer experience. Additionally, Washington Federal will implement TransferNow for account0-to-account transfers, Prologue for financial accounting, tMagic for DNA integrated teller capture and solutions for financial crime and risk management.
The Washington Federal implementation is on-schedule. Since the initiative kicked off on March 17, each of the individual project tracks has been launched.
In addition to the appeal of integrated solutions and real-time transaction processing, Fiserv's conversations with its clients and prospects are centered around three considerations, according to Carstensen. "First is growth," she says. "Every financial institution is focused on growing their revenue. Depending on their business model, they have different ways of doing this. It could be through growth of the retail aspect, while some are focused on commercial capabilities, attracting small and medium-size business customers. But every conversation with every client focusses on their ability to grow."
Second is efficiency – "being able to improve their margins and become more efficient," Carstensen says. "Technology if used the right way can drive efficiencies in the bank." The third concern involves "regulatory change, managing risk, business continuity, and the fundamentals we're all faced with."
It's all about "ways to get greater reach to their clients, making it easier to bank with them, and attracting different demographics," Carstensen says. An additional priority, she adds, "is the whole real-time capability, whether real-time payments and money movement or real-time access, how to deliver solutions to clients, and changes in consumer behavior."
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio