Consolidation of Bank Tech Companies Was Pretty Much a Non Event in 2008

Let the stats speak to you. For the past 16 years, vendor consolidation was the place to be if you enjoyed the dynamics of "Who do you work for today?" The leader was Fiserv with 152 acquisitions. The average during that period among all bank tech companies in Automation in Banking, was 23 per year. Last year there were nine. One year was even lower than that with seven.I wondered what it was about 1996 that caused the slow-down. Before it and after, the numbers were 23 and 28. So I looked it up in Automation in Banking - 1997. If you were there, you might remember the names.

• Fiserv acquired Unifi and Bankers Pension Services. George Dalton must have been on sabbatical that year. • M&I Data Services (now Metavante, soon FIS) acquired Eastpoint Technology from a real estate developer, but later "sold" it to a group consisting of Eastpoint's customers. Later, Open Solutions Inc. "bought" it and then sunsetted (a euphemism for "dumped") the product. • GEAC acquired D&B software, which was previously known as MSA Software, the company that John Imlay founded and gave new respect to the idea of packaged software. I'm willing to bet that some of today's top 50 banks are still using the MSA General Ledger system even though they think it is their own homegrown system. • Computer Associates International acquired Bennett Management Services. CAI then got out of the bank tech business by selling its stuff to EDS and Newtrend. Infopoint, an old mainframe-based core product, eventually landed at TriSyn Group until last year when it dropped out of AiB08. I believe there are still ghosts of Infopoint in some banks that run an in-house IBM mainframe operation. • MISER resided temporarily at three "foster homes" before finding a permanent place as an FIS solution. • Peerless Group, Inc. (later acquired by Jack Henry & Associates) acquired C.T. Office Systems. I don't know what C.T. Office Systems was all about, but I'll bet dollars to donuts that it's not one of 46 Jack Henry tech solutions now appearing in AiB09. • Bell & Howell acquired Protocorp International, an imaging company.

Nine transactions in 2008 is not only low, but in terms of participants, it resembles 1996. Only Fiserv and Metavante made acquisitions in 2008, two each. And if you blinked during the nightly business news, you would have missed them. I wish I could tell you a good reason for the low activity in 1996. I know it wasn't a recession because I lived through 12 of those suckers in my lifetime and everything was buzzing in 1996.

In 2009, there may be only one acquisition on the list, FIS/MV, but it was a whopper. There are still some cash-rich companies that are sniffing around and gearing up for the recovery days. Those companies are not in AiB09.