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Management Strategies

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S1, Fundtech CEOs See Transaction Banking Strength in Merger

The heads of the two vendors see a combined portfolio across retail and commercial transaction banking products as key advantage in merger.

As financial technology vendors Fundtech and S1 begin the process behind their announced merger, the companies' CEOs look at payments -- namely transaction banking -- as a focal point for the combined company.

"We believe we're creating a company that is very focused, and will become a leading player in the transaction payments space in the industry," says Johann Dreyer, CEO, S1, who will become CEO of the combined company following the merger.

Dreyer and Fundtech CEO Reuven Ben-Menachem see both S1 and Fundtech's product portfolio as being complementary, with overlap in cash management. In terms of transaction banking, which includes trading, cash management and payments, they see the new company -- which will maintain the Fundtech name -- as being an industry leader.

"What we have seen in the market is that the investment in transaction systems -- like payment hubs and cash management -- has gone up, and we will benefit from it," Ben-Menachem adds.

While Fundtech specialized in business transactions and financial supply chain, Ben-Menachem adds, S1's portfolio will complement on the retail side, with credit card payments, ATM services and online banking.

"Put our two product portfolios together, that combination will increase our overall footprint," he says.

In terms of overlap, within the cash management space, Dreyer says the company will immediately benefit by an increase in revenue, but will look at how it can revolutionize the product going forward.

"The way that we anticipate this is that we’ll use the best assets of both companies to determine what is the best version of our next cash management product," he adds. "We view it as an upgrade path for our customers."

S1 and Fundtech have the next four months to close the merger, which shareholders of both companies must approve.

"In the time that we have between now and then, we will start to work on the merger plan in detail," Ben-Menachem says. "And we will address some of the questions regarding product roadmaps and the different setups in the different geographies."

The CEOs expect to adjust the structure of the company, and work with its salesforce to build competency in cross-selling across the different technologies. The process will continue through the rest of this year.

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