Former VP at Fidelity National Information Services Inc (FIS)
- Overview of the FIS (NYSE: FIS) MBP (Modern Banking Platform) – strengths, weaknesses, demand trends and more
- Capabilities and benefits to banks and credit unions as a cloud-native solution
- Positioning relative to other core banking systems such as Fiserv’s (NASDAQ: FISV) DNA and smaller emerging cloud-native players
- Outlook as banks accelerate their shift of core systems to the cloud
What broader trends are you noticing in bank technology modernisation? Certainly, there’s a big move from legacy cores and moving to cloud-based cores.
You referenced that throughout the pandemic, there’s been a large shift to digital, and beyond the pandemic, there’s a huge push for banks to offer digital products to their customers to remain competitive and efficient. What increase have you observed for potential customers aiming to move away from the cloud? What is keeping many banking customers from moving to a cloud-based core?
Can you provide an overview of the FIS MBP [Modern Banking Platform] and how it’s different from the legacy FIS core banking offering, beyond just the move to the cloud?
My understanding is MBP was purposely built with the idea that it be cloud-agnostic and code-agnostic. How does that play into that customisation factor? Is that a huge deciding factor for a tech team at a bank when assessing the platform against other options?
Do you feel the open API plug and play into the core with Code Connect limits FIS’s ability to sell ancillary products? For instance, given how open and easy it is to integrate the API, are customers preferring other third-party offerings as opposed to FIS’s?
What demand have you noticed for MBP, especially from large banks? I know the platform was selected by Fifth Third and you mentioned BMO. Is there still much ability for FIS to penetrate top tier 1 banks in the US, or do you feel the company has to begin moving downmarket?
Is there any functionality or gap in the product offering in MBP that customers are concerned with as they go through the decision process or have signed on? Do you think there is anything material missing in the platform that would significantly drive adoption or make it stronger relative to competitors?
Were there key integration challenges that slowed down the ramp-up time for a given MBP user, or before they even sign on? Was the movement away from a legacy system towards MBP at all a limiting factor for the platform’s growth?
How long does it typically take to get a bank customer onboarded with MBP? Certainly, it’s somewhat a function of the bank’s size. How much shorter could optimisation make that ramp-up time?
How do you compare MBP to directly comparable offerings such as Fiserv’s DNA or smaller emerging cloud-native players?
I understand in recent years FIS has lost a bit of market share to Fiserv. What do you think played into that negative impact from Fiserv?
How is FIS competing against Fiserv and emerging cloud-native players? Is it primarily on price or robustness of product, or is there something else that is the big deal-maker for the company?
What’s your longer-term outlook for FIS’s core pricing? This seems to be to FIS and Fiserv’s focus with merchants and payments, and which is allowing them to allow the price floor on the cores to fall a bit.
You mentioned certain customers would try to reduce price by X%, the core is sticky and historically it’s been difficult to switch away from, as well as those ancillary services that plug in. However, everything is now cloud-based and integrated through API, and perhaps customers are not using the FIS ancillary product but using another third party that can easily plug into the core. Does that pricing pressure become more intense because of that ease in swapping out ancillary services? How does the company respond to that? I imagine there’s some sort of bundling advantage it has where it can still compete on price.
How do you assess FIS’s ability to cross- and upsell products on top of the core, and how confident are you that it will be broadly successful in doing so?
FIS’s banking segment, including MBP, grew 8% YoY in Q3 2021. What are your growth expectations from this point and what do you think will be the key drivers of that?
MBP specifically grew approximately 50% YoY in Q3 2021. What is your 1-3-year growth outlook for MBP? Will there be a massive ramp-up in sales and FIS’s go-to-market strategy that will continue that trajectory?
What do you think about FIS’s international opportunities with MBP? What success do you expect from abroad and what will be the biggest challenge? I know there are a few strong cloud-native cores on the other side of the ocean.
How do you think about the longer-term focus and strategy for FIS? In the past couple of years, it seems the company has had a huge focus on becoming merchant-centric and focusing on payments. How might its focus evolve over time? Especially as it relates to the investment allocation, the company recently reduced its leverage, so it’s in a position where it can invest. Do you think it would be more inclined to invest more in the merchant and payments side as opposed to the core side?
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