Meet the Top 10 from the 2012 FinTech 100
HQ location: Jacksonville, Fla.
Frank Martire, Chairman and CEO
Frank R. Martire learned one of the most important lessons of his career in the 1970s, when he was in his 20s, working at Connecticut National Bank.
The chairman and chief executive of Fidelity National Information Services was then fresh out of Sacred Heart University of Fairfield, Conn., and exhausted after working all night on a project that he just couldn't complete.
The goal of the project wasn't important, but what he was about to hear from his boss was.
"I said: 'I did everything I could. I did the best I could and we just didn't get the project done,'" Martire recalls. "But he [answered]: 'Mr. Martire don't ever confuse [effort] for results.'"
That is now one of the guiding principles of FIS' business, which includes core processing among a broad suite of financial technology products.
"It's something that stuck with me throughout my whole career. I want to get results," Martire says. "The attitude of my employees to our clients is a reflection of me personally. Either we do it well or we don't do it."
It's a strategy that has served him well.
This year, FIS is number one in the FinTech 100, having racked up $5.7 billion in revenue in 2011, 87 percent of it from the financial services industry.
But FIS's business is constantly changing. On the horizon are managed services that the company plans to offer to banks. Those bank clients are having to compete with a host of potential disruptive competitors including financial technology start-ups and expanding prepaid card companies.
"As we speak, the industry is going to have to get more efficient in the delivery of products and services," says Gary Norcross, FIS's president and chief operating officer. "With the increased burdens around risk, around fraud, around emerging competitors."
That will inevitably cause banks to outsource some of their systems. Norcross projects that by 2015, most banks, if not all of them, will be doing some sort of back office processing in the cloud.
Banks "are going to have to turn themselves more into marketing engines," Norcross says. "They are going to have to compete and drive, but because of these non-financial institution competitors, they'll have to really come into the market in a meaningful way," he says. "They are going to have to change the way that they do sales.... And financial institutions, unless they are in the top 50 in the world, they are not going to be able to completely manage their back office."
Martire says everyone at FIS is on-board for the change that's on the way.
Employees in departments ranging from sales to IT are on call to handle the needs of FIS's customers. That's why FIS only recruits from within the financial services industry. Martire pledges individually, and to every one of FIS' customers that anyone that leaves a message will get a call back in less than 24 hours, even if that call back is from him.
"What I can't guarantee to you is that we will never make a mistake," says Martire, who speaks in a hushed but stern tone. "But what I can tell you is I have zero tolerance for non-responsiveness."
By Sean Sposito
HQ location: Mumbai, India
N. Ganapathy Subramaniam, president, TCS Financial Solutions
Fresh off of a couple of big partnership deals, Tata Consultancy Services is wielding an expansion strategy that covers growth in new mobility and old school geography.
"We have to find new ways to grow," says N. Ganapathy Subramaniam. "[Banks] are saying, 'Can I have a clean balance sheet?' That's what they are looking at from a balance perspective, but they are also looking at regulatory issues, financial crime and mobility."
In July, the firm partnered with Century Link and Savvis to allow the TCS BaNCS suite to be offered on a cloud-enabled hosted environment in North America. The platform includes core banking, payments and anti-money laundering technology, as well as corporate actions and insurance. Savvis's IT infrastructure options include colocatoin, managed hosting and cloud delivery. TCS BaNCS includes a group of pre-configured customizable banking products such as core banking, payments, compliance, and treasury management.
Subramaniam sees a trend among financial institutions toward expanded use of managed service offerings as a way to free themselves from IT and application management chores and respond to developments in payments and mobility. "On the customer side, how can I improve the customer experience on things like iPhones, Pads, etc?" Subramaniam says.
TCS in April entered into a partnership with Mozido to expand that firm's enterprise cloud payment network. Mozido's mobile wallet platform will be integrated with TCS's mobile point-of-sale system and TCS Rewardz, a customer loyalty program. The mobile wallet technology will enable bill payment, remittances, mobile top-up and payroll deposit, as well as marketing, redemption and targeted analytics based on real-time transaction behavior. The partnership also includes the Mozido Mobile Vault, a real-time digital payment processing platform that's designed to improve cash handling. "Payments is one area where everyone wants to take a shot," says Subramaniam.
TCS seeks to compete with firms such as Infosys in a challenging economic environment for outsourcers. In its most recent financial statement, TCS said revenues grew 13.1 percent to about $2.72 billion, while net income increased 1.36 percent to about $604 million. The firm reported strong performance in banking and financial services, especially in U.S. and European markets. However, the firm also said foreign exchange volatility posed risks going forward.
Subramaniam says that as a leader of a large team of programmers and other technologists, it's vital to be transparent when linking discussions of economic performance to corporate strategy. "I think people understand the economic situation, and they are comfortable if, as a leader, you can look in their eyes and tell them what you plan to do," he says.
He also says the tech talent pool is changing, and that requires a management strategy that puts a premium on teaching multiple tech skills and providing a variety of tasks for staff.
"When I first joined the firm [more than 20 years ago], I grew up in a programming culture where you looked at one thing. Young people today are more comfortable with multi-tasking. If you give them only one thing they will get bored."
By John Adams
HQ location: Brookfield, Wis.
Jeff Yabuki, CEO
The development of new mobile banking and payment products remains Fiserv's top priority, as it was last year.
"The financial institution market is, as we all know, fairly challenged right now," Yabuki says. "We're putting a lot of focus on those products and services we can develop and deliver that help financial institutions generate more revenue, increase their efficiency, and build more loyalty within their customer base. Mobile is one of the ways we can do that; it's becoming an important part of creating loyalty and relationships while increasing efficiency by better extending the self-service channel."
Person-to-person payments are in "the first inning of what will be ultimately be a nine-inning game," Yabuki says. "P2P is an intriguing opportunity because it's the intersection of potentially the last bastion of check and cash payments the roughly $11 billion in payments a year that are transacted among consumers, largely in check and cash."
In the fourth quarter of this year, Fiserv will introduce real-time person to person payments, the ability for people to move money to another individual's bank account immediately. "That is necessary to truly be able to take the place of check and cash," Yabuki says. "We believe that will provide some revenue opportunities for financial institutions."
The payments will ride on existing debit networks, including Fiserv's own Accel/Exchange, which supports 40 million cards. Point-of-sale transactions will occur as real-time memo debits and credits.
Today, it's not that easy to conduct complex transactions on a mobile phone because of all the typing on tiny keys required, he points out. "But to the extent you can auto-fill information and find other ways to allow people to more easily transact, there's almost no limit on what people can do," Yabuki says. Geolocation and the ability to combine different streams of information on a mobile device will provide new ways to bank from a mobile device, he believes. He expects Fiserv to roll out new products along these lines over the next six to eighteen months.
Such added convenience and capability calls for more security, he concedes. "I do think it raises the stakes on security and authentication, making sure that as you think about new transactional capabilities, security stays at top of mind and is integrated at the applications," he says. "If people don't feel secure, that changes the trajectory of usage pretty quickly. I think the industry is doing a good job of that and I've seen new authentication methodologies that are pretty exciting."
Another area Fiserv has been working on is integrating account aggregation with personal financial management. The company purchased CashEdge last year, which has an aggregation service called AllData.
How does Yabuki inspire, encourage, promote and execute good ideas?
"Isn't that the question of the day?" he says. Fiserv has increased R&D spending over the last several years, he says. "One of our five values is 'create with purpose' what can we do to help solve everyday problems for our clients and their customers?
"It's also important, at least for me, to have our people understand they're part of something much larger than what they do," he says. "When someone is working on core banking or mobile or debit or ACH or risk, that's really important. But to the extent that it comes together and creates a unique experience for clients, that's where the win is.
"Having 20,000 people understand that they're part of something big and unique and is really changing the face of financial services, that kind of energy does a lot to make people be their very best and to take some risks and do everything they can to make their clients successful."
By Penny Crosman
HQ location: Wayne, Pa.
David Hamilton, president, banks
What does it take to be a great tech boss?
"Patience," says David Hamilton, president of SunGard's banks business. To encourage and promote good ideas, Hamilton does something he calls "picking a fight" not with a specific competitor or person, but with a market situation or problem. "If we can identify those challenges, that helps focus people's minds," he says. "Once you have people's minds focused, it's easy to fuel and encourage thinking and innovation."
He also talks to his team about providing software that has opinions. "Our customers don't want us to explain to them six ways they could solve their problem," he says. An example is a platform for mobile phone, tablet, and online applications that SunGard launched late last year called Ambit MyMoney, primarily in Asia and the Middle East. "In Asia, the lines between a person's personal financials and business interests are blurry," Hamilton says. "We wanted to enable our customers and their small businesses to have a more flexible engagement model with their bank."
The U.S. is a tricky market for SunGard lately. "A lot of institutions in the U.S. in our target market the $3 billion to $40 billion-asset banks are relying heavily on core banking providers for mobile and online channel access," Hamilton says.
U.S. and European clients have been cautious, due to budget issues and regulatory uncertainty.
Yet in the last six months, SunGard has launched a new software product for commercial credit lifecycle management.
Earlier this year, SunGard launched Ambit Concierge, an iPad app that customer service staff can use in the lobby of a branch to handle customers' financial and non-financial requests. "Somebody with an iPad could walk up to a teller queue and satisfy a customer who simply wants to transfer money from one account to another," Hamilton says. "We see a lot of those sorts of queue busting techniques in the branch lobby right now."
This fall, SunGard will announce Ambit Wealth Strategist, another iPad app that enables private banking and relationship managers to become more mobile.
To retain IT talent, SunGard lets people move around between projects. "Whilst they may be working on a tedious back office system, we want them to know that once that project is behind them, they can immediately move to an HTML5 project for mobile devices," Hamilton says. "I've put some HMTL5 developers on our, let's call them nostalgic transaction systems. At first they grimace, shrug their shoulders and say why me? But they come out of it having learned a great deal about what it takes to build a resilient, scalable product."
By Penny Crosman
HQ location: Duluth, Ga.
Michael O'Laughlin, senior vice president of financial services
Pass Michael O'Laughlin's office at NCR headquarters, outside of Atlanta, and you might mistake it for a conference room. A large, round table surrounded by six comfortable chairs, and a speaker phone is there instead of the oak desk you'd expect.
There are no family photos. No ferns. None of the accoutrements you'd find familiar in any bosses' workspace.
"We are all sitting around this table," says O'Laughlin, NCR's senior vice president of financial services. "It's a meeting place for open ideas."
Out of those meetings have come some of NCR's biggest thoughts around bank branch consolidation.
They include mobile cash withdrawal, which allows an ATM user to take out cash from an automated teller machine without a card and PIN number. The technology relies on smartphones to relay pre-staged transactions.
They also include video ATMs; NCR's Aptra Interactive Teller is designed to extend bank branch hours by allowing a teller to talk face-to-face with a user at the ATM through a camera and a screen.
Earlier this year, NCR bought an undisclosed minority stake in uGenius Technology, the company the ATM maker collaborated with to launch this special device that features a built-in camera. Tellers can also remotely control these video-equipped ATMs.
In August, FirstOntario Credit Union, based in Hamilton, became the first Canadian financial institution to deploy the NCR Aptra Interactive Teller, to let members bank after hours.
This is the work O'Laughlin is most excited about.
"Interactive teller [is part of that], a kind of a first step in that direction, and mobile deposit withdrawal," he says. "You are going to see some other things in the near term that I'm very passionate about."
Indeed, he's seldom at home.
In late August, O'Laughlin took a five-day tour of India where he met with NCR sales employees, and politicians, in Mumbai. He also visited several other Southeast Asian cities.
In September, NCR acquired Transoft International of Cary, N.C. in an effort to bolster its cash management software services. NCR will integrate Transoft's product suite and employees into its financial services line of business. NCR believes the cash management segment is worth about $1 billion, industry-wide.
Also in September, NCR and VendorNet completed the integration of the VendorNet StoreNet In-Store Pickup fulfillment technology with NCR Advanced Store point-of-sale software. This accommodates online-only retailers that want to provide "locker" type pick-up locations to serve the growing number of shoppers for whom work or home delivery is impossible or inconvenient. One driver of this type of service is the fact that companies are increasingly implementing policies against employees receiving non-work-related packages at work, eliminating for many online shoppers the main avenue for ensuring quick and secure delivery of online purchases.
Back in Atlanta, O'Laughlin struggles to talk about himself. He's not that kind of guy. He's the type of boss that would rather talk about his employees' accomplishments.
That's just how he likes to lead.
"It's [more] about processes, people, and then technology," O'Laughlin says. "How it all comes together."
By Sean Sposito
HQ location: North Canton, Ohio
Thomas W. Swidarski, president and CEO
Thomas W. Swidarski knew he had to change his ATM game soon after he was named the chief executive and president of Diebold in 2005.
The pace of technology was quickening. Financial technology start-ups were just beginning to pop up. The potential to disintermediate was there. And he knew, deep inside, that what his company had to concentrate on next was what it knew best.
And that is, "every aspect of what happens in an ATM network, whether it's a Diebold unit, or not... Whether we do the software or someone else does it," he says. "We understand the whole ecosystem."
That realization led him to one conclusion: Why not just handle a bank's ATMs for it?
Roughly a year after becoming Diebold's captain, he took one of his head salesmen off of some of the company's largest accounts and started hunkering down and talking to customers.
Indeed, by 2009, the company had signed $75 million worth of contracts with its managed services business, doing all the back office processes and monitoring a bank needs to do to manage its ATMs.
A year later, Diebold inked roughly $150 million worth of those deals, and last year it grew this business to about $600 million.
Earlier this year, Toronto-Dominion Bank handed over the reins of its roughly 4,400 ATMs to Diebold. The company is monitoring those ATMs remotely with its OpteView Resolve software as well as tending to those devices on the ground with its employees.
And just last month, the North Canton, Ohio company announced that it was opening up two new data centers located in Richardson, Texas and Manassas, Va. Previously, the company was handling its managed services out of three data hotels near its headquarters.
Some of the first Diebold customers placed in those new data centers one of which is located directly on Verizon's fiber optic network in the Lone Star State went live in September.
Also in September, Diebold acquired Gas Tecnologia, a Brazilian internet banking, online payment and mobile banking security company that protects nearly 70% of the country's internet banking transactions. Diebold hopes to expand its Brazilian footprint.
Today, especially in the U.S. market, Swidarski says, it's all about ATMs.
"But, in the future you can be doing things on handheld devices, or tables," he says. "I want to be able to participate in that, and help the company thrive as the world changes."
Focusing on this aspect of financial services will give Diebold a future, Swidarski says.
"Making sure we aren't so blinded by something that we call an ATM that we miss the forest for the trees," he says. This is "the biggest step for me."
By Sean Sposito
HQ location: Atlanta
Mark Herrington, executive vice president of global product management and innovation
From his perch at the center of the fiercely competitive payments game, First Data's Mark Herrington can't help but be amazed at other leaders who exert a sense of calm amid a storm of combatants.
"Mike Krzyzewski [Duke's basketball coach] seems to be a tremendous game planner, and has a very calm way about him. He also comes across as a humble guy, and that's an important part of leadership," says Herrington, executive vice president of global product management and innovation for First Data.
Herrington's the "Coach K" for a team of 1,000 people who produce new digital payments tech for First Data. "For the next two to three years you will see a slugfest with a lot of value added products," he says, adding that "at some point we will need to see an environment where these services can be consumed in a ubiquitous fashion."
First Data, which processes payments for more than six million merchants and thousands of credit card issuers, believes it's uniquely positioned to take advantage of the coming payments revolution, as wallets, cash and credit cards morph into a mobile-phone enabled portal for shopping and payments. The Atlanta-based firm is already providing the processing rails for the Google Wallet, and is turning its attention toward developing additional mobile and web-friendly digital payment products for merchants and consumers.
"We're seeing consumers empowered in a way that they haven't been in the past. They have so much access to so much information where they can quickly find a merchant that they want," Herrington says.
The slew of new payments tech development comes partly under the umbrella of First Data's Universal Commerce strategy, under which the company produces tech tools for digital payments, integrates disparate applications, provides intelligence for shopping and deals, connects stakeholders, and enables computing devices to execute fast and compliant payments. Mobile delivery is the hub of the model.
A number of new products have spun off of Universal Commerce, including the FD35 PIN Pad, which allows PIN-based debit transactions and swipes traditional payment cards, but also can accept chip and PIN (EMV), contactless cards, mobile payments and key fobs.
Snap! is an iPad app for generating paperwork and collecting electronic signatures so merchants can begin accepting payments quickly. Otherwise is an open platform that lets marketers and other publishers electronically attach offers such as deals, e-coupons and loyalty programs to a consumer's cards or mobile wallets.
The company has also rolled out RapidComply, a self-assessment questionnaire and vulnerability scanning tool that helps merchants maintain Payment Card Industry Data Security Standard compliance. And it's launched Global Gateway e4, an online payment service.
"We have a good share of the merchant community and are putting in place tech to allow any combination of form factors at the point of sale," Herrington says.
"We're operating with a sense of urgency. If you're going to fail, fail fast," Herrington says.
By John Adams
HQ location: Teaneck, N.J.
Francisco D'Souza, president and CEO
Outsourcing firm Cognizant has been growing fast and makes its debut in the FinTech Top 10 this year.
"When we started the business 19 years ago, we saw a very large market opportunity ahead of us and made a conscious and deliberate effort to capture it," says Francisco D'Souza, president and CEO. "We've orchestrated and engineered growth into the business strategy of the company from day one. We created a financial model that lets us reinvest back into the business for long-term growth to make sure the products and services we offer our clients stay ahead of where our customers are and where the market is."
While some outsourcers see a movement of U.S. banks' work from overseas to the States, D'Souza does not.
"Our clients are always looking at the equation of, where in the world does the right combination of cost, capability, and talent exist to do a piece of work," he says. "In the IT portion of our business, the reality is there isn't enough talent in the U.S. and Western Europe to meet our clients' demands. The talent production in the U.S., if you look at the number of college graduates and so on, is not keeping up. Clients who want to remain competitive in the global market need to tap talent around the world." Cognizant has delivery centers in the U.S., Europe, Asia, and South America. "Our goal is to find the best talent in the world and bring that talent to bear on a particular problem," he says.
India and China have the largest tech talent pools, he notes. "We see eastern Europe being strong in pure computing statistics and mathematics. We have centers in South America that bring that time zone and the Spanish language to the table." On the business process outsourcing side, the Philippines is a significant contender, he says.
Cognizant's road map for the next 18 months is focused on the "smac stack" social, mobile, analytics and cloud. "We think there's still a lot that can be done to maximize the impact of these technologies," D'Souza says.
How does he see new ideas through? "The challenge we faced was how to identify, incubate and protect new ideas that have great potential but take time to come to fruition and contribute meaningfully to revenue," D'Souza says. "We encourage employees not just to give us ideas but to form teams to execute these ideas. The emerging technologies organization reports directly to me so I can give it the air cover it needs to grow and operate with autonomy and independence, which is needed to shepherd new good ideas."
By Penny Crosman
HQ location: Tokyo
Shin Kusunoki, senior vice president and division manager for financial and asset management solutions
For Nomura Research Institute, attracting and retaining top tech talent is a matter of giving them something they can sink their teeth into.
"We motivate technologists by assigning more and more challenging projects," says Shin Kusunoki, a senior vice president and division manager for financial and asset management solutions in NRI's financial technology solutions division.
NRI, which gets about 60 percent of its revenue from financial IT solutions, including banks, asset managers, broker-dealers and insurance providers, has a number of new projects underway to serve a customer base that includes Credit Suisse, Barclays, HSBC, UBS, JPMorgan Chase, Nomura, ING and Mizuho. NRI's solutions support about 80 percent of the Japanese mutual fund market and are used by about 70 percent of the participants in the Japanese capital markets system.
Two of NRI's largest current initiatives involve expanding its Japanese base to include more smaller bank clients, and growing NRI's presence in India.
NRI recently finished work on a new hosted online banking system that will be aimed at Japan's 106 regional banks. In addition to internally hosting online banking within NRI's own data center, the new online banking service will also come with customized advertising and marketing campaigns.
Outside of Japan, the firm established NRI FT India in Kolkata following the completion of its acquisition of Anshin Software. The new unit will offer customer support, IT services, financial services R&D and software development, and includes about 200 new system engineers. Kusunoki also says NRI's current priority is to assist Japanese financial firms to expand their businesses outside of Japan, but is also seeking partners for a U.S. expansion.
NRI is working on new developments in mobile channels and researching how to leverage Oracle Exadata for a multitenant platform as a service model. Oracle Exadata is a package of servers, storage, networking and software that is designed to consolidate tech systems, provide data warehousing and online transaction processing.
The execution of these initiatives is reliant on finding IT people with knowledge of these new technologies and keeping them happy. Kusunoki says that in Japan, most people work for one company in their careers.
NRI recruits heavily from local universities in Japan, China and India, and provides chances for staff to transfer to other jobs, as well as collaborate on new ideas for products, tech or strategy.
As the firm expands further outside of Japan, Kusunoki has to work harder to encourage the cross-job skill sharing that it offers developers. It has an annual off-site event in which tech staff from the firm's different divisions share ideas and experiences.
By John Adams
HQ location: Bangalore
Mahesh Makhija, vice president
As Infosys plots its expansion strategy following the tech spending slumps of the past few years and stiff competition from firms such as Tata Consulting Services, it's offering expanded outsourcing options. These new services range from social media to the cloud to expanded back office functions such as human resources.
But more than that, Infosys is attempting to compete in a new era for outsourcing, in which jobbing out specific functions for scale and cost cutting gives way to a mix of tech hosting, assessments, advisory services and management.
"Outsourcing is no longer about transaction processing, but a bank's leveraging a global workforce for a tech strategy," says Mahesh Makhija, vice president and head of the financial services and insurance practices for the Americas for Infosys.
Infosys is hoping its expanded advisory, management and hosting options will help the outsourcing firm benefit from the complexity posed by IT pressures on banks that include risk and compliance mandates, customer acquisition challenges and budget pressures.
Makhija notes that tech strategies don't look the same for all institutions. "There is a ton of jargon in tech, and not everyone wants to be on the most bleeding edge of technology. Some banks want to move more aggressively into social media, for example, while others are more conservative."
Infosys uses a variety of techniques to marry a bank's demand for new tech with its business requirements, such as consulting and maturity models that measure the institution's development cycle and how that cycle may impact its business objectives. The firm is also focusing on hosting entire business units. "We have designed a set of platforms that take a core function like HR, and we host the entire function in our data center from recruitment to retirement. It's starting to move into other core units," Makhija says.
Other new developments include a new infrastructure testing service, in which companies can test the business readiness and performance of their IT infrastructure during major changes such as data center consolidation, virtualization and other tech upgrades. It also launched the Infosys Cloud Ecosystem Hub, which allows firms to create, adopt and govern cloud services. The hub includes a decision-making tool that leverages more than 20 parameters such as quality of service, technology compatibility, regulatory compliance needs and total cost of ownership.
Infosys' adjustments have not caused the economic pressures to fade entirely. Barclays Capital's equities researchers in late August downgraded Infosys from an "overweight" to an "equal weight" saying the firm was missing guidance and possibly underestimating risk. Infosys reported $0.73 per share for the most recent quarter, missing the consensus estimate by $0.01.
Makhija says that when dealing with economic challenges, Infosys has adopted a strategy in which the nature of the challenge, its impact and how the business is responding is communicated to each staff member. He says in such cases consistency and transparency of the message and plan is important "so even programmers will hear the same message from their immediate manager."
By John Adams
We asked the leaders of the top 10 FinTech companies what's ahead for them and what it takes to be a great tech boss.