Fidelity National Information Services Inc.'s nearly $3 billion deal to buy Metavante, and vault itself over market-share rival Fiserv, is arguably the most important financial technology deal of the decade. But, truth told, it's something of a miracle that it came together at all.

The talks began in July 2008 when Metavante President and CEO Frank Martire called Lee Kennedy, then Fidelity's president and chief executive officer. The call, as Martire tells it, was merely a chat about trends in the industry. At the time, Metavante had been independent for eight months, after being spun off in November 2007 by the Milwaukee banking company Marshall & Ilsley Corp.

The process may have begun innocently, but the logic of a strategic combination became increasingly compelling. Within weeks executives were meeting to see whether they could pull off a deal. "We all realized this could make a lot of sense for us," Martire said. "What drove us over the edge was the people, the chemistry the people had."

That first call had come in July, not long after Countrywide Financial was rescued by Bank of America Corp. and around the time IndyMac Bank failed. As conversations continued into August, Metavante decided talks were serious enough to hire a financial adviser. By early September, when federal regulators took over Fannie Mae and Freddie Mac, the pair had entered a confidentiality agreement. At the same time, Metavante received a written "indication of interest" from a still-unnamed suitor that proposed to buy Metavante for a combination of cash and stock.

A week or two later, after discussions with the rival bidder, Metavante's board decided Fidelity made the better fit; the two companies entered exclusive negotiations. But in a stroke of cosmic bad luck, the deal adviser Metavante had chosen back in August was Lehman Brothers Inc., which failed spectacularly on Sept. 15. And then things got worse. With the collapse of debt markets and a freeze in credit, merger talks came to a halt — there was no way the pair could finance a deal. The companies called off their exclusive negotiations in November.

But the deal was irresistible. By March, as markets stabilized, Fidelity and Metavante were in serious talks once again.

Lee Kennedy, now Fidelity's vice chairman, envisioned the combination's making his company the world's largest banking technology products and services provider and believed Fidelity would need that kind of scale to face potential newcomers to the market. "There are going to be larger competitors in this space in the not-so-distant future," including Oracle Corp. and IBM, Kennedy told analysts.

The companies announced their deal on April 1 and, after an antitrust review, officially closed it on Oct. 1. Fidelity is now the largest vendor serving the banking industry, with $5.4 billion of combined revenue, ahead of Fiserv Inc., the Brookfield, Wis., vendor that has $4.7 billion in revenue. (Fiserv remains No. 1 in the FinTech 100 ranking based on 2008 calendar year revenue.)

Getting the deal done in this economy may have been the highest hurdle, though. Analysts say the new Fidelity should have it easy when it comes to integrating the two cultures — because of the people chemistry Martire referred to. "From a culture perspective, they're similar. Both are predominantly processors that tend to focus on operational efficiencies," said Vijay Balakrishnan, the president of the Atlanta consulting firm Stratex LLC. "Metavante brings an extremely strong focus on customer service; that's a very powerful combination that will bode well for the combined company," he said.

The integration risk comes in the product decisions the company must make. The deal's centerpiece is the new company's dominance in core deposit-accounting systems, said Robert Hunt, senior research director of retail banking at TowerGroup in Needham, Mass., an independent research group owned by MasterCard Inc. The combined company has more than 2,000 core customers, including 48 of the top 100 banks, but "figuring out how to rationalize the various product lines that exist at both companies will be the biggest challenge," Balakrishnan said.

Martire takes pains to reassure customers that products will not face sunsetting, but high on the company's to-do list is the demand to update Metavante's primary core product, Integrated Banking Solution, said Bart Narter, a senior analyst at Celent in Boston, the financial research arm of Marsh & McLennan Cos. Inc.'s Oliver Wyman consulting unit.

Before the merger Metavante was working with Temenos Group AG in Geneva to use its real-time technology in an IBS update, Narter said. "The implicit message was that the old system isn't good enough."

But Metavante scrapped the Temenos arrangement after it struck its deal with Fidelity, and executives have not been very forthcoming with details of their plans for IBS, Narter said. "They're going to have to answer that question," he said, "or they're going to start to have customer defections."

Martire said the decision about Temenos was strategic and that access to Fidelity's real-time Profile core system will fill that gap. "Now we have a next-gen system that we totally own," he said.

John Kraft, an analyst at D.A. Davidson & Co., said the combined company's greatest competitive asset may be an increased ability to cross-sell products outside the core business to its existing customers. "If you can increase your suite of products, you can sell more to your existing core customer base, and that's a winner," Kraft said.

Most analysts discount the near-term threats from IBM, Oracle and international vendors like Infosys Technologies Ltd. and Temenos, at least in the U.S. market. With Fidelity and Fiserv the two Goliaths at home, they said, the greatest pressure will be on smaller vendors. Christine Barry, a research director at the research and advisory firm Aite Group LLC in Boston, pointed to two privately owned core vendors — Harland Financial Solutions Inc. and Open Solutions Inc. in Glastonbury, Conn., — as being especially at risk. "It's going to be tougher and tougher for smaller players to survive in the market," she said.

And though the merger took much longer to consummate than either side would have liked, perhaps its timing was not all that bad.

Customers have been "very focused on weathering the storm," said Gary Norcross, a corporate executive vice president at Fidelity and its chief operating officer, and they were not spending money on anything but survival. But with the economy showing some signs of recovery, the business climate has changed. "Our banks are starting to talk now about spending some money and pursuing some of their strategies," he said.