Fiserv Inc. said it has acquired a Dutch security software firm whose risk management and fraud-fighting capabilities will be incorporated into all its core processing systems.
The Brookfield, Wis., financial technology company announced Wednesday that it had purchased NetEconomy of the Hague from the British venture capital firm Esprit Capital Partners LLP. The price was not disclosed.
Lisa Fiondella, a senior vice president of business and product development at Fiserv, said it plans to pursue other partnerships and acquisitions in the area and to build additional risk management systems internally.
"You'll see a lot more activity in this space from us," she said. "We're open to all types of approaches in building out the product set."
Virginia Garcia, the vice president of product and management strategy at Fiserv CBS Worldwide, said the deal addresses "a gap in our solutions portfolio."
Fiserv Inc. plans to offer NetEconomy's technology as licensed software for in-house installations and as an outsourced service, to both international and domestic customers.
Fiserv offers more than a dozen core processing systems and services. "We have different deployment models here," Ms. Garcia said.
The executives said Fiserv plans to make fraud and risk management a major focus of its business. Ms. Fiondella said she joined the company less than two weeks ago, and that focusing on these issues will be one of her main responsibilities.
Ms. Garcia said, "We had a pretty extensive strategic exercise here at Fiserv over the past several months. We did the right thing by taking the strategic view, the long view."
NetEconomy provides a foundation for Fiserv to offer an "enterprise risk management" strategy to its clients, she said. "We intend to be leaps and bounds ahead of the competition by the time we come out of the solution-development effort."
But some of Fiserv's core-processing rivals have already acquired such technologies. Jack Henry & Associates Inc. of Monett, Mo., purchased Yellow Hammer Software Inc. of Gardendale, Ala., in February 2004, and Marshall & Ilsley Corp.'s Metavante Corp. bought Prime Associates Inc. of Clark, N.J., in February 2005.
Tom Price, a senior analyst at TowerGroup, a Needham, Mass., independent research firm owned by MasterCard Inc., said NetEconomy is one of the top three vendors in its field, alongside Mantas Inc. of Fairfax, Va., and the Irish vendor Norkom Technologies.
"Fiserv went for a big one," he said. "It's a hot space. Everybody is concerned. Nobody wants a black eye."
NetEconomy, founded in 1993, developed its Efficient Risk Analysis System Enhancement system for the telecommunications industry to detect mobile phone fraud. The system's first financial client, in 1999, was ING Group NV of Amsterdam, which uses the system in both its banking and insurance businesses.
NetEconomy says it has 130 implementations in financial institutions, including retail, private, wholesale, and offshore banks, as well as securities firms and prepaid debit card processors.
It also provides a hosted anti-laundering service to U.S. credit unions. Neil Katkov, a senior analyst at the Boston research and consulting firm Celent LLC, said Fiserv no doubt would extend that hosted offering to the community-scale institutions that are its primary customers.
"It makes sense, especially for smaller institutions, but there might be some sensitivity to outsourcing, essentially, surveillance on their customers," Mr. Katkov said.
