Fundtech Ltd., a provider of Internet banking and cash management software, has announced a plan to go wireless.
The Israeli company, whose U.S. corporate headquarters is in Jersey City, said last Monday that it plans to make its cash management, payment processing, and funds transfer software available on hand-held devices.
Paul Citarella, Fundtech's executive vice president of corporate marketing, said the company will make further announcements on wireless software in the next couple of months.
Michael Carus, Fundtech's chief operating officer and chief financial officer, said wireless offerings would be a natural progression from the Microsoft Windows operating system, which was once the dominant platform for cash management software, and from the Internet.
"We saw that corporations were moving toward the Web for transactions, and we provided banks with our systems on the Internet," Mr. Carus said. "Now we see on the horizon more and more wireless applications. We are moving up the food chain, from Windows to the Web to mobile."
Fundtech's plan would make it an early mover. Banks have just begun to explore the possibility of letting their corporate customers gain access to cash management information through wireless devices. Wachovia Corp., which announced its wireless plan on July 10, was one of the first to do so.
"There's a lot of excitement surrounding wireless solutions, particularly in financial services," said Andrew Jeffrey, a senior research analyst at the Robertson Stephens unit of Fleet Financial Corp. "I view it as another service access point you can layer on top of Internet or dial-up access. I don't view it as a fundamental shift in functionality."
Fundtech should continue to focus on maintaining its technological edge, Mr. Jeffrey said. "If they maintain themselves in the forefront of technology and solutions, they are going to win."
Mr. Jeffrey has a "buy" rating on the stock, which closed Friday at $25, up from $24.50 last week. "I think it's relatively undervalued," he said. "It's probably the only company with this level of functionality with a real-time platform. Fundtech has the first-mover advantage."
Lehman Brothers initiated coverage of Fundtech Friday with a "buy" rating and a $39-per-share price target.
Mr. Carus said more than 650 banks use the Fundtech platform. Last year the company won a contract to supply a settlement system for the 63 member banks of Continuous Link Settlement Bank, a clearing vehicle for foreign exchange trades.
"Fundtech really started to lock up the international market when the CLS banks agreed to settle foreign exchange transactions using [Fundtech's] real-time, gross settlement network," said Gary Craft, a managing director and analyst for e-finance at Deutsche Bank.
Mr. Citarella said Fundtech is hoping to form partnerships to help it continue its expansion into large banks. Announcements of partnerships will be made in coming months, he said.
"We had a history of working with mid-tier banks," Mr. Carus said. "We've just begun to penetrate the high-end market by working with larger banks and want to continue to do so."
Fundtech's second-quarter revenue rose 13% from the first quarter, to $11.3 million.
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