Metavante Corp.'s plan to drop the brands of three companies it has purchased over the past two years may indicate it is moving beyond the acquisition phase of its imaging strategy to focus on marketing.
The technology subsidiary of the Milwaukee banking company Marshall & Ilsley Corp. said the rebranding will create a more unified imaging division that will be easier to market than multiple companies with related products and unrelated names.
Several other technology vendors have followed the same path, and industry watchers approved of Metavante's decision.
Vijay Balakrishnan, the vice president of strategic marketing at Metavante Image Solutions, did not rule out further acquisitions, but he said his company's product lineup now has almost every piece of the imaging puzzle, including in-house software and outsourced services for large and small banks and their business customers; clearing systems for forward presentment, returns, exceptions, adjustments, and fraud; and an exchange network.
"Customers are looking for people who can come up with comprehensive solutions," he said.
The unified branding would help Metavante win market share among both large and small banks, regardless of their preference for in-house or outsourced check processing, Mr. Balakrishnan said.
Demand for the technology is increasing, he said. There was a period of 12 months or so "when the whole industry was in a freeze," but "now momentum is picking up."
Metavante created the Metavante Image Solutions unit in January to house four companies: VectorSGI, a big-bank imaging system developer purchased in November 2004; Advanced Financial Solutions Inc., a small-bank system developer acquired in July 2004; Treev LLC, a noncheck document software maker acquired in August; and Endpoint Exchange, an image-exchange network created by several AFS executives. Metavante acquired the network as part of the AFS deal.
Mr. Balakrishnan was hired this year to run the unit. He was an executive vice president at the Atlanta imaging software company Alogent Corp. but left in October as part of a restructuring there.
Under the new structure, which Metavante is planning to announce this week at the Bank Administration Institute's TransPay 2006 conference in Las Vegas, the Vector, Treev, and AFS brand names will disappear. It also plans to roll out several applications at the conference.
Only Endpoint Exchange would retain its name. Mr. Balakrishnan noted that Endpoint Exchange provides a service - the use of its network - while the other three companies offer software, which makes it easier to absorb them into Metavante's overall corporate structure.
The rebranding effort is similar to those of other large core-processing vendors.
Jack Henry & Associates Inc. of Monett, Mo., said in February that it had set up a division, ProfitStars, to house more than a dozen businesses it had acquired over the preceding 18 months.
Fiserv Inc., which has long allowed its acquisitions to operate as autonomous units under their own identities, is reviewing that strategy. Jeffery W. Yabuki, who was named Fiserv's president and chief executive in November, said last month that he believed it could gain efficiency by consolidating some units. He plans to announce the results of the review by September.
Bob Meara, a senior analyst at the Boston research and consulting firm Celent LLC, said that deciding whether to discard brand names is "always the dilemma," but having multiple brands aimed at multiple markets makes it hard to sell everything effectively.
For example, the Vector software is aimed at large banks, but Metavante's historic customer base has been community and regional ones, Mr. Meara said. Creating a single brand is "probably the only viable way [for Metavante] to approach it."
Mr. Meara and Mr. Balakrishnan used to work together at Alogent.
Robert Hunt, a senior analyst at TowerGroup, a Needham, Mass., market research unit of MasterCard International, said Metavante has already integrated the work forces of the various units, and rebranding the businesses was the next logical step.
"In the end, it's absolutely the right thing to do," Mr. Hunt said. "They've created a monstrous payments business over the last several years. This clears up a lot of confusion."
Though consumers and businesses are writing fewer checks, Mr. Balakrishnan said the imaging software business would be strong for years to come, because the long, slow decline eventually will drive up processing costs per item, and banks will implement electronic systems before that happens.
"There is still a lot more image-enabling to do," Mr. Balakrishnan said. "You need to take costs out faster than the secular decline takes place."
Mr. Hunt said the transition in payments is likely to extend at least through 2010. "I see several years of IT expenditures and reengineering in the payment world."
