Slideshow Top 10 FinTech Vendors Share 2015 Plans

  • November 12 2014, 5:20pm EST

The leaders of the most successful tech companies serving the financial services industry share hints about their business and product strategies for the coming year and observations about customers' tech preferences.


FIS, which has more than $6 billion in annual revenue and 39,000 employees, operates an internal think tank called "Bold Rocket." The group is tasked with imagining what banking and payments will look like in the future and coming up with ideas for future products.

"We start with the question of, why does a financial institution need to exist in 10 years," said Gary Norcross, the Jacksonville, Fla. company's president and chief operating officer, who will become chief executive officer in January.

The company says it reinvests 5-6% of its annual revenue into research and development. It also tracks between 200 and 300 early-stage companies in the fintech market each year, looking for opportunities to invest or acquire.

Digital products, including online banking and electronic payments, have been "really hot across all markets," Norcross said. The company's compliance and risk management group has also expanded.

And the rise in EMV-chip technology has boosted the company's credit and debit card business. "We're actually seeing growth — very nice growth — around our plastics," he said. "EMV is becoming a big catalyst."

The company in May launched FIS Instant Card, a cloud-based product that lets financial institutions produce EMV-chip cards when customers open new accounts.

Norcross says next year FIS plans to make big moves in digital payments, following its recent acquisition of Belgium-based payment processor Clear2Pay. It also plans to grow its risk management business, as banks prepare for regulatory scrutiny over fraud, security and vendor relationships. "We know that the regulators are looking very seriously at how these financial institutions do due diligence," Norcross says. — Kristin Broughton

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Tata Consultancy Services

The pursuit of innovative features in consumer banking channels seems to be reaching a plateau, but demand for seamless customer engagements will rise, according to K Krithivasan, global head of banking and financial services at Tata Consultancy Services, an IT services and consulting provider based in Mumbai.

An example is with a homebuyer, focusing on the home-buying process rather than a separate mortgage process.

Customer experience management — measuring it, determining investment priorities and planning next best actions — will become a key way for financial service providers to differentiate themselves, Krithivasan said.

Banks are also expected to continue to focus on cost optimization and simplification, Krithivasan said.

Banks face increased competition from non-banks. "Traditional industries, such as insurance, are pushing the envelope by offering select banking services. Non-traditional competition, in the form of PayPal, p2p and new forms of lending and services leveraging digital forces, offer serious alternatives to banking, albeit in lower volumes," Krithivasan said.

In 2015, Tata will keep working with financial institutions on digitization and IT simplification, Krithivasan said.

Some have realized that combining two or more of the digital forces — big data, social media, mobile and pervasive computing, robotics and artificial intelligence, and cloud — can bring benefits. — Keith Button


Mobility and transaction speed top the agenda this year for Fiserv, the largest provider of core processing technology for banks and credit unions.

"Whether it's Apple Pay or PayPal or Amazon or AliBaba, you have lots of nonbank providers of services and technology solutions making a foray into the financial services space," said Jeff Yabuki,

the Brookfield, Wisc. company's president and CEO.

For banks to stay ahead, effective payments technology will be key, including mobile deposit, person-to-person payments, and bill payments, he added.

Fiserv recently added a real-time payments feature to its Popmoney person-to-person payment service, and U.S. Bank became the first major bank in the country to roll it out.

"The real force in peer-to-peer is the ability to do instant money movement," said Yabuki. With Popmoney, funds can be delivered instantly when the recipient is a customer of a participating institution.

This fall, in reaction to Apple Pay, Fiserv announced a partnership with Visa and MasterCard in which Fiserv will offer "tokenization" capabilities that protect account numbers from being stolen and are required for Apple Pay. — Maria Korolov


An important technology for banks in the coming year, according to Cognizant, a consulting firm that provides IT and business process outsourcing services, is software that integrates all of the digital channels that customers use to access their bank, said Prasad Chintamaneni, president of banking and financial services at the Teaneck, N.J. company.

With the integration, a customer's transaction could begin in one channel and continue in another. Among other advantages, this integration increases cross-selling opportunities for the banks.

"Customer experience management as a planned initiative has a huge payoff for banks right now, if they can do it right," he said.

Another big category of spending for banks is risk and regulatory compliance, with custom initiatives implemented on tight deadlines, Chintamaneni said.

Cybersecurity is another area of big technology spending by banks, including access control, IT risk, and IT security software, as is analytics and big data, Chintamaneni said. — Keith Button

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NCR is helping banks integrate their physical and digital channels, rethink physical branch operations, and invest more in digital banking, according to president Andy Heyman.

Banks are increasing their investments in the architectural redesign of the branches and in technologies that increase customer engagement, put service first, and reduce costs and inconvenience.

One way is through assisted service. For example, NCR's Interactive Teller product puts a video connection right inside an ATM, allowing a live teller to provide personalized service or even take remote control of the ATM.

And NCR's Interactive Banker product allows branch employees to move between stations with a tablet computer.

"We believe these types of assisted service technologies will play a pivotal role in the retail banking experience over the next decade," said Heyman.

NCR, which is based in Duluth, Ga., does business in 160 countries, enabling more than 485 million transactions per day, powering more than 600,000 ATMs with its software, and annually processing more than 330 million online and mobile transactions, 100 million smartphone check deposits, and 200 traditional self-service check deposits, the company says. — Maria Korolov

Infosys Limited

A key driver for U.S. banks' technology spending is cost pressure, said Mohit Joshi, executive vice president and global head of financial services at Infosys, a consulting, technology and outsourcing company based in Bangalore.

"With all of the discussions we're having with our capital markets clients, especially the guys on the sell side, they realize that they need to take at least 30 to 40% of costs out of the back office," Joshi said.

That focus on cost reduction is leading more banks to take on utility solutions — multi-tenant platforms with technology and operations combined, Joshi said. Large companies that are customers of multiple banks are also driving the utility trend, to ease compliance.

Infosys has already helped build a client on-boarding solution utility for a consortium of banks. Industry-standard utilities may also be developed for reference data, corporate actions and reconciliations.

Infosys is also working with many large clients to examine their software portfolios, optimize them and decommission sets that aren't needed. All the large universal banks have between 5,000 and 7,000 applications, and using so many applications brings a huge amount of cost and risk, Joshi said. — Keith Button


Diebold has been working this year to make its ATMs more environmentally friendly and secure. But the company isn't all about the hardware — it has also been working to expand its software and services.

This spring, North Canton, Ohio-based Diebold announced the Diebold 429 ATM, which uses the same amount of power required to run a traditional incandescent light bulb.

It also recently debuted the ActivEdge card reader that's designed to protect ATMs against skimmers, which cost the financial industry more than $2 billion a year.

"Skimming is a huge issue at the ATM, and this stops the problem cold," said president and CEO Andy Mattes. Diebold also cofounded an industry association for ATM security this summer.

"The bad guys are organized around the globe to attack ATMs; it's time for the good guys to do the same," he said.

Meanwhile, Diebold is transitioning its business model to focus more on services. In fact, about 57 percent of the company's total business already comes from services and software. "While we have our feet planted in the physical world of cash, we know where the puck is going," said Mattes. — Maria Korolov

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In the last 18 months, bankers have had a shift in thinking about managed services, according to Steve Silberstein, SunGard's chief technology officer (the company is based in Wayne, Pa.).

"There's a recognition that there's a fair degree of operations which are generic to the business, and are not going to be differentiators going forward, so better to work toward creating some sort of managed service," he said. "That's a very significant change in direction."

Besides the accelerating demand for managed services, Silberstein said, he is also seeing more bank demand for cloud-based applications to solve problems, and outsourcing of application management and business processes. "The pressures (on banks) are so great, they are driving a new state of mind."

Banks continue to invest in technology for the front-end systems serving small-mobile-device users. There's also been an opening up of the supply chain created by making application program interfaces available to third parties, Silberstein said. "That is where the on-demand nature of public clouds is particularly cost compelling," he said. — Keith Button


Nomura Research Institute, Japan's largest IT consulting firm, has been helping Japan's financial institutions expand to other countries and consolidate their IT platforms to better manage their risks and internal governance.

For example, Japan implemented individual savings accounts at the start of this year, and Tokyo-based NRI upgraded its systems to handle the new line of business and provided outsourcing support, especially for compliance.

"Not only in the banking industry but in the financial market as a whole, it seems that institutions are experiencing regulatory exhaustion," said Yasuki Okai, NRI's head of financial technology solutions.

NRI has restructured its U.S. branches to better support operations there, and was the first Japanese corporation to offer PCI DSS assessment services outside Japan.

In one major industry trend, Okai is seeing financial institutions move to the cloud. NRI recently began designing utility services that combine technology and operations. — Maria Korolov

CA Technologies

As banks recognize that their new competitors aren't necessarily other banks, they'll have to step up their software development capabilities, said John Michelsen, chief technology officer at CA Technologies, New York.

"The ability to develop really compelling new interfaces I think is something these guys have got to figure out, because they are now going to compete more with Google, Facebook, and Apple," Michelsen said.

Those new competitors are "known for their ability to embrace the user on an emotional level. I love an iPhone; I use an ATM,"

Michelsen said. "Clearly ATMs are getting better and better, but would anyone argue that they're aesthetically really compelling devices to interact with?"

Banks realize they have to create a really compelling user experience, he said.

Another area that CA Technologies is investing significantly in is development operations. How well banks compete will depend on their ability to build, test, deliver and operate software, especially mobile applications, Michelsen said. The company is focused on accelerating that process so banks can be more responsive and reactive to the market. — Keith Button