Comments on Fiserv Acquisition of ACI
A number of you have asked me about implications of the ACI acquisition by Fiserv. Here are some thoughts.
By now you have seen news of the acquisition by Fiserv of ACI’s Internet Banking solutions group. I want to address this at a macro and a micro level. First, let’s take on the macro side. The banking software industry has mirrored the banking industry itself, by consolidating. We now have an oligopoly in banking software – three firms control a majority of the market. In such an environment, further consolidation is almost inevitable, as the big players seek to drive more revenue from ancillary products. You will see more of these types of acquisitions, as it becomes harder for third party, best of breed solutions to sell product into banks directly.
At the micro level, this is a win for Fiserv. It gives them an integrated product that works across all platforms, and includes both business and personal Internet banking capabilities. As mobile becomes increasingly important – to both consumers and businesses – demand for enhanced capabilities will increase. Fiserv’s current setup features distinct products for consumer and commercial, creating an unnecessarily complex delivery channel. If you are an ACI customer using a Fiserv core today, you may find that your product becomes the main Fiserv offering, rather than being replaced. When you consider that Fiserv acquired fewer than 600 customers, many of who are Credit Unions, you will see that this was more than just an effort to buy customer base. The product is important, and that’s good news for ACI customers.