fis

Businessmodel of FIS

Customer Segments

FIS has a niche market business model, with a specialized customer segment. The company targets its offerings at financial services institutions such as regional and community banks, hedge funds, brokerages, private equity firms, fund administrators, trust companies, and insurers.

Value Proposition

FIS offers three primary value propositions: accessibility, performance, and brand/status.

The company creates accessibility by offering a wide variety of options. It has grown through a large number of acquisitions, which has enabled it to expand its capabilities. Competencies it has added over the years include integrated consulting services, integrated core banking and payment solutions, mobile banking solutions, item processing services, card issuer services, risk management solutions, electronic loan amendment applications and services, electronic funds transfer services, and prepaid/gift card processing for community banks, credit unions, and other financial institutions.

The company has demonstrated strong performance through tangible results. High-profile examples of positive outcomes for clients include the following:

  • Bharatiya Mahila Bank used FIS’s services to build its entire technology platform, enabling it to launch its first seven branches just 90 days after hiring FIS as its technology partner
  • eftpos, an Australian payment network, used FIS’s services to establish a single, high-volume payments hub that enabled it to reduce its time-to-market and save millions in operating costs
  • Kitsap Bank used FIS’s services to engage its customers that use online banking, enabling it to influence 28% of new product sales and achieve a 6.5x increase in return on investment
  • Wintrust, a community bank, used FIS’s services to introduce mobile cash withdrawal for customers, improving satisfaction and helping it grow account volume by 12-15%

  • Maitland, a third-party administrator, used FIS’s services to provide an integrated platform for fund managers, enabling it to manage 70,000 trades per month and achieve 2x asset growth The company has established a strong brand due to its performance. It bills itself as the largest provider of core processing, transaction processing, and card issuer services to financial institutions worldwide. It employs over 55,000 people who serve over 20,000 clients in more than 130 countries. Its technology powers billions of transactions yearly that move more than $9 trillion around the world. Lastly, it has won many honors, including the following:

  • Recognition as one of the “World’s Most Admired Companies“ by *Fortune *
  • Aite Awards for Excellence in Core Banking Solutions and “Tightest Integration“ in the industry
  • The “Best Mobile Banking Technology“ Award at the World Finance Technology Awards
  • The “Best Payments Product/Service“ Award by Banking Technology
  • BPO Excellence Awards at the Asia Outsourcing & Congress Awards ### Channels

FIS’s main channels are its direct and indirect field sales teams. It also sells its offerings through telesales efforts and inbound/outbound lead generation. The company promotes its offering through its social media pages and participation in expos, trade shows, and conferences.

Customer Relationships

FIS’s customer relationship is primarily of a self-service nature. Customers utilize its software while having limited interaction with employees. The company’s website features a “Thought Leadership” section that includes self-help resources such as articles, white papers, and eBooks.  That said, there is a personal assistance component in the form of its consulting and transformation services.

Key Activities

FIS’s business model entails designing and developing software and services for its customers.

Key Partners

FIS maintains a joint venture with Brazilian bank Banco Bradesco through which it provides transaction processing, call center, cardholder support and collection services to multiple card issuing clients in Brazil.

The company also forms alliances with other firms from time to time to enhance its offerings. For example, it maintains a partnership with Systemware, an enterprise content management firm, through which it integrates the firm’s technology into its banking applications.

Key Resources

FIS’s main resources are its human resources, who include the technology employees that design and develop its software and the consulting staff that provide its services. The company also relies on third-party vendors from time to time to provide technology components for its applications.

Cost Structure

FIS has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is cost of revenues, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

FIS has three revenue streams:

  • License Revenues – Revenues generated through fees paid for software licenses
  • Service Revenues – Revenues generated through fees paid for consulting, professional, technology, and processing services
  • Transaction Revenues – Revenues generated through fees charged for transaction processing The company typically includes fees for all of its offerings in multi-year contracts, making most of its revenue recurring in nature.
Written on October 25, 2017