Businessmodel of Fiserv

Customer Segments

Fiserv has a niche market business model, with a specialized customer segment. The company targets its offerings at financial institutions such as banks, credit unions, thrifts, securities broker dealers, and finance and leasing firms.

Value Proposition

Fiserv offers three primary value propositions: accessibility, cost reduction, and brand/status.

The company creates accessibility by offering a wide variety of services to a broad range of financial institutions. It has acquired more than 150 firms with complementary offerings since its founding, which has enabled it to add many new capabilities to its portfolio.

The company reduces costs by providing the option to manage clients’ data processing operations. This saves them the expense of having to create processing software and manage systems in-house.

The company has established a powerful brand as a result of its success. It has more than 13,000 customers and generated revenues of $5.3 billion in 2015. It employs over 22,000 workers who operate in over 120 offices in 115 cities. Fiserv has also won many honors. These include recognition as the third top-provider of technology to U.S. banks in terms of revenues (2015), one of the “World’s Most Admired Companies” by Fortune *(2016), and placement on the *Forbes Global 500.

Channels

Fiserv’s main channel is its direct sales force, which operates worldwide. The company promotes its offering through its website, social media pages, and attendance/sponsoring/hosting of trade shows, conferences, and other financial industry events.

Customer Relationships

Fiserv’s customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees. The company’s website features a “Resource Center” section with a number of self-help resources, including best practice guides, brochures, case studies, consumer research papers, point-of-view papers, white papers, and webcasts. That said, there is also a personal assistance component in the form of phone and e-mail support.

Key Activities

Fiserv’s business model entails designing and developing software and associated services for clients.

Key Partners

Fiserv maintains an Enterprise Sourcing Services (ESS) team, whose purpose includes identifying ethical suppliers of high-quality products and services it can partner with. All suppliers must meet the following approval requirements:

• Supplier-business verification
• Financial review
• Insurance validation
• Office of Foreign Assets Control (OFAC) terrorist watch list screening
• Provision of a single ACH payment remittance

• Agreement to utilize the Coupa Supplier Network (CSN) to acknowledge receipt of Purchase Orders and to invoice Fiserv electronically against those orders. Fiserv also forms partnerships on a regular basis with providers of complementary offerings. Examples of these arrangements include:

• Integration of Sageworks’ risk management solutions into Fiserv’s processing platforms
• Integration of Automated Financial Systems’ AFSVision solution into Fiserv platforms
• Delivery of Fiserv’s integrated communications capabilities to Cisco’s organization
• Combination of Early Warning’s risk management solutions with Fiserv’s payment solutions ### Key Resources

Fiserv’s main resources are its human resources. These include employees with strong backgrounds in the financial industry and computer science, as well as those with expertise in software development, programming, network control and technical support, business process outsourcing, client services and training, and account management. The company has important physical resources in the form of data, development, item processing, and support centers in 110 cities.

Cost Structure

Fiserv has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of processing and services, a variable cost that includes expenses associated with personnel, infrastructure, and equipment communication. Other major drivers are in the areas of sales/administration, a fixed cost, and cost of product, a variable expense that include costs of materials and software development.

Revenue Streams

Fiserv has two revenue streams:

Processing and Services Revenues - Revenues generated from transaction-based and account fees under contracts that typically have terms of 3 – 5 years accounted for 84% of revenues in 2015.

Product Revenues – Revenues generated from integrated print and card production sales, in addition to software license sales, accounted for 16% of revenues in 2015.