Fiserv Drives Deeper Into Data Sharing And Leverages Its BentoBox And Finxact Deals

Fiserv Inc. in recent years hasn’t been shy about entering new businesses, and now the company is preparing for an expansion of its stake in a market that has picked up considerable momentum in recent years: the data management that lies at the foundation of such operations as open banking. “We expect data analytics to be a new growth driver for us,” said Frank Bisignano, Fiserv’s chief executive, during a conference call with equity analysts Wednesday morning. “We expect to be in the market the latter part of this year.”

That move will follow deals Fiserv has concluded this spring with the open-banking firms Finicity and MX and with the data-reporting company Equifax. The Equifax tie-in, expected to go live later this year, will support a service that will deliver data in real time to help firms evaluate risk in business-to-business relationships. Meanwhile, MX will be the first company to access tokenized consumer data held by Fiserv’s AllData Connect service, while a connection with Mastercard Inc.’s Finicity unit will allow financial institutions to more readily gain consumer consent to share data with Finicity’s platform.

Fiserv’s top management made clear the trio of agreements represents a major push by Fiserv further into real-time data, analytics and sharing. The connections with MX and Finicity, indeed, represent “a new revenue stream,” Bisignano told the analysts, without being more specific. “We always believed we had a data advantage, [now] it is manifesting itself.”

Data sharing lies at the foundation of open banking, a business that has gained considerable prominence over the past few years as fintechs seek to expand their consumer reach.

Meanwhile, Fiserv is capitalizing on a pair of recent acquisitions. It is weaving capabilities from BentoBox, a company it acquired late last year, into its Clover point-of-sale system, Bisignano said, adding that task is “well under way.” Bentobox’s technology supports restaurant Web sites and online-ordering capabilities. 

And earlier this month, the company closed on its $650-million deal for Finxact Inc., a developer of core-banking systems. “We’ve already seen tremendous interest in that platform from existing and new clients,” Bisignano said during the call, during which he discussed Fiserv’s first-quarter results. “Finxact was a very big acquisition. It sets us up for the long haul.”

For the quarter, Fiserv reported $3.9 billion in revenue, up 10% from the same period last year. Its merchant-acceptance division, the largest of its three operating units, took in $1.65 billion, up 18%. Clover, aimed at smaller merchants, processed $197 billion in annualized gross payment volume, Fiserv said, and saw its revenue grow 39%.

The payments and network unit, which includes Fiserv’s operations for the Zelle peer-to-peer payment service, saw its revenue increase 4% to $1.47 billion. Fiserv said its Zelle transactions grew 40%, though it did not release absolute figures. The company’s third unit, financial technology, increased revenue 6% to $778 million. During the quarter, the unit launched AppMarket, which offers financial institutions easier access to fintech solutions.