Careers at Fiserv
Fiserv’s mission is to provide integrated technology and services solutions that enable best-in-class results for its clients.
Fiserv is a provider of financial services technology. The company operates two reportable business segments:
- Payments and Industry Products (“Payments”) – Provides institutions with products and services needed to process electronic payment transactions and give customers access to financial transaction/services capability through digital channels. Specific solutions are Electronic Payments, Digital Channels, Card Services, Biller Solutions, Output Solutions, Investment Services, and Risk Management Solutions.
- Financial Institution Services (“Financial”) – Provides institutions with products and services needed to run their operations. Specific solutions are Account Processing, Item Processing, and Lending/Other Solutions.
In 1982 George Dalton was the president of First Data Processing, a subsidiary of First Bank Systems. He had extensive knowledge of the burgeoning financial data processing sector, and wanted to test some new technology ideas he had. He figured it would be a good idea to partner with other heads of bank data processing departments so they could share software development costs. He believed that doing so could cut expenses down by as much as 60%.
Dalton found a willing partner in Leslie Muma, a friend of his since the 1970s. Muma was the President of Sunshine State Systems, a subsidiary of Freedom Savings and Loan Association. He was also highly knowledgeable about data processing systems. The two wanted to offer a solution that would provide increased efficiency to clients through economies of scale. They determined that to make their idea work, they would need to build a large network of customers and service offerings.
At the time their subsidiaries were overseeing over 100 clients and earning annual revenues of over $22 million. Dalton and Muma attempted to merge the two firms, but met with failure. In response, they raised venture capital funds and used the money to buy their companies. They then merged the firms to form Fiserv in 1984. The men had been compelled to surrender 89% of the new venture’s equity to their investors, but did not care – they were just happy to establish their vision.
That vision involved saving clients money. Up to that point, most businesses created their own data processing software and maintained their associated systems in-house – usually at a constantly increasing cost. Fiserv planned to handle customers‘ data processing activities for them. Because the company would be using the same systems for all of its clients, it could significantly cut down on their expenses. Fiserve aimed to build its user base by acquiring other data processing firms.
Dalton set about overseeing growth efforts, while Muma worked on establishing an efficient operation that could easily take on new acquisitions. The company began expanding aggressively, and its success enabled it to go public in 1986. By 1989, it had acquired 16 companies and was generating revenues of $700 million. By the early 1990s, Fiserv was using 20 data centers to process data in 36 states. It had become the fastest-growing financial data processing company in the U.S.
Business model of Fiserv
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.
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.
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.
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.
Fiserv’s business model entails designing and developing software and associated services for clients.
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
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.
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.
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.
info: Jeffery earned a B.S. in Business Administration from California State University at Los Angeles. He previously served as Executive VP and Chief Operating Officer of H&R Block, as well as President and CEO of American Express Tax and Business Services.
info: Shawn earned a Bachelor's degree in Public Administration from George Mason University. He previously served as Executive VP and Chief Sales Officer of Acxion Corporation and as Sales and Account Management Leader at Electronic Data Systems.
info: Mark earned a B.S. in Accounting and Finance at Drake University and an MBA in Finance and Economics at the University of Chicago. He previously served as Deputy Commissioner for Operations Support at the I.R.S. and as CEO of Bellevue Capital.
info: Robert earned a Bachelor’s degree in Business Administration at Marquette University and an MBA at the USC Marshall School of Business. He previously served as CFO of Lennox International and held several executive roles at Honeywell.
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