In a bid to help financial institutions leverage real-time
banking capabilities and reduce costs considerably,
Fidelity National Information Services, Inc.
) recently rolled out a cloud-based real time service for
mid-tier Central and Eastern European banks.
Banking, as an industry, is evolving every day, consequently
the demand for outsourcing some of the non-core services and
adopting software as a service (SaaS) offerings is increasing
Fidelity's latest offering is expected to make it easier for
mid-tier banks to launch new and competitive products quickly and
in a cost effective manner and enable them to serve customers
FIS has made it clear that the company wants to focus on its
core banking and financial institution business. FIS
finalized a deal with
Bank of America Corp.
) to sell its electronic benefits-transfer business, which is
expected to fetch more than $200 million.
Last year, the company sold its health-care benefit business
to Lightyear Capital LLC for $335 million for the same reason.
Therefore, we can expect innovative banking solutions, new
products and more involvement from the company in this segment in
the coming days.
We believe that Fidelity's commanding position in the
financial services market, increasing international exposure,
recurring revenue model, diversified product portfolio, cost
synergies from acquisitions and a loyal customer base will drive
growth over the long term.
On the other hand, increasing consolidation in the banking
sector, a challenging environment for the Payments Solutions
business and uncertain regulatory environment are the primary
headwinds, in our view. Moreover, competition from
) is a major concern in the near term.
Currently, Fidelity has a Zacks Rank #3 (Hold).
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