douglasblakey

The world’s largest remittance
player has teamed up with two leading financial technology
companies in the US as it – and its new partners – look to offer
comprehensive tech packages to banks and other agencies. The deals
come at a time when Western Union has reported Q1 net income up 8
percent, writes Douglas Blakey.

The world’s largest remittance player, Western
Union, has teamed up with Fidelity National Information Services
(FNIS) to offer a global money transfer service to FNIS’ 8,500
banking clients throughout the US.

According to Western Union, the deal with
FNIS, which ranked second in the 2008 league of the global fintech
industry’s Top 100 leading players by revenue (see RBI
603), will boost its US “go-to-market” strategy, designed to
drive its expansion into consumer banking channels.

The tie-up means FNIS clients offering Western
Union’s services can connect with more than 334,000 Western Union
agent locations worldwide.

Announcement of the agreement on 20 April came
two weeks after FNIS partnered again with Western Union as well as
leading online financial application and payments provider Yodlee
in a separate deal, to expand the value and capabilities of online
bill payment for FNIS customers and other leading financial
institutions worldwide.

The FNIS deals capped a productive month for
Western Union, following a major deal penned in late March with the
sixth-largest US bank by deposits, US Bank, which agreed to offer
Western Union’s remittance services throughout its 2,791 branch
network.

In a presentation to analysts following
release of Western Union’s first quarter results on 21 April,
president and CEO Christina Gold said: “We are looking to open new
distribution points and are making progress in the US banking
channels as the US Bank and Fidelity National agreements would
suggest.”

Gold was equally upbeat about the significance
of the relationship with Yodlee.

“We will look to attract more partners and
sign more deals that leverage our ability to offer same day bill
payment in the US,” she said. “This is an important step to
expanding the segments’ reach into new customers and channels.”

Western Union’s recent strategy has been to
expand its distribution and its brand via banks’ branch networks to
augment its online channel. Recent customer wins have included
Deutsche Postbank in Germany and Scotiabank in Canada. The latter
deal already accounts for 2 percent of Western Union’s business in
the country despite being only a few months old.

And in an effort to boost its brand presence
even further, on 17 March Western Union stepped up its marketing
with the launch of the Yes! campaign, the company’s first
co-ordinated global marketing effort running across 200
countries.

Consumer-to-consumer traffic up
7%

First quarter highlights for Western
Union included net income up 8 percent year-on-year to $224
million, or up 1 percent excluding restructuring expense incurred
in the first quarter of 2008.

Global consumer-to-consumer transactions
increased 7 percent, while revenue down 5 percent year-on-year at
$1.2 billion.

While the global recession will inevitably
dampen demand for remittances, the World Bank reported in March
that total money transfers will fall only slightly in its
forecasts, from $305 billion in 2008 to around $290 billion in
2009.

And, added the World Bank, even with the drop,
remittances will still outstrip private capital flows, expected to
fall by half in 2009, and official development aid, typically
around $100 billion.

IT Contracts

RBI Fintech DealWatch
tracks recent major technology contract wins with a focus on the
retail financial services industry as well as fintech mergers and
acquisitions and innovative new product launches

Country

Participants

Type/value

Details

Date

US

JPMorgan Chase, 3i Infotech

Sale of payment processing unit

JPMorgan Chase is to sell its national retail
lockbox business (remittance processing) to Indian outsourcing
provider 3i Infotech. Financial details have not been disclosed

27 Apr

Norway

Sparebank, EDB Infobank

Data contract

SpareBank has agreed a five-year, NOK60
million ($8.9 million) deal to access a wide range of public and
private sector databases from data supplier EDB Infobank.

27 Apr

UK

Co-operative Financial Services, Infosys

Core banking contract

UK mutual Co-operative Financial Services is
to implement Infosys’ Finacle core banking, customer relationship
management and e-banking solution across its UK network, as it
readies itself for the proposed merger with Britannia Building
Society (see RBI 610).

24 Apr

India

Axis Bank, Bank of Baroda, ICICI

ATM outsourcing

Bank of Baroda and Axis Bank are the latest
Indian banks to investigate outsourcing the installation and
management of ATM networks, following the lead last year of State
Bank of India (SBI). Bank of Baroda has, according to local
reports, invited tenders from prospective vendors. Last year, SBI
outsourced the roll-out and maintenance of its ATMs on an
experimental basis in a joint venture with Tata Consultancy
Services. India’s largest private sector bank, ICICI, is said to be
planning to farm out its POS terminals but has decided to delay
outsourcing its ATM network.

23 Apr

Czech Republic

European-Russian Bank, Misys

Core banking contract

Czech-based European-Russian Bank, a
subsidiary of Russia’s First Czech-Russian Bank, has implemented
Misys’ Midas software solution.

23 Apr

Sweden

Handelsbanken, Red Hat, IBM

Hardware contract

Sweden’s Handelsbanken has deployed
virtualisation technology using Red Hat Enterprise Linux on IBM’s
hardware operating system to cut IT costs and help manage IT staff
better.

22 Apr

India

HDFC, IBM

Hardware contract

India’s HDFC Bank is to implement IBM’s
System z mainframe technology as the basis for a new IT framework.
According to the vendor, the system will enable HDFC to keep
critical credit card processing requirements in-house while
offering uninterrupted service to customers.

22 Apr

Australia

Commonwealth Bank of Australia, Telstra

Managed services contract

Commonwealth Bank of Australia (CBA) has
awarded a 10-year managed services contract worth up to A$100
million ($70.2 million) a year to Telstra. The Australian telecoms
contractor will provide a range of telecommunications services to
CBA’s branches, contact centres, Eftpos network and non-branch
ATMs.

22 Apr

China

Huishang Bank, Teradata

Data warehousing contract

Huishang Bank, a top 25 Chinese bank, is to
partner with data warehousing supplier Teradata in an enterprise
data warehousing project in China.

22 Apr

UK

Bank Monarch, Neptune Software

Software systems contract

The UK arm of US-headquartered Bank Monarch
is to deploy a range of software services from Neptune Software for
retail, corporate, treasury and trade services.

21 Apr

US

Navy Federal Credit Union, TSYS

Processing agreement renewal

One of the US’ largest credit unions, Navy
Federal Credit Union, has extended its core processing deal with
payment processor TSYS. Services provided under the agreement
include statement processing, card embossing, accounting and
settlement, fraud prevention, member service and collection
operating systems, correspondence and risk mitigation.

20 Apr

US

FNIS, Western Union

Joint venture

Fidelity National Information Services (FNIS)
is to offer Western Union’s remittance services to its 8,500
banking clients throughout the US (see above).

20 Apr

US

Oracle, Sun Microsystems, IBM

Acquisition

Oracle has agreed a $7.4 billion deal to snap
up Sun Microsystems (once valued at more than $100 billion) only
two weeks after rival IBM failed to close a deal. In the process,
Oracle will acquire Sun’s Java software and Solaris operating
system.

20 Apr

US

Equifax, IBM

IT Hardware contract renewal

IBM has renewed a deal with Equifax to
provide data centre services including mainframe, midrange server,
client service desk, network and business continuity and resiliency
services for Equifax’s operations in the US, Canada, Spain and the
UK.

17 Apr

The Netherlands

Rabobank, Logica

Visual communication contract

Dutch co-operative Rabobank is to launch a
client-facing interactive and multi-touch virtual ‘meeting table’
from IT and business services provider Logica. The MS Surface table
will enable the bank to explain mortgage and loan facilities to its
customers in an “easy to understand, interactive way”.

16 Apr

Canada

National Bank, IBM

IT infrastructure management contract
extension

Canada’s National Bank has agreed a
seven-year extension, worth C$450 million ($368.2 million), to its
IT infrastructure management deal with IBM. The firm will manage
the bank’s information technology infrastructure including
mainframe, server management and end-user services.

16 Apr

Germany

Deutsche Postbank, Atos Origin

Card processing contract extension

Deutsche Postbank has agreed a five-year
extension of its existing card processing contract with Atos
Origin. Atos will also handle the processing of Postbank’s recently
launched Platinum Card, resulting in the vendor processing a total
of around one million cards on behalf of the bank.

15 Apr

Norway

Storebrand Bank, EDB Business Partner

Payment services contract renewal

Norwegian retail bank Storebrand has extended
and expanded its payment services contract with EDB Business
Partner to January 2014, in a deal worth around NOK100 million.

15 Apr

US

StonehamBank, Metavante

Core processing contract renewal

Massachusetts-based co-operative StonehamBank
has extended and expanded its core processing contract with payment
processor Metavante in a multi-year deal.

15 Apr

US

Fifth Third Bank, VeriSign

Mobile banking contract

Fifth Third, a top 15 retail bank in the US,
is to deploy mobile banking alert services via SMS text messaging
from VeriSign Messaging and Mobile Media, extending its m-banking
offering to its more than 1.3 million active online banking
customers.

14 Apr

US

Delta Community Credit Union, Verint

Security contract

Delta Community Credit Union, the US state of
Georgia’s largest credit union, has implemented Verint’s ATM and
teller surveillance and data capture solutions.

14 Apr

The Netherlands

ING, Wincor Nixdorf

ATM contract

ING’s Belgian retail arm is to deploy 1,200
ProConsult transaction terminals from Wincor Nixdorf over the next
two years.

14 Apr

India

Tech Mahindra, Satyam, BT

Acquisition

Indian-based vendor Tech Mahindra is to take
a 51 percent stake in rival Satyam, three months after Satyam’s
chairman and founder, B Ramalinga Raju, admitted the firm’s profits
had been falsely inflated for several years. UK telecommunications
giant BT owns a 31 percent stake in Tech Mahindra.

14 Apr

Malaysia

CIMB Group, HP Malaysia

Thin application contract

CIMB Group and HP Malaysia are rolling out
HP’s Thin Client technology across CIMB Bank and CIMB Islamic
branches nationwide. CIMB Bank is the first bank in Malaysia to
embrace this “innovative and environmental-friendly computing
technology”. HP’s Thin Clients are computing devices that function
as access points to a centralised processing and storage unit.

8 Apr

Vietnam

Vietcombank, Gemalto

Security contract

Digital security specialist Gemalto is to
supply its Ezio Strong Authentication Server, a comprehensive
two-factor authentication solution, to Vietnam’s largest bank,
Vietcombank.

7 Apr

Poland

Alior Bank, FNIS

Core processing contract

Fidelity National Information Services (FNIS)
has implemented its FNIS Profile core processing solution across
more than 100 branches of Poland’s Alior Bank.

7 Apr

Saudi Arabia

Banque Saudi Fransi, NCR

Self-service contract

Saudi Arabia-based Banque Saudi Fransi is to
expand its self-service branch network following trials of its
first completely self-service branches, ‘Fransi Connection’, which
were designed by NCR.

6 Apr

New Zealand

ASB, Serverside

Card personalisation contract

Commonwealth Bank of Australia’s New Zealand
subsidiary, ASB, is to offer a card personalisation service for its
Visa cards using technology from UK-based card customisation
specialist Serverside.

6 Apr

Spain

Bankinter, Quova

Security contract

US-based online security vendor Quova is to
supply Spain’s Bankinter with its IP geolocation solution to detect
potential fraud in its online customers’ banking transactions.

6 Apr

Canada

Coast Capital Savings, Temenos

Core banking contract

Coast Capital Savings, the second-largest
credit union in Canada, is to implement Temenos’ T24 core banking
system to support its retail, commercial and small business banking
operations in 51 branches, servicing approximately 1.8 million
accounts and more than 400,000 customers.

3 Apr

US

FNIS, Metavante

Acquisition

Fidelity National Information Services (FNIS)
is to acquire banking and payments technology supplier Metavante,
to create a $10-billion company.

1 Apr

US

First Data, INSIDE Contactless

Contactless contract

First Data has teamed up with French-based
chip manufacturer INSIDE Contactless in a three-year deal to
develop contactless payment stickers, which First Data will market
as GO-Tag products.

31 Mar

US

Fifth Third Bank, Advent International

Payment processing unit majority stake
sale

Private equity firm Advent International is
to acquire a 51 percent stake in the processing business of US
banking group Fifth Third through the establishment of a joint
venture that values the new company at approximately $2.35
billion.

30 Mar

Source: RBI