Fidelity and Metavante contend they will be able to generate significant savings by joining forces as technology spending has been pushed to the back burner at many banks, reports CardLine sister publication American Banker. The Jacksonville, Fla.-based processor announced a $2.94 billion stock deal for Milwaukee-based Metavante Technologies Inc. yesterday (CardLine, 4/1). Because the two companies have similar product lines, cutting costs was a big factor in their decision to get together. Executives say they anticipate $260 million of "cost synergies" through consolidating duplicated operations and streamlining product offerings, with $210 million of the savings to be achieved by the end of next year. "Our intention is not to cut cores or core platforms," but rather "the ancillary products around them," Michael D. Hayford, Metavante's chief operating officer and a senior executive vice president, said yesterday during a conference call with analysts. "Those relationships are so strategic for the ability to cross-sell. We don't want to jeopardize any of those." Bankers increasingly will demand integrated data processing systems from well-integrated vendors, says Christine Barry, a research director at Aite Group LLC, a Boston-based consulting firm. "It's almost impossible to deal with multiple vendors because of all the information you have to provide to regulators," she says. "The fewer vendors you deal with, the lower the cost."
Authoritative analysis and perspective for every segment of the payments industry
Authoritative analysis and perspective for every segment of the industry
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