Magazine article American Banker

Fiserv a Buyer as Banks Retreat from Processing

Magazine article American Banker

Fiserv a Buyer as Banks Retreat from Processing

Article excerpt

Byline: Steve Bills

Fiserv Inc. is continuing to expand its core processing and transaction services in areas where banks are pulling back.

The Brookfield, Wis., financial technology company announced Tuesday that it has agreed to buy the service bureau i_Tech Corp. from First Interstate BancSystem Inc. in Billings, Mont.

Fiserv said it expects the $40 million transaction to close Dec. 31.

i_Tech Corp. performs hosted core-account processing services for for First Interstate and 65 other clients, using Fiserv's ITI Premier application, and item processing, electronic funds transfer and other services for 150 financial companies, operating a fleet of more than 750 automated teller machines in 10 states.

Frank Smeal, the head of Fiserv ITI outsourcing, said the Billings data center is to become the seventh in Fiserv's nationwide network.

As part of the deal, he said, the company has signed a long-term contract with First Interstate.

This is Fiserv's second deal in six weeks involving a banking company shedding a service bureau. In early November, Fiserv bought Data Center in Grapevine, Tex., another licensee and reseller of the Fiserv ITI Premier system, from Banco Bilbao Vizcaya Argentaria SA's U.S. unit, BBVA Compass.

Mike Young, the president of Fiserv's bank and thrift division, said at the time that the purchase "broadens our distribution of the Premier product and gives us direct relationships with the clients."

Mr. Smeal said that, though Fiserv sells both outsourced core services and packaged software, the trend is more toward outsourcing these days.

He would not predict whether Fiserv would buy other such outsourcing operations but said, "we certainly hope that's the case."

Lyle Knight, First Interstate's president and chief executive officer, called the $6.5 billion-asset banking company's decision to sell i_Tech a strategic one. …

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