Magazine article American Banker

D+H's Fundtech Deal Fueled by Global Push, Technology Needs

Magazine article American Banker

D+H's Fundtech Deal Fueled by Global Push, Technology Needs

Article excerpt

Byline: Evan Schuman

When Toronto's Davis and Henderson agreed to spend almost $1.3 billion for Fundtech--the Canadian company's ninth and largest acquisition--it addressed its need not merely for global diversification, but also for a much more streamlined payments technology strategy.

The acquisition, announced March 30, was motivated by two trends. The rapid movement toward various new payment approaches (primarily EMV and mobile in the U.S.) was an important factor, but D+H executives argued that this shift is overshadowed by structural changes in banking.

The company painted an urgent picture in the materials it submitted to Canadian securities officials: "The consolidation in banking has led to multiple, disparate and often outdated systems. This complicates the adoption and integration of new payment origination channels. Unless addressed, (this) forces higher operating expenses for banks and limits opportunities to expand scale and efficiency."

Banks "need to move in a much more effective and efficient way," said Carrie Russell, D+H's chief marketing officer, in an interview. "The infrastructure really needs to be optimized."

With each acquisition, D+H becomes more global and thus more sensitive to the differing needs of each region in which it operates. D+H became a U.S. payments provider with its $1.2 billion purchase of Harland Financial Solutions in 2013. Prior to the Harland deal, D+H received just eight percent of its total revenue from the U. …

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