Magazine article American Banker

A Week of Milestones for Security First

Magazine article American Banker

A Week of Milestones for Security First

Article excerpt

By MARJANOVIC, STEVEN Security First Technologies reached a pinnacle last week, and not just in its stock price. It got new funding, new customers, and some of those ever important strategic allies. The Atlanta company, known as S1, announced a marketing alliance to promote its software with Hewlett-Packard Co. hardware. The relationship includes a $10 million equity investment. S1 also entered into a development deal with Andersen Consulting, which says it has close ties to 70% of the world's financial institutions and 12,500 consultants ready to recommend the vendor. Security First also landed its largest software licensing deal to date: $50 million over five years from Royal Bank of Canada, which said it hopes to offer Internet banking to as many as 40% of its 10 million retail accounts by the end of 2004. S1 rose on the stock market 36% last week, to $65.625 a share.Its most recent low was $9.25, on Oct. 8. "From a stock and from a company perspective, this is a long way from where they were two years ago when they were struggling to get new products out," said Stephen C. Franco, analyst at Piper Jaffray Inc., Minneapolis. "They have staying power, they have financing, they have the brand name, and a customer base." Royal Bank of Canada - which last year bought the bank, Security First Network Bank, that was originally affiliated with S1-expects to be offering full-service Internet banking within 18 months. The Toronto bank's deal includes incentive warrants to buy up to 400,000 shares. For example, for every one million Canadian customers that become Internet users, Royal will buy 100,000 shares of Security First at $60 each. "This is phenomenal," Mr. Franco said. "There is no downside. If they miss the mark, there is no penalty. They just don't get the warrant." "We looked closely at other alternatives," said Martin Lippert, Royal Bank's vice chairman and chief information officer, "and believe that S1's experience and technology will enable us to meet the anticipated high customer volumes and increased demand for integrated financial products and services. …

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