A giant will roam the fintech land as Fiserv will acquire First Data in an all-stock transaction of $22 billion, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

With the combined power, Fiserv will be able to offer a range of payments and financial services, including account processing and digital banking solutions; card issuer processing and network services; e-commerce; integrated payments; and the Clover cloud-based point-of-sale solution.

Jeffery Yabuki, president and CEO of Fiserv, said: “We admire First Data for its excellence in merchant acquiring and global issuing services, and the tremendous progress they have made under Frank’s [Bisignano, CEO] leadership.”

Some deals from last year for First Data include Ellie Mae, Mastercard and SIA.

As an example of how they will link up, Fiserv says First Data’s digital merchant account enrollment capabilities can be integrated into its digital banking solutions.

The new entity expects to invest an incremental $500 million over five years. Fiserv reckons growth will come from areas such as bank merchant services and Clover, credit processing, and additional biller services.

The program, when up and running, will focus on a series of new and existing technologies, including merchant solutions, digital enablement, risk management, and data-focused solutions.

The new company expects to generate free cash flow exceeding $4 billion in the third year following close, and generate $900 million of run-rate cost savings, “driven primarily by the elimination of duplicative corporate structures.” The latter of course means job cuts. Firms always say it so coldly.

Fiserv intends to refinance the $17 billion of debt that First Data is expected to have at the time of closing, and has entered into a committed bridge financing arrangement in connection with the transaction.

Yabuki will serve as CEO and chairman of the board of directors of the combined company. Bisignano will assume the role of president and chief operating officer, and will serve as director of the board of the combined company.

The transaction, to close during the second half of 2019, is subject to customary closing conditions and regulatory approvals, including the approval of shareholders of both companies. The transaction is not subject to any financing conditions.

Founded in 1984 and headquartered in Brookfield, Wisconsin, Fiserv demonstrated its Commercial Center: Security solution – partnership with Samsung SDS – at FinovateSpring 2018. Earlier this month, the company announced signing a trio of new bank partners, bringing Fiserv’s total number of new bank clients to more than 80 in the past two years.

Fiserv is living the fintech dream as more than 80 of its bank clients have completed a migration to outsourced core processing in the past 24 months.

This heightened state of happiness is set to continue as the company says nearly 60 more are scheduled to make the move in 2019, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

Three banks in the US have been wheeled out to offer some praise.

“After we moved to outsourced core processing, we asked ourselves what other services we should outsource to ensure customer information was held in a secure data centre. This led us to choose hosted infrastructure as a service and managed services from Fiserv,” said Yvette Hamm, vice-president, information security officer, First State Bank of Uvalde in Texas.

Robert Palmer, president and CEO of Missouri-based Bloomsdale Bank, is addicted to outsourcing love as the decision to move was due in part to the difficulty of finding qualified staff to manage technology in-house.

While for JD Bank in Louisiana, it considered doing it for more than two years before making the decision.

Bavo Gall, JD Bank’s EVP and chief information officer, said: “By outsourcing with Fiserv, we have maintained the flexibility to do what needs to get done.”

The bank moved its core processing, item processing and online banking systems to an outsourced environment over a single weekend in late 2017.

In other news, last week, Mi Bank in Michigan announced it was set to debut early this year. The new financial institution says it will use technology from Fiserv, including the DNA core banking system, to power its launch.

Headquartered in Brookfield, Wisconsin and founded in 1984, Fiserv demonstrated its Commercial Center: Security platform – in partnership with Samsung SDS – at FinovateFall 2017.

Mi BANK, Michigan’s first de novo bank in a decade, is set to debut early this year. The new financial institution announced today that it will leverage technology and expertise from Fiserv to power its launch.

“Local businesses like to bank with local financial institutions that understand the dynamics and challenges they face,” Mi BANK founder, chairman, and CEO Rob Farr explained. “Fiserv gives us the technology foundation we need and has demonstrated flexibility in accommodating us as a new bank looking to address a gap in our market.”

Farr and his team will benefit from their previous experience working with Fiserv, as well as from Fiserv’s history of supporting other de novo banks. Upon launch, Mi BANK will offer a full suite of banking solutions including core account processing, commercial lending, digital banking, RDC, wire transfers, and 24-hour account opening. In addition to technology implementation (what Farr called “the heavy lifting”), Fiserv will train Mi BANK’s internal staff to ensure they are able to make the most of the new technology.

“By taking a tech-forward approach, Mi BANK is ready to offer the experience and capabilities that businesses expect from their financial provider,” Todd Horvath, president of Bank Solutions for Fiserv, said.”Fiserv offers a springboard to growth for the bank as they prepare to serve customers for years to come.”

Located 25 miles outside of Detroit in Bloomfield Township, Mi BANK is among the more recent de novo banks to be approved by the FDIC. And if state regulators follow-through, Mi BANK will be the first bank to open in the state since the Great Recession. The bank will cater to small and medium-sized commercial businesses, and seeks to bring what it calls “community banking principles” to the world of SME banking.

“When we open the doors at Mi BANK we will have in place experienced bankers who understand the importance of responding quickly and effectively to each of our customer’s distinctive needs,” Farr (pictured) said in a press release announcing the FDIC approval in October.  “We’re a local organization and we understand the unique dynamics and challenges of Michigan companies.”

Farr served as president and CEO of Birmingham Bloomfield Bancshares (Michigan) from 2006 to 2017, when the firm was sold. An alum of Michigan State University, Farr worked in private banking for Michigan National Bank, Old Kent/Fifth Third, and TCF Bank.

De novo banks and credit unions are newly-chartered FIs – not purchased as an acquisition – that have been in operation for five years or less. Fiserv has worked with more than 400 de novo banks and CUs since 2000, providing banking platforms, e-commerce solutions, and payment technologies. Earlier this spring, Fiserv announced that its core processing platform had been selected by $455 million, R Bank of Central Texas, which opened as a de novo bank in 2009.

News of Fiserv’s partnership with Mi BANK comes less than a month after the financial technology services company announced teaming up with three U.S.-based credit unions: Ideal Credit Union and TopLine Federal Credit Union of Minnesota, and Dakota West Credit Union of North Dakota.

Above: Fiserv’s Scott Graf, Samsung SDS America’s Richard Lobovsky, and Fiserv’s Dennis Wang demonstrating the integration of new biometric authentication solutions within a digital banking platform.

Other recent headlines for Fiserv include teaming up with QuotePro in November to accelerate credit for cash payments at self-serve kiosks, and finalizing the acquisition of Elan Financial Services’ debit processing solutions. Also last fall, Fiserv forged partnerships with U.K.-based Co-operative Bank and New Jersey-based Bogota Savings Bank ($650 million in assets).

Fiserv made its first Finovate appearance in 2008, demonstrating technology that leveraged social media to help banks and credit unions attract, engage, and retain customers and members. More recently, at FinovateSpring earlier this year, the company partnered with Samsung SDS, to combine the South Korean technology firm’s biometric authentication and collaboration solutions into Fiserv’s Commercial Center: Security solution.

Founded in 1984, Fiserv is based in Brookfield, Wisconsin. The company has 24,000 associates serving more than 12,000 clients in 80+ countries around the world. With a market capitalization of $29 billion, the company trades on the NASDAQ under the ticker symbol “FISV.” Jeffrey W. Yabuki is President, CEO, and Director.

Ideal Credit Union, TopLine Federal Credit Union and Dakota West Credit Union have each selected Fiserv to modernize their systems and services, reports Henry Vilar of Fintech Futures (Finovate’s sister publication).

The three Midwestern credit unions will use the DNA account processing platform from Fiserv to streamline workflows and eliminate manual processes, as well as improve their integration processes and reporting.

Minnesota-based Ideal Credit Union said they selected DNA largely for its loan servicing capabilities. The $730 million asset credit union also cited the ability of DNA to integrate with other applications, and the strong suite of customer relationship management (CRM) and marketing tools from Fiserv that will help the institution better understand and serve members’ needs.

“The open architecture of DNA and its enhanced APIs enable us to maintain deep integration with our preferred systems while delivering an exceptional experience to our members,” said Brian Sherrick, president and CEO, Ideal Credit Union.

Minnesota-based TopLine Federal Credit Union, with $460 million in assets, says it was was attracted to the person-centric design of DNA along with CRM, multi-channel marketing and other tools from Fiserv.

Dakota West Credit Union, mainly doing agricultural and energy industry lending, recognized its need for a new technology platform when assets increased by 150% from 2010 to 2015 as the local petroleum industry grew.

Ideal Credit Union will be running DNA in-house, while TopLine Federal Credit Union and Dakota West Credit Union will be running DNA from a Fiserv data center.

Founded in 1984 and headquartered in Brookfield, Wisconsin, Fiserv demonstrated its Fiserv Commercial Center: Security in partnership with Samsung SDS at FinovateSpring 2018. With more than 12,000 clients worldwide and revenues of $5.7 billion in 2017, the company trades on the NASDAQ under the ticker “FISV” and has a market capitalization of $29 billion.

Fiserv announced that UK-based Co-operative Bank will implement its FinKit for Open Banking, “to provide more flexibility for customers to choose how they conduct their everyday banking in relation to the European Union’s Second Payment Services Directive (PSD2)”, reports Tanya Andreasyan of Fintech Futures (Finovate’s sister publication).

The two parties have a long-standing relationship.

The cloud-based managed service delivery model of FinKit for Open Banking appealed to the bank, Fiserv explained, because it will help facilitate the many aspects of open banking compliance, from secure customer authentication to management of trusted third parties (TPPs).

FinKit for Open Banking includes access to pre-built APIs and facilitates ongoing compliance through API version control and publishing. This positions the bank to respond efficiently and effectively to the rapid pace of regulatory and industry change, the vendor explains.

FinKit originates from a UK-based mobile paytech provider, Monitise, which was acquired by Fiserv last year.

“Open banking is an area of continual change, and Co-operative Bank is positioned to move ahead of the curve,” noted Lee Cameron, managing director, EMEA, Fiserv (and formerly CEO of Monitise).

Fiserv was founded in 1984 and is headquartered in Brookfield, Wisconsin. The company most recently demonstrated its technology at FinovateSpring 2018, partnering with Samsung SDS America to show new biometric authentication features for its digital banking experience, Fiserv Commercial Center.

With more than 12,000 clients and more than 24,000 associates around the world, Fiserv trades on the NASDAQ under the ticker “FISV”. The firm has a market capitalization of $32 billion. Jeffery Yabuki is president and CEO.