Tech Firm Consolidations Driven by Due Diligence, Penny Pinching
Big banking tech companies recently have been hungrily gobbling up smaller companies and the question is, Will this consolidation continue? The other question, Is this good, or bad, for credit unions?
Recent acquisitions include Brookfield, Wis.-based Fiserv swallowing Glastonbury, Conn.-based Open Solutions Inc. for around $1 billion, mainly debt assumption; Jacksonville, Fla.-based FIS digested Larkspur, Calif. based-mFoundry for about $120 million; and Naples, Fla.-based ACI Worldwide bought Chantilly, Va.-based Online Resources Corp. for about $263 million.
“With this deal, FIS significantly ups its mobile offering,” said Aite’s Barry, who stressed that a motivator for this acquisition is that “nowadays financial institutions are looking for deals,” typically from their core providers who are pressured to throw in at a discount or even free of charge services such as mobile banking.
That is putting downward revenue pressure on standalone technology providers, such as mFoundry on its own, and it also may have a negative impact on innovation, said some experts who indicated that free is not a price point that will sustain significant product advancement.