FIS + mFoundry: A Case of Dancing With the One Who Brung You
The news today that FIS has purchased the 78% share of mFoundry that it didn’t already own should come as no surprise. MFoundry was a startup with investors who one day expected to see a payoff. By virtue of previously buying a 22% stake in mFoundry, FIS essentially bought a ticket to the prom and had dibs on the first dance and the good-night kiss.
FIS’ initial stake in the company enabled FIS to see the value of teaming with this innovative mobile player, then moving to owning it outright. MFoundry has a strong management team and a record of innovation, notably with the Starbucks installation. Buying out mFoundry enables FIS to own the goods, while providing mFoundry with the resources to do more, do it faster, scale out to a larger range of FIs, work with more merchants, and so forth.
Fiserv already gobbled up its mobile partner (M-Com), and Monitise snatched up Clairmail. It is a time of inevitable, necessary, and productive consolidation in the industry — and not just in mobile. (See ACI Worldwide’s acquisition of Online Resources today, and Fiserv’s purchase of Open Solutions earlier this month.)
Consolidation in the vendor space reflects consolidation among banks. Larger banks are acquiring smaller banks or outright stealing their best customers by rolling out advanced capabilities in mobile, online and catering to changing consumer expectations according to what we call the Customer-Driven Architecture™—Javelin’s 7-phase road map based on consumers and business customers increasingly seeking real-time, always on, transparent capabilities, etc. Expect this trend to continue. It’s essential in order for forward-focused community banks and credit unions to survive.
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