Fidelity National Information Services Inc. (FIS): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Headquartered in Jacksonville, Fla., Fidelity National Information Services Inc. FIS is a leading provider of banking and payments technology solutions, processing services and information-based services to the financial services industry. The company came into existence following the merger with Certegy Inc., a provider of credit card, debit card, other transaction processing and check risk management services to financial institutions in 2006.

Fidelity boasts a strong global presence, offering more than 300 solutions to 14,000 financial institutions in over 110 countries. The company earned revenues of $6.07 billion in 2013. Fidelity operates through these segments The Financial Solutions Group FSG, The Payment Solutions Group (PSG) and The International Solutions Group ISG. The following graph shows the revenue contribution by each unit in 2013.

FSG provides core processing services including cash management and wealth management operations and customer channel treasury services. It also offers ancillary services such as branch automation, back office support systems and compliance support to banks, credit unions, automotive financial companies, commercial lenders, independent community and savings institutions. FSG customers typically adhere to multi-year contracts that provide a stable, recurring revenue base and opportunities for cross-selling additional financial and payment offerings.

PSG offers software and services for electronic fund transfer EFT, card processing, item processing, bill payment and government and healthcare payments processing. The company also offers payment processing and risk management services through this segment. Customers include major banks and financial institutions, such as Bank of America, Citibank, J.P. Morgan Chase, Wells Fargo and other well known institutions, credit unions, automotive financial companies, commercial lenders, independent community and savings institutions. The company has approximately 4,000 debit, credit and pre-paid card issuers as customers.

ISG provides core banking applications and financial and payment processing software and services, including outsourced card issuer services and customer support, item processing, retail point-of-sale check authorization services and outsourced core bank processing arrangements, application management, software licensing and maintenance, facilities management and consulting services.

Fiserv, Inc. and Jack Henry & Associates are the closest rivals of Fidelity in the financial and payment solutions market. Fidelity also faces significant competition from the likes of IBM, Oracle, Accenture, Temenos, Infosys, Visa and MasterCard, as well as from the in-house IT departments of financial institutions, banks and retailers.