Payments and financial services technology company Fiserv is looking to expand efforts in embedded finance and cloud services to meet increased demand for digital banking products. 

The high demand among its financial institution customers is leading Fiserv to raise its outlook for the full year, Frank Bisignano, president and chief executive, said on the company’s second-quarter earnings call today.

“We now expect 2023 organic revenue growth in the range of 9% to 11%, up from 8% to 9%,” he said. 

Fiserv works with banking institutions such as Metropolitan Commercial Bank, Wings Financial Credit Union, Citigroup and Fifth Third Bank to deliver a suite of services ranging from back-end automation and cloud services to digital banking interface, according to the company’s website. 

The migration of its clients onto a digital banking platform has seen “a doubling of customer adoption record in the first year, which means greater card usage, reduced call center activity and better security is drawing new clients to digital banking solutions,” Bisignano said. 

BY THE NUMBERS: In Q2, Fiserv reported; 

• Adjusted revenue increased by 6% year over year to $4.5 billion; 
• Payments revenue increased by 8% YoY to $1.6 billion;  
• Fintech revenue decreased by 2% YoY to $784 million; and 
• Zelle transactions increased by 44% YoY while Fiserv recorded a 29% YoY increase in Zelle customers. 

NOTEWORTHY: Fiserv is looking to expand its embedded finance strategy offering as its clients “want to offer banking services to their customers,” Bisignano said. 

“Their goal is typically to provide more purchasing power and payment flexibility to their customers while creating deeper relationships,” and Fiserv has the capability to add “many payment and banking solutions that merchants want to offer,” he said. 

Payments revenue from Fiserv’s point-of-sale product, Clover, increased by 9% YoY to $2 billion while its gross payment volume jumped to $267 billion, up 15% YoY, according to the earnings presentation. 

STATE OF PLAY: The Brookfield, Wis.-based Fiserv is also seeing more demand for its cloud services, according to Bisignano. In 2022, Fiserv acquired Finxact, an SaaS provider for financial institutions, for $650 million, according to an April 2022 release.  

The acquisition is helping Fiserv provide cloud-based application services to clients and reduce time to market for digital banking applications, Bisignano said. 

Fiserv is also live on FedNow and is looking to help its customers access the real-time payments channel released by the Federal Reserve last week. 

FUTURE LOOK: The company sees a growth opportunity in the payments channel, specifically in the commercial and bill payments segment, Bisignano said.

MARKET REACTION: Fiserv stocks were down by 2.08% and were trading at $127.35 on Wednesday market closing.  

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