A leading provider of financial services technology solutions, Fiserv Inc. (FISV - Analyst Report) recently unveiled the FATCA Manager, a monitoring and control solution, which can be strategically used by financial institutions to comply with the Foreign Account Tax Compliance Act (FATCA).
FATCA is based on the Financial Crime Risk Management platform (FCRM) developed by Fiserv. The new solution will use the detection, workflow and reporting techniques to effectively meet compliance directives. By deploying the solution, financial institutions will be able to make a single investment to counter money laundering, fraud and global tax evasion issues.
FATCA is basically aimed at finding tax evaders, especially the ones with offshore accounts and assets. Moreover foreign financial institutions can also keep a tab of financial accounts held by U.S. taxpayers or other foreign bodies, wherein U.S. taxpayers hold ownership interest. Any failure on part of the financial institutions to report violations of the Internal Revenue Service (IRS) control guidelines may lead to heavy penalties. This is where FATCA can help companies.
FATCA Manager automates the process of many U.S. indicia and entity classification checks, which in turn help in identifying exceptions and monitoring for changes. We believe this solution would be specifically helpful for different financial institutions and help them to comply with different rules and regulations of the tax authority and the IRS.
Fiserv is coming out with effective tax and financial services solutions, which have been widely accepted. The company has in fact signed 98 new clients, which helped it to expand its total number of clients for the Mobility solution to 1,600 at the end of the second quarter.
This apart, the company is also witnessing an increase in demand for the Popmoney solution, which continues to remain strong as Fiserv signed 64 new institutions in the quarter. During the quarter, Fiserv signed 71 electronic bill payment clients and 38 debit processing clients.
We believe that various contract wins and accretive acquisitions will help Fiserv to fight stiff competition from Fidelity (FIS - Analyst Report), Mastercard (MA - Analyst Report) and Global Payments (GPN - Snapshot Report) in the near term.
On the other hand, deterioration in the global macroeconomic environment, reduction in spending by banking and financial service clients and consolidation in this space are working against the company.
Currently, Fiserv has a Zacks Rank #3 (Hold).