Recently, Fiserv, Inc. (FISV - Analyst Report) entered into a multi-year contract with Trustmark National Bank, a unit of Trustmark Corporation (TRMK - Snapshot Report). Per the agreement, the company’s check capture and processing service solution, Central Source Capture will now be deployed by the bank for upgrading its check processing structure and improving its efficacy.
With the agreement, the bank has extended its long-term association with Fiserv. The bank has selected the company given its highly developed platform with flexible, scalable and integrated financial services solutions.
The company has taken the complete responsibility of improving Trustmark’s entire banking process so that it works much more systematically. Initially, the company was engaged in centralizing the database of the bank for easy branch capture and introducing image-enabled ATMs across all units of the bank. Now, with this deal, the company will be also involved in augmenting Trustmark’s check capture system and identification process.
Additionally, with this association the bank will also gain access to a range of Fiserv’s service offerings including ATM Source Capture for easy check deposits at ATMs, Branch Source Capture, Merchant Source Capture, RP/SMS to reconcile entire account system and the Fiserv PEP+ Automated Clearing House services.
The company expressed its ebullience on the contract by stating that its user-friendly approach would surely make the entire banking system much easier, more secure and risk free for Trustmark. Fiserv’s banking solution platform has been particularly designed for the banks and financial institutions, which would use it to ameliorate its service standards and cater to growth potentials in the market.
Various strategic contract wins hold future pledge for Fiserv. The company confirmed winning a bunch of contracts from various financial institutions during 2012. Recently, the company received a contract from Caja Morelia Valladolid for its Signature bank portal. We believe that these agreements are likely to heighten the company’s market share in future.
However, the company’s financial segment faces a huge competition from various big companies including Mastercard Incorporated (MA - Analyst Report) and Fidelity National Information Services, Inc. (FIS - Analyst Report). Fidelity recently received a multi-year contract from BMO Harris Bank for improving its banking process. Hence, the company has to be extra cautious of competitive strides in the industry.
The current Zacks Consensus Estimates for Fiserv, Inc. are $1.42 and $5.17 for the fourth quarter of 2012 and for 2012, respectively. The estimates represent a year-over-year growth of 12.14% for the third quarter and 12.89% for 2012. We currently have a long-term Neutral recommendation for Fiserv. The stock carries a Zacks #3 Rank, which translates into a short-term Hold rating.