The financial services technology company is migrating clients to one of the two networks over the next few quarters “because we do not need to have two,” Takis Georgakopoulos told an audience at Citi’s annual FinTech conference this week.
“They’re almost interchangeable in terms of their capabilities,” the chief executive said, adding that for the “empty network, we are going to look at if there is an alternative network structure that makes sense.”
Earlier this year, the Wall Street Journal reported that several of the country’s biggest banks—JPMorgan Chase, Wells Fargo, Bank of America and PNC—had held preliminary discussions about buying one of Fiserv’s debit networks.
“The strategic logic is clear,” PYMNTS wrote at the time. “Capital One’s $50.6 billion purchase of Discover gave it ownership of a card network, allowing it to operate closer to the transaction flow and reduce reliance on outside networks. That deal appears to have sharpened interest among other banks in whether network ownership could change the economics of debit.”
Georgakopoulos joined Fiserv in June, when former chief executive Mike Lyons departed to become CEO of Truist Financial.
During his tenure, Georgakopoulos has begun a review of the company’s assets. He told the audience at the Citi conference that this review also found more than a dozen small businesses providing “either no growth and/or no profitability” that Fiserv will shut down.
“Obviously, we need to be careful with customer impact, etc., and make sure we have the right solution for clients,” he added. “But these are things that are dragging down growth, dragging down profitability, and are taking away from the focus that the company needs to have to deliver on its core priorities.”
Fiserv reported its quarterly earnings last week, and outlined a $1 billion cost-cutting strategy during its earnings call.
“Fiserv is betting that the next competitive advantage in payments won’t come from processing more transactions,” PYMNTS wrote. “It will come from needing fewer people, systems and dollars to process the ones it already handles.”
During the call, Georgakopoulos described a plan to consolidate overlapping technology platforms, phase out smaller products and embed artificial intelligence (AI) throughout operations and software development.
“As we simplify and focus our organization with an AI-everywhere mindset, we have increasing confidence that we can drive greater efficiency while investing in innovation and delivering differentiated client value,” he said.
