FIS posted an uptick in its banking solutions demand in the first quarter following the collapse of Silicon Valley Bank.  

The financial services technology provider remains committed to banking services through turbulent or uncertain times, Chief Executive Stephanie Ferris said during Thursday’s earnings call.

“As banks go through whatever volatility they’re dealing with, [FIS is] very important to making sure that all those deposit accounts get opened, all those money market accounts get opened, and that our systems are very stable and up and running,” she said. “We participate hand-in-glove with our financial institutions, no matter what’s going on.” 

WHY IT MATTERS: The Jacksonville, Fla.-based FIS’ banking solutions revenue climbed 2% year over year to $1.6 billion, Ferris said, noting that “technology processing spend across the banking industry has been historically resilient during prior challenging cycles of uncertainty.” 

Banking solutions revenue saw a 2% increase sequentially, as well, with Ferris expecting to see consistent growth quarterly through the rest of the year, she said during the call. 

BY THE NUMBERS: FIS reported for Q1: 

• Total revenue increased 1% YoY to $3.5 billion; and 
• Merchant solutions revenue decreased 1% YoY to $1.1 billion. 

NOTEWORTHY: In addition to helping meet banking solutions demand, FIS is preparing customers for the July launch of FedNow, a real-time payments rail being deployed by the Federal Reserve, according to the earnings presentation. 

The Fed launched a formal certification process in April to test operational readiness of banks using FedNow, according to the government entities’ website. 

FIS is working with its bank clients to ensure they are prepared for FedNow, Ferris added. Its bank clients include $805 billion Bank of Montreal and $455 billion Capital One, among others, according to the company’s website. 

FIS is focused on providing FedNow payment capabilities to its clients, like fellow core provider Fiserv, which is aiming to prepare its own bank clients for the July launch of the new payment rail. 

FLASHBACK: FIS acquired payment processing company WorldPay in a $43 billion purchase in February 2019, according to FIS’ website. 

Now, FIS is working to spin off WorldPay into a stand-alone company and expects WorldPay to be operating separately by early 2024. 

Charles Drucker was named chief executive of the revamped WorldPay, previously having served as CEO of the company from its launch in 2018 until its sale to FIS, according to the company website. While WorldPay will operate in a standalone capacity, FIS will remain a partner after the move is complete, Ferris said. 

“WorldPay will continue to be a distribution partner for us, and we’re in the process of building out a commercial partnership arrangement with them,” Ferris said during the call. 

THE BOTTOM LINE: The company’s Q1 moves are a part of its Future Forward initiative, aimed at reducing expenditures and cutting programs that were not profitable for the core provider, Ferris said. 

FIS is reducing “capital expenditures, going through the portfolio, rationalizing projects based on returns,and prioritizing projects around delivering products and services out to customers, as well as driving automation into a lot of our processes to improve client experience,” she said.

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