To deconvert!
https://kstackpod.substack.com/p/the-real-fiserv-fight-isnt-early
4 replies (most recent on top)
@ba I like how your link from 2024 someone said in a comment “ One day some poor slob of a person is going to take the CEO job and is going to have a lot of cleaning up to do.” LOL prescient.
Hold on — what deconversions? are we supposed to be moving clients to CoreAdvance by 2028? We’re selling CA like hot cakes.Fiserv said “Just sign here, we’ll have that modernized in jiffy” (borrowed from bluey) We’ve got an all-star team lined up to make that happen. I also stumbled on his gold 2024 layoff link below and figured nothing’s changed since then — if anything, it’s gotten worse.
https://www.thelayoff.com/t/1tFQuScK
He wasn't cynical enough.
Fiserv is counting on deconversions to create the illusion of growth. By controlling how many clients are leaving in a year, Fiserv can show financial growth even when the number of clients is shrinking.
Interesting article. Deconversion risk as a real contractual moat...yep 100%. The Tier 1 vs. Tier 2 framework is useful and agree the complaint about service deterioration cannot simply be dismissed.
"Every credit union on Fiserv right now is, whether they admit it or not, considering deconversion." I don't think this is true and even if that was true, there are bound to be clients who are reasonably convinced that competitors are no better. And a stock price decline does not establish service decline either. Stock prices incorporate expectations concerning a lot of different things and are not direct measures of customer service.
This guy thinks that every dollar of retained recurring revenue is a matter of survival but again this company is nowhere near insolvency nor is there anythihng in the financials that suggest Fiserv is unable to tolerate ordinary client churn.
And why is agressive deconversion pricing a defensive desperation tactic? Fiserv has ALWAYS had an economic incentive to maximize switching costs even when this company was finanically healthy. Long contracts, bundled ancillary products, proprietary interfaces, data extraction fees and deconversion charges are conventional incumbent vendor strategies. This is true for every company like ours.
Core conversions take years and a lot of boards are risk averse. And if you look at the alternatives they have their own deficiencies and problems. The greater danger IMO is a slow erosion of renewal rates and pricing power.