While the fintech landscape is buzzing with innovative start-ups and the surge in personalized banking solutions, there is no scarcity of incumbent players either. The concept of bespoke banking has been embraced by major players, both through their in-house innovations and strategic partnerships.
Yet, it is not an everyday occurrence to witness an established player from a different vertical confidently stepping into the fintech realm. Amdocs, a software juggernaut in the telecommunications sector, is looking to do exactly this. Driven by a history of success and the motivation to extend its footprint, Amdocs is ready to shake the fintech landscape.
Amdocs: A Familiar Name in a New Arena
Primarily a telecommunications software company, Amdocs has a vision to diversify its services into the financial sector. While the company acknowledges the competition in the fintech industry, it also sees an opportunity to apply the lessons learned from decades of experience in the telco space to their new venture.
Amdocs has developed a robust strategy for banks in the midmarket segment, leveraging its extensive experience in cloud-based systems like Azure. Having witnessed numerous transformations go awry, the company aims to prevent such missteps and bring superior technological innovations to financial institutions.
We had the chance to sit down with Zur Yahalom, SVP and head of financial services for Amdocs in the Americas. We delved into their strategic decision to venture into fintech, their differentiators in the market, and their aspirations in this new arena.
Navigating From Telco to Fintech
During internal discussions about the company’s future, executives at Amdocs identified the need for diversification. The company still held a strong foothold in the telco industry, which remained its core. However, it was evident that the rate of growth in the telco sector wasn’t as explosive as it was a decade ago. Thus, the decision to expand into financial services was taken, not as a replacement for telco, but as an additional venture.
Unlocking Value in Financial Services
Amdocs brings a suite of products and services aimed at guiding regulated enterprises through their digital transformations and customer experiences. The company claims to possess the ability to assist organizations in designing their customer engagement through deep customer research. Following the design phase, they implement the strategies on different platforms – from mobile apps to cloud infrastructure. This approach has been successful for them in the telco sector and has the potential to bring the same results in financial services.
Key offerings from Amdocs in the fintech market are product management, pricing, and billing. They are aimed at helping firms personalize offers and bundle different products to present “the right product to the right customer at the right time”. Companies like ABN Amro, Bank Hapoalim, and UnionDigital Bank are already utilizing Amdocs’ offerings.
Facing Challenges as a New Entrant
Despite being a well-established company, Amdocs is relatively unknown in the financial services sector. Yahalom admits, “Building a reputation and brand recognition is our number one challenge. We need to ensure people are aware of our capabilities.”
To overcome these challenges, Amdocs plans to focus on personalization – of product offerings and customer interactions. Yahalom believes that the personalization domain has vast potential across the industry, and Amdocs aspires to be a pioneer in helping financial institutions advance to that stage of evolution.
Venturing into M&A Activity
Given its size and financial muscle, it would be logical for Amdocs to facilitate its move into financial services through potential mergers and acquisitions. When posed with this prospect, Yahalom responded, “Amdocs typically acquires a few companies per year. We’re constantly evaluating market opportunities to expand our offerings and brand recognition.”
Competing with the Start-ups
In the realm of personalization and customization, there are numerous start-ups already catering to financial services firms. Amdocs plans to differentiate itself by leveraging its proven technology, which has been successful with large telecommunication companies worldwide. The company is confident in its technology and expertise to compete and thrive in the financial services market.
As an example, Yahalom highlights the concept of “family-first banking”, an approach that promotes banking from a family structure perspective, rather than focusing solely on individuals. This strategy involves introducing children to the banking world at the right time, which would increase their chances of becoming lifelong customers.
The Impact on Fintech Marketers
The emergence of a telecommunications giant like Amdocs in the fintech space brings about a plethora of implications for fintech marketers. Here are some ways in which the move impacts them:
- Increased Competition: Fintech marketers must gear up for a competitive environment as a seasoned player like Amdocs brings its technology and customer experience expertise to the financial services sector. Amdocs’ move will likely force fintech companies to raise their game, leading to greater innovation and enhanced service delivery.
- Reevaluation of Marketing Strategies: Given Amdocs’ proven track record in delivering scalable solutions to large telecom companies, fintech marketers may need to reevaluate their current marketing strategies and positioning. The emphasis will be on differentiating their products and services and effectively communicating their unique value proposition.
- Emphasis on Personalization: Amdocs plans to leverage personalization as a key differentiator, which could set a new trend in the fintech sector. Fintech marketers might need to emphasize personalized offerings in their marketing strategies to stay competitive and relevant in the market.
- Need for Partnerships: As Amdocs eyes potential M&A activity in the fintech sector, fintech marketers may need to seek strategic partnerships to bolster their product offerings and capabilities. Building alliances could prove crucial in maintaining and enhancing their market presence.
- Greater Focus on Customer Journey: Amdocs has a strong track record of focusing on the customer journey, with particular emphasis on digital transformation. This approach may compel fintech marketers to pay greater attention to their customers’ journeys, designing marketing strategies that align with various stages of the customer lifecycle.
- Embracing the Family-first Approach: Amdocs’ focus on the ‘family-first banking’ concept signifies a shift from traditional individual-centric financial marketing. Fintech marketers might need to incorporate family-focused marketing strategies, catering to the needs of different family members to create more comprehensive and inclusive solutions.
- The necessity of Brand Building: The entry of a well-known brand like Amdocs into fintech indicates the need for fintech marketers to work on building their brand reputation and recognition. It becomes crucial to not just sell a service but also to build a trustworthy brand that customers can relate to.
