There is trouble brewing with our pasty, pilsner-chugging partners to the north. You know it. I know it. The American people know it. Personally, given the chance I’d build a wall made of melted hockey pucks along the U.S./Canada border to repel those black-denim-wearing, Tragically Hip-listening ruffians. How else will we protect our American Zamboni driver jobs?! That’s for another day though, GonzoBankers. Another day.
For now, let’s focus on Toronto-based D+H, where all signs are pointing to big trouble when it comes to its core systems PhoenixEFE and UltraData. The following are Facts:
Some management changes are to be understood with recent acquisitions, but c’mon! – this is a massive knowledge loss in a short period of time. Management exodus aside, no single point above merits a Panic Button situation for D+H core processing clients … and certainly not D+H lending and payments clients. And, D+H claims to be continuing to sign some new mid-size banks to PhoenixEFE contracts. But, together, these events cause a Crap Storm of Suspicion. (Ed.: Sorry for the consulting buzzwords.) It has gotten bad enough – publicly – that after the conference cancellation notice we hear that Fiserv, in a rare moment showing its sense of humor, sent a letter to D+H clients to invite them to the Fiserv client conference! I couldn’t list that with the facts above because I never actually saw the letter, but several D+H clients have mentioned it.
“God ain’t in heaven,
something ain’t right.”
–David and David, River’s Gonna Rise
So we can all agree, can’t we, that something is very wrong with the D+H core processing business. It doesn’t take a financial tech soothsayer like myself to figure out that a company with executives leaving in droves, cancelled conferences, slow market momentum – including the loss of their largest client … is having difficulties.
Who knows what is driving this, really? Maybe the core business is in such poor shape, sales-wise, that D+H is just cutting expenses, including staff and conferences, to the bone. Maybe its poised to sell the core products business (has a ring of possibility to it) or all of the former HFS business lines (pretty unlikely).
Clearly, your radar is screaming at you if you’re a D+H core processing customer. Your core product could be owned by yet another company in the near future. Maybe, maybe not. But even if no ownership change takes place, the writing is on the wall for the company’s willingness/ability to keep investing in its core processing products. You don’t witness the torrent of change described above and expect R&D to stay level or grow. D+H core product prospects should also take note: know what you’re getting into. It could still be time for you to move to a D+H core product, but know the warts along with the benefits.
Though not all necessarily agreed with every point herein, I thank the many Cornerstoners whose thoughts and ideas contributed to this article, including Sam Kilmer, Terence Roche and Eric Weikart.