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Paladin Blog

Aaron Silva

Recent Posts

Will the Cloud Based Core Fintech Messiah Ever Arrive?

Posted by Aaron Silva on Feb 3, 2021 9:13:49 AM

The pent up demand for an alternative, modern, competitive core to the out-dated legacy stack saddling the community financial industry today led by Fiserv, FIS, Jack Henry and their cousins at Finastra and CSI is incredible.  Bankers are not only thirsty for a platform that is easy to use and easy to train their staff, they need platforms that are flexible and can be integrated easily with any number of other systems.  This isn't much to ask for in the 21st century, but unfortunately the options are slim pickings and will remain that way for some time.  I predict that it will be another 3-5 years (circa 2024 - 2025) before any of the new fintech cores are mature enough and exhibit the appropriate risk profile palatable for bankers to jump in.  What I mean is that a rank-and-file banker is going to need to see and understand many reference-able accounts that have operated for many years successfully before they will risk their franchise.  Community bank CEOs (many older and nearing retirement) are going to be risk averse even though they know a technology transformation is the key to long-term success.  Regardless of their tenure,  very few bankers are interested in being the 5th, 15th or 25th bank on a new, unproven core platform.  

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Topics: Paladin Research, Fintech

WARNING: Don't Sign that Unsolicited Pandemic Deal

Posted by Aaron Silva on Jan 6, 2021 3:00:56 PM

The pandemic of 2020 has been a major business disruption and distraction to the community banking industry - and all industries globally for that matter.   Albert Einstein was famously quoted, "In the midst of every crisis lies great opportunity."   This fact is not lost on  the legacy Core & IT suppliers Fiserv, FIS and Jack Henry as they have recently blanketed their current clients with pre-emptive and unsolicited contract renewals years ahead of their maturity dates.   These "Pandemic Deals" as they are being referred to, are finding bankers flat-footed and making many to feel cornered into a long-term, multi-million dollar decision at a great time of uncertainty and when their collective minds are on so many other pressing matters.  Bankers that have contacted Paladin feel these offers are intimidating as some vendors tease "take -it-now-or-leave-it" deals that feel more like a strong-arm tactic than a partnership hug.

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Topics: Contract Negotiations, Fiserv, Jack Henry, FIS

Timing is the Difference Between the Quick and the Dead

Posted by Aaron Silva on Dec 10, 2020 3:56:55 PM

Three sales reps from Fiserv, FIS and Jack Henry walk into a bar one night and belly up to the counter. The bartender says, "What would you three gentlemen like?"  In unison they all answered, "A banker with less than 12 months on his contract willing to negotiate alone!"

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Topics: Contract Negotiations, Paladin Research, Fiserv, Jack Henry, Fintech, FIS, Bank Technology

FIS' Simple Contract - It's Complicated.

Posted by Aaron Silva on Dec 5, 2020 2:22:43 PM

Earlier this year FIS announced the groundbreaking innovation of a "Simple Contract" (now renamed FIS ClearEdge) that delivers a, "...simplified pricing and contracting model for qualifying U.S. community banks and credit unions that [enables them] to bring innovative new products and services to market more quickly, control expenses, and maximize the efficiency and resiliency of their operations – better positioning them for success as the economy recovers from the current health crisis."

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Topics: Contract Negotiations, Paladin Research, FIS, Bank Technology

BANK NEWS REPORTS: Community Bankers Find Little To Love In Their Relationships With Core Providers

Posted by Aaron Silva on Aug 17, 2020 3:23:00 PM

Bankers News published an article featuring Paladin President, Aaron Silva, discussing frustrations by banks with their core providers.

"Gather a group of community bankers and you'll quickly find their common ground: A bad experience with a core processor. Their complaints might focus on lack of responsiveness, steep conversion or deconversion fees, or brutal terms to terminate a contract early; whatever the problem, the result is frustration."

Our President, Aaron Silva, weighed in on the topic.

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Topics: Fiserv, Jack Henry, Fintech, FIS

Is Exclusive Marriage to a Partner Necessary Anymore?

Posted by Aaron Silva on Mar 3, 2020 10:04:12 AM

Buried deep in the fine print of your Core IT agreement is something called an “Exclusivity Clause”.  Most bankers don’t know it exists.  Most again don’t know what it means until they bring a competitive solution from a newer fintech to the relationship.  Bankers are surprised to find out that a vendor armed with the Exclusivity Clause (EC) has near total control over your destiny – at least for the next 5, 7 or 10 years.  Unless, of course. you are prepared to cough up 50%, 80% or even 100% of the remaining contract value to exit the service for greener pastures. This is completely unreasonable but it’s important to understand how we got here before we chart a course of freedom.

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Topics: Fiserv, Jack Henry, Fintech, FIS

What If Trump Negotiated Your Next Core IT Deal?

Posted by Aaron Silva on Jan 20, 2020 1:53:18 PM

After 12 years of running a company that is 100% focused on negotiating on behalf of community banks against the Big Three Core IT oligopoly of Fiserv, FIS and Jack Henry, it’s not getting easier. In fact, it’s getting more difficult and more complex each year as these very intelligent suppliers maneuver, juke and jive to maintain market dominance over community banks whom, when doing it alone in a contract renewal negotiation, have little chance of getting a fair deal. The deck remains stacked against the industry even as many organizations finally begin to cry foul. Following the launch of the Golden Contract Coalition in 2016, ABA launched the “Core Platform Committee” in late 2018 turning up the heat publicly against core suppliers and calling out their unfair trade practices.

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Topics: Fiserv, Jack Henry, Fintech, FIS

CSI Leads Push for 10 Year Technology Contracts

Posted by Aaron Silva on Nov 19, 2019 10:27:29 AM

It continues to escape any common or practical business sense as to why a community bank would agree to voluntarily be locked into a 10-year technology contract.  More so, the fact that a 10-year contract even exists (is offered at all) questions the ethical standards of technology suppliers and their commitment to selling services that fairly meet the needs of community banks in exchange for a reasonable profit.  10-year technology contracts are neither reasonable nor assist Banks in meeting any of their business needs. In fact, these contracts are predatory, outrageous and exorbitantly profitable to vendors and not their client “partners”. While all legacy Core IT suppliers would love to handcuff their clients to 10, 15 and 25-year contracts (yes, we’ve seen 25-year deals) one supplier - CSI of Paducah, Kentucky (www.csiweb.com) - appears to lead the charge on lacing their customer base within these contract shackles.

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Topics: Fiserv, Jack Henry, Fintech, FIS

Forbes: FIS Retreats Under Pressure From GCC

Posted by Aaron Silva on Jul 18, 2019 12:12:49 PM

In late June, Forbes published an article on FIS recent attempt to unilaterally implement a new security surcharge on a select few of their clients without their permission (FIS has not stated publicly how many were targeted but GCC estimates there were 250-300 guinea pigs). These fees, costing several tens of thousands of dollars per client, were imposed because FIS stated it had recently improved its security infrastructure to address new threats and that they wanted to “partner” with their clients in sharing this expense. No explanation was provided as to exactly what these threats were or why they decided to deploy this tariff [now] and without the consent of their clients, even though each FIS client had already agreed to a security SLA guarantee in their existing agreements.

According to FIS, this security surcharge was justified, and in exchange they would extend indemnification to include the Banks’ client behavior subject to exclusions and Limits of Liability (LOL) already stated within their agreement.  LOL is traditionally woefully inadequate in most standard FIS agreements as it is and so this "benefit" really has no tangible value to a banking franchise. FIS stated that these kinds of security measures are becoming increasingly necessary, as cyber-attacks are growing in popularity and evolving in complexity.

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Topics: Fiserv, Jack Henry, Fintech, FIS

WSJ REPORTS:  Core IT vendors building tollways, not highways to bank-owned data

Posted by Aaron Silva on Apr 13, 2019 1:58:36 PM

The Wall Street Journal published a story about small banks beginning to rebel against the Big Three Oligopoly ("the BTO") of core IT suppliers Fiserv, FIS and Jack Henry - now commanding more than 90% of market share according to CELENT.  I was interviewed extensively by the writers about the ease (or difficulty) of technical access and economic affordability when banks need unfettered access to their data (i.e. for third party fintech partners).  While they are starting to provide access, they're doing it in a way that unfairly monetizes your data to their exclusive benefit.  Here's how.

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Topics: Fiserv, Jack Henry, Fintech, FIS