How telco software giant Amdocs is looking to make waves in fintech
The fintech world has no dearth of start-ups, and within it, neither does the personalised banking space. Over the years, countless start-ups have entered the customisable banking space and big banks have also embraced the idea – either through their own innovations or through partnerships.
Amdocs is entering the financial services and fintech space
However, it is not every day that established software players, primarily catering to other verticals, decide to foray into fintech.
Amdocs – a dominant player in the telecommunications sector – is now looking to do just that, seemingly undeterred by existing competition.
By applying the lessons learned in the telco space, Amdocs sees opportunity and claims to have developed a “winning strategy” for banks – specifically in the midmarket. The company says it has seen how transformation can go wrong and aims to leverage the decades of experience it has of working with cloud-based systems such as Azure to implement improved technology for financial institutions.
To learn more, FinTech Futures sat down for a chat with Zur Yahalom, SVP and head of financial services for Amdocs in the Americas, to discuss the company’s rationale behind pursuing fintech, what differentiates the company from others in the space, and what it aims to achieve.
From telco to fintech
Yahalom says internal discussions about the business and its future led the executives at Amdocs to believe the time was ripe to diversify.
“Amdocs is still a big name and telco is definitely the core of the company and where we grew from,” he says. However, one thing was for sure: telco as an industry was not growing as fast as it was a decade ago.
In a bid to continue and sustain Amdocs’ growth, a strategic analysis was initiated a few years ago to investigate ways in which the firm could take its business further. The conclusion was that a lot of the assets Amdocs built in the telco space would be applicable in financial services.
“And so we made the decision to expand the business to financial services – not instead of telco, but on top of telco.”
Product offerings
At its core, Amdocs offers a set of products and services with the aim to help large, regulated enterprises with their digital journey and digital customer experiences.
Amdocs says it can help organisations design how they engage with their customers through research and understanding what customers are looking for. This is followed by implementation of the design – be it on a mobile app or website – all the way through to the cloud infrastructure.
“This is what we’ve been doing for the past decades in the telco industry very successfully. And not just in telco, but with a lot of large enterprises,” Yahalom says.
In terms of key products Amdocs brings into the mix, he highlights product management and pricing and billing. He says the company can help firms personalise offers to specific customers and bundle different products together and present them “to the right customer at the right time”.
Some clients from the finserv space already utilising the company’s offerings include ABN Amro in the Netherlands and Bank Hapoalim, Israel’s largest bank.
ABN Amro, which has been an Amdocs customer for a few years, utilises its billing and pricing platform, offering fee management and fee calculation to its customers.
Bank Hapoalim, a more recent client, deployed its product and pricing platform to package its offerings and launch new products and services for customers with a faster time-to-market.
Another customer is UnionDigital Bank in the Philippines, which opted for Amdocs’ service expertise in designing and building its cloud infrastructure.
A new player with decades of experience
“Even though we’re an established company, we’re fairly unknown in the financial services industry,” Yahalom admits. “I would say the number one challenge for us is to build a reputation, a bit of brand recognition, and make sure that people are aware of the capabilities that we can bring.”
Zur Yahalom, SVP and head of financial services for Amdocs in the Americas. Image source: LinkedIn
Yahalom stresses that Amdocs plans to capitalise on personalisation – both of product offerings and customer interactions.
“A lot of banks, to a large extent, still offer the same few products to all of their customers,” he says.
“We think personalisation of offers and interactions is a domain with great opportunity across the industry, and so we’re looking to be one of the leaders in helping financial services institutions in moving to that stage in their evolution.”
For a company as big as Amdocs, which reported revenue of $4.58 billion over 2022, moving into financial services surely should be easy through potential M&A activity.
On posing this point to Yahalom, he says: “If you look at the history books, Amdocs acquires a few companies per year. As a large company, we’re constantly looking at the market for opportunities to expand our offering and our brand recognition through acquisitions.”
FinTech Futures also understands that Amdocs is looking at potential acquisitions in the core banking space.
“I can’t comment on anything specific, but it is definitely something we’re exploring on an ongoing basis,” Yahalom says.
On beating the competition
When it comes to personalisation and customisation, there are several start-ups offering similar propositions to financial services firms already. How does Amdocs aim to compete in an arena that’s becoming increasingly crowded?
“We’re aware of a lot of start-ups in the personalisation space,” Yahalom says, “but we also believe that we bring a very scalable, field-proven technology that we’ve used with some of the largest telecommunication companies in the world.”
Having worked with such large-scale companies, a lot of which boast more than 100 million customers, Amdocs is confident in what it’s bringing to the market.
“This technology that we bring is very scalable, very proven. We’ve got the experience and expertise beyond many of the start-ups that we see.”
Yahalom illustrates with an example – the concept of “family-first banking” – which it is now marketing to clients.
He says the concept revolves around supporting banking customers within a family structure, as opposed to just looking at them as individuals.
“And a lot of it has to do with how you bring kids into the banking world at the right time,” he says.
Yahalom adds that if a bank does not proactively bring children into the banking world, “they will find other avenues they get their financial education through”, be it TikTok or neo financial service providers.
“By the time they’ve done that, it will be very challenging for the classic banks to attract them as customers, which is why we think this is a major opportunity to serve families and get younger generations into the banking world proactively.”
As a similar use case, Yahalom also highlights supporting the elder generation with the management of their financial situations as another market opportunity.
In terms of takers of this offering, Amdocs is currently working with an undisclosed bank in Europe on the implementation of this concept and is “actively discussing” it with multiple others.
As Amdocs eyes a global fintech offering, it remains to be seen how far it can go to fulfil its ambitions of becoming a major partner for banks and financial institutions in the future.
