Speaker 1:
From the Library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision in global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICE's exchanges and clearinghouses around the world. And now welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
I'm going to talk to you about three watershed dates of the New York Stock Exchange that I bore witness to. The first was October 15th, 2015. That's when First Data Corporation, NYSE ticker symbol FDC triumphantly returned to the public markets with an IPO raising $2.5 billion ending eight years under the ownership of Kohlberg Kravis Roberts, that's NYSE ticker symbol KKR, which had engineered a $29 billion leverage buyout of the credit card and payments processor back in 2007 at precisely the wrong time, given that the world would soon enter the global financial crisis, putting the pinch on consumer spending for years to come.
The second date was July 29th, 2019. That's the date that Fiserv, NASDAQ ticker symbol FISV, completed its merger with First Data in a $22 billion transaction, uniting two premier companies to create one of the world's leading financial technology providers and an enhanced value proposition for its clients. There was a different kind of ceremony on the floor that day, a wistful one as First Data executives team gathered on our podium to ring the closing bell one last time before the two companies combined.
And the third date that I wanted to talk about is today, June 7th, 2023. Today is the day that Fiserv returned to the NYSE, ringing the opening bell and ringing in a brand new ticker symbol, NYSE ticker symbol FI. Stands for FinTech Innovation, if you want to look at it that way. Looking at the group gathered on the podium, it was many of the same leaders who were there eight years ago, along with a bunch of new faces, a driven and cohesive team that, starting in 2013, 10 years ago, took a pretty badly beaten down legacy processor and transformed it piece by piece into a model of modern FinTech.
The NYSE put out a news release earlier today celebrating the occasion. In it, President Lynn Martin said, "We are thrilled to welcome Fiserv, an established leader and trailblazer in FinTech and payments, as the newest member of our NYSE community. As Fiserv begins its next chapter, it will join our community of innovators, icons, and disruptors who routinely set the pace in advancing tech-driven innovation across the globe." That's from Lynn Martin.
Now I have to say, I had had a front row seat for some of that early history. Appreciating the journey that First Data and Fiserv have been on requires listeners to appreciate the thoroughly unique journey of a Brooklyn boy who cut his teeth in the financial services industry beginning right here on the floor of the NYSE. The journey rode a career through the storied names of New York Banking, Shearson Lehman Brothers, Citigroup, and JPMorgan Chase before being handed the reigns of the mother of all turnarounds, returning First Data to the public markets, then helping engineer the merger with Fiserv, and returning home, this homecoming today to the NYSE where it all began.
In a minute, our conversation with the architect of that journey, my friend Frank J. Bisignano, Chairman, President, and Chief Executive Officer of Fiserv, ticker symbol FI, man. Boy, it sounds great to say that. On rising through the ranks of Wall Street, on riding a phoenix through the rebirth and renewed growth, and the future of financial and FinTech technology where friction falls away between buyers and sellers, everything Frank Bisignano is coming up right after this.
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Josh King:
Our guest today, Frank Bisignano, is Chairman, President and Chief Executive Officer of Fiserv, NYSE ticker symbol FI. From the old days at Shearson Lehman Brothers, Frank rose to become Chief Administrative Officer at Citibank and CEO of its Global Transaction Services Unit, then went on to serve as Co-Chief Operating Officer at JPMorgan Chase and head of its Mortgage Banking Division before Henry Kravis and Scott Nuttall tapped him to turn around First Data in 2013. The rest, as I just talked about before the break, is history. Frank, welcome back finally to the New York Stock Exchange. It's great to have you and so many of my friends from Fiserv listed here. Great to see you.
Frank Bisignano:
Great to be here with you and it's great to be doing this with you today, Josh. Thank you.
Josh King:
Not your first time on the podium, not by a long shot. How did this one feel today?
Frank Bisignano:
Oh, you know. It felt special. New ticker symbol, coming out with a small business index with the New York Stock Exchange. Fiserv is a storied company, 37 years of double-digit EPS growth. We serve every American household, so coming to the Stock Exchange feels like the right thing for us right now.
Josh King:
You've often told me about the team you'd like to put together in the locker room. It could be like the Yankee Stadium announcer, reading the names, if I'm going to say them. But how Rossman, Patruno, Manchester, Asher, Foskett, Sebby, Gibbons, Patel, Chiarello, Wilcox, Karpova, Carriri. What do those names mean to where Fiserv is today?
Frank Bisignano:
Oh, it's a team sport. I like to believe that we have the capability to work together better than 99% of the companies out there. I think it's not a bunch of individuals, it's a bunch of teammates. We're together all the time, we eat together, we work together, we sometimes argue together, but we get to the same place at the end and it's a lot of fun. It's a lot of fun being on the team and trying to lead the team.
Josh King:
You filled the floor also with a lot of Fiservians or Fiservans, I don't know what you call them, you call them teammates. It's about as big a group from a listed company since before COVID that filled the floor. You made a comment in the boardroom that it's a proof point that people actually can get to work early if they put their minds to it. Tell me about the journey you've had since you were last here, that date that I talked about, July 29th, 2019, integrating these two companies, Fiserv and First Data.
Frank Bisignano:
Well, I like to say a pandemic's kind of not good for anything and it's definitely not a merger enhancer. I like to say we're a body contact management team and we spent a lot of time on video running the company during the pandemic. So we closed in '19 and it was less than nine months when we sent everybody home.
I think we did an unbelievable job. In a lot of ways early on, we got closer because of a crisis. A crisis does bring a team closer. I had a great partner, the CEO, that I was the president and COO, Jeff Yabuki. We had a fabulous way to operate together and I was fortunate that he gave me the opportunity to run the company. And so I think it's been about innovation for us, it's been about growth. I like to say we took a company that grew between 3 and 4% and a company that grew between 5 and 6% and we got it to 7 and 9% and produce 11% revenue growth while producing for 37 years.
I also, it's never lost on me, I think the combo of Lee Asher and Jeff Yabuki were kind enough to get me a Milwaukee Bucks jersey with a number 4 on it and my name. And the meaning of that is in 37 years, there's been four CEOs. So the legacy that I'm carrying on, I feel I stand on the shoulders of those who came before me and I think they all would completely approve of the change of both the ticker symbol and coming to the New York as we take a company that has aspirations to be one of the top in the country. In the U.S. markets, we already are a 70 plus billion dollar market cap. Kind of did strike me when I saw the headlines of the press that we're the second-largest change ever. And I was like, "Wow, that's a big deal."
Josh King:
Talking about that pivot that you had to do in '19 around COVID, I mean one of the tools in the toolbox to make this a body contact management team was you actually found a vacant furniture store storefront in your hometown of Watchung, New Jersey, and said, "Look, we can't come into Liberty Street, we don't have the place in Broadway fixed out yet, and New York's pretty shut down." But you went to some extraordinary measures to keep people together.
Frank Bisignano:
Yeah, it was kind of fun. It was a little bit like Little House On The Prairie. We were just running a Fortune 500. I can remember we did Investor Day in that furniture store. Nobody would've ever known it. New York was closed down, you couldn't get more than 10 people in a room and we kind of looked at this store from 1947. Here's a data point for New York Stock Exchange fans. When Stacy Cunningham came to see me at that furniture store, she about hit the floor because her dining room table was from it. So here you have the President of the New York Stock Exchange is like, "You're at Valley Furniture?" And we still had the sign up, nobody knew what was going on, but they started wondering why are all these cars here?
And then when we, during holiday season of Christmas and Hanukkah, we did Investor Day, it was December, and we had decided we were lighting up the building and we had all the holiday lights on. On social media locally they were thinking it was Willy Wonka's Chocolate Factory, something's going on in there. Little did they know we were running a public company and we're filming Investor Day with a bunch of crews because you couldn't get into New York with the amount of people we had.
The other interesting sideline is there was a school pod going on right at the same exact time, so we had to keep all the school kids, eight of them who were going to school virtually, but we created an environment for them. We had to keep them quiet while we were filming Investor Day. So yeah, no, I forgot about all that, but thanks for reminding me because it should go in the memoir somewhere.
Josh King:
I mean, there's a long memoir for you, Frank. If we could have all day, we'd get into a lot of it. I'm going to try to touch on some. I did look through the long list of the Fiserv folks who are coming to the New York Stock Exchange today and management team, board member and investor, et cetera. And then Fiserv, employee teammate, a couple interesting names popped up out of that list. Brought back a lot of memories. The owners of Olive's, Nick Hartman and Toni Allocca, and Anthony Kanterakis and Stratos Karabasis of the local Greek. What did it mean to have them here today?
Frank Bisignano:
You know a little bit made Josh, I just make stuff up as I go along and I was like, "We should have clients here." And of course somebody interpreted clients as the biggest possible clients in the history of mankind because we have those. And I was like, "Yeah, those are good, but could we get some small businesses?" We're getting on small business index. We are the heart and soul of America's small businesses in America.
And so when Olive's with Restaurant QSR that's at 225 Liberty Street was here, I was like, "Oh man." Nick would be consultant to me and Guy on how Clover should work better. And it brought me back to when there were three Clovers in the world and one of them were headed by Nick and thank the lord he's in business, thank the lord he's been a good friend to us. And we also brought three small business salespeople that nobody would know, but they cover New York. And I was like, "Let's get the people who cover the small businesses in New York," and they were just so pumped today.
Josh King:
You mentioned something, I was going to introduce it later, but I should bring it up now. Clover, a listener might not know exactly what that is, but a big part of the path forward for the First Data IPO was the development of the Clover Network. It was developed by Leonard Speiser and John Beatty, and then it was acquired by First Data. And then in the early days it was hard to find a Clover on the counter of a retail store and now they're ubiquitous. And I see my old friend Michael Bugno evangelizing it all over the country. What's the importance of that machine to helping small businesses grow?
Frank Bisignano:
Well, I think first of all, I probably never would've able to recruit you at a Clover because you also had a vision and a dream around what Clover can mean and it actually, we all bonded around this Clover all over, the Clover van, but we had nothing. We had nothing, but we had a dream. And so right now-
Josh King:
Non-working prototypes.
Frank Bisignano:
Yeah. And sometimes they were in client's office the non-working prototypes, but that's the journey of entrepreneurs. Where's a better place for entrepreneurs to kind of end up than the New York Stock Exchange where all great entrepreneurs end up? Of course, there's fabulous entrepreneurs on the NASDAQ too.
I mean, I think Clover, I don't know if we were lucky, we were good. We were too dumb to know that we couldn't have more volume than Square, another great company, and I have tremendous respect for Jack and I've always felt like, I'd tell investors we'd end up in a heavyweight bout with Square, but like I like to tell investors now when I talk about it, I say, "You laughed me out of the stadium when I told you that and it was true," but it's Clover all over now and we're going to do more and we're going to invest more. And back in the old days, we didn't have any money either, so it was building Clover without money and we like to still act like we don't have any money.
Josh King:
We have certainly seen our share of startup-disrupting stories play out in the FinTech space over the last couple years and back in those days, it was Square and now there's other names out there. And when I was working for you, you kept having to answer the question about how Bitcoin was going to change everything. How does Fiserv's performance counter what had been this conventional thinking about legacy companies and your ability to disrupt with FI?
Frank Bisignano:
We talked as a team and we talked about the fact that we were an original FinTech. And under that definition it meant enabling financial technology for financial services. And somewhere on that journey, this concept of FinTech became the disruptor of financial services and people saw the massive TAM in financial services and thought these disruptors are going to take it all away and you're going to have tremendous movement of capital from traditional to nouveau. But we always stayed the course. We had this deep belief that our purpose was to help our clients grow their business and our purpose wasn't to disrupt our clients or take our clients' business away from them. And yes, there's that period of time, there was always that period of time where you're viewed as this old legacy company. But I like to remind people, JPMorgan's an old legacy company. Apple is an old legacy company. If you remember, we said when we did the IPO that Apple had come out when First Data went private and you know, you think about how old it is today.
So our deep belief is that legacy companies are designed to continue to invest in themselves for the benefit of their clients, bring innovation and capability that the client can get better from us than themselves, and allow them to grow. And I think the world has come back, and that was really the point of my shareholder letter. This cycle has played itself out. There'll always be a fad, right? There'll always be a fad. Now look it, there are great companies that are built out of fads. You can make it Apple, you can make it Microsoft, you can make it Amazon. But then there are great companies that continue to create shareholder value and client value by reinvesting in themselves and basically disrupting themselves. Like Clover disrupted our FD130, our new product on dot we embed into our mobile banking product and have a disruption in a manner that actually had a creative, in a year we put 1,000 banks on it and it's a creative to our banks and it helps us generate top-line and better shareholder value.
Josh King:
Let's step back a little bit, Frank, for a second and talk about your own journey a little bit in addition to the journey that Fiserv's been on. I remember you telling me many times about your early years really here at the corner of Wall and Broad Street doing business here at the Exchange, unwrapping a ham sandwich and spending a lunch break on the steps of Federal Hall. We were out there this morning celebrating the small businesses that thrive with the Clover system. As you look at this large group of people that were convened, your fellow leaders, all that technology being brought to bear at experience where, compare that to the kid who was sitting on the steps at Federal Hall, who was he?
Frank Bisignano:
First of all, it was a salami and provolone sandwich.
Josh King:
Sorry, sorry.
Frank Bisignano:
And Dick Grosso would be proud of that also. And look at, I think today, I don't... Today was kind of an interesting day. You have Jeff Sprecher, you have Lynn Martin, you have Tom Farley, you have Stacey Cunningham. And I kind of feel like, wow, I think my team got to experience it all today. Maybe with me is Lee Asher and she can appreciate the Exchange and wonder like, okay, yeah, we're going to have a small business index. I think when Lee leaves today, she thinks like, "Wow, this was really something that in some ways is a once in a lifetime opportunity."
You're not going to open your stock on the New York Stock Exchange another time. And this is the hallowed halls. Now if you go back to me and Charlie Bonsignore down at Evans and Company's trading booth and walking out to Federal Hall and just looking and marveling at all the humans coming by Wall Street, I think probably all I was thinking about is how to make rent. I really wasn't thinking I'd ever be doing this. It wasn't really what was on my agenda. It was just had to do a good job.
Josh King:
Making rent, a lot of people still on the floor are focused on doing just that. I mean, Frank, call it a once in a lifetime opportunity, but as you said in front of the group today, you're going to use this place and there's a lot that can be done beside just ringing the bell and opening the floor. This place is going to be, I hope as always, Fiserv's home away from home now.
Frank Bisignano:
Well, I have at home in a desk drawer, a really small little piece of cardboard, and if anybody could see me, they'd see me holding what would be equal to the size of a driver's license. And what it is the membership card of the New York Stock Exchange Luncheon Club. And my member number was 487. And so what's the meaning of 487? 487 was the clearing number for EF Hutton and I had the job of merging Shearson, Lehman and Hutton and walking across Battery Park.
So when that became my number, I didn't ask for the number, it was the number I was given. And there was this beautiful Luncheon Club that a gentleman named Paul Underwood who was so good to me said, "You should come up and let's have lunch at the Luncheon Club." And I was like, "Oh yeah, I'd love to be a member." I mean, it really had a really good clam chowder too. It was unbelievable clam chowder. I mean, it was the old school Luncheon Club and when I got 487, I was like, holy mackerel, this is a number I completely relate to. It had nothing to do with anything, but I've never given up that card.
Josh King:
The Luncheon Club sort of lives on a little bit in what we do on a monthly basis, Whiskey Wednesdays. Scott Wapner and I get together and just have conversations with people, just like they used to do at Bobby Van's after a day on the market.
And let's go back 10 years, Frank. April 28th, 2013, headline, First Data names Frank Bisignano, Chief Executive Officer, Joe Forehand, who was then Chairman of First Data says, "Frank has a proven track record of catalyzing positive change on a global business operating in a dynamic industry. At Citigroup he built from the ground up the largest transaction services business in the world and oversaw the largest technological and operations businesses in the financial services industry." I'm curious, Frank, what was the challenge that Henry Kravis and Scott Nuttall at KKR had on their hands and what were the things that you needed to do to meet that challenge?
Frank Bisignano:
Joe Forehand was the CEO and Chairman of Accenture and then came on to, at times, come in and out of being CEO and Joe Forehand was a legend to me. Henry Kravis was a legend to me. So kind of just the opportunity to be with these creators and innovators. Yes, it was a 10x levered company with $24.5 billion in debt and zero free cash flow.
Josh King:
That's a real problem.
Frank Bisignano:
And yes, if you ask Scott Nuttall or Henry Kravis can you describe another company like that, their answer was going to be WorldCom and Enron on the way out. So the challenge was really, what are you doing taking the job? And at that time the concept was break up the firm. And I said I would come and do the job because I just believed in payments. And I think the difference in Enron and WorldCom were two completely different, they had a different set of issues.
And I think KKR, I cannot tell you how great a partner they were. I mean they were just like unbelievable. Joe Forehand was a great partner. You go sign up a guy like Joe Plumeri who when I was in my 20s, I looked up and saw him at American Express Tower. He was the CEO of Willis and bring him on board to help. It was just kind of this special situation. I think it was a complete team effort. We did bring in, I think this would be true in a public filing, we probably said we brought in 120 new leaders in the top 150 in a year and a half. And that was kind of the mandate. We're going to have to have a new team, we're going to have to have a new set of thoughts and we're going to do something different.
I think it was once in a lifetime experience. Hopefully nobody ever finds a property in that shape, but you find a property in that shape in a secular growing business that was the industry leader and was maybe the icon of why Legacy existed, meaning it did not innovate. Not innovating to a company who's the large-scale incumbent is a formula for death. It's just a matter of fact. So for us, because we live this life and we understand the balance, the balance of investing, the balance in... Remember, Fiserv, 37 years of double-digit EPS. I'll ask Pete to go to the record book. I don't think he'll find somebody with 20, right? And we got 37 and that's about investing for the future.
Josh King:
So 10 years ago they said, "Fix this," and you fundamentally believed in payments. 10 years later, you're innovating in the FinTech space and you believe in payments. Just a couple numbers that Fiserv touts. 6 million merchant locations now, 1.4 billion global accounts on file, 12,000 financial transactions per second, nearly 10,000 financial institution clients. Think about managing that world, Frank, you learned a lot about growing these numbers when you were growing global transaction services at Citigroup. How did that experience inform how you would grow First Data and now how you're growing Fiserv?
Frank Bisignano:
Well, I'd say if I rattle through the benefits of my life, you'd put Sandy Weill on the benefits of my life, you'd put Tony Torchiano who ran First Fidelity and taught me so much when I was like 30 years old. You put Jamie Dimon, you'd put Mike Carpenter. Till today, I talk to all of them, Jim Robinson. And I think everybody believed in scale, innovation, expense discipline, but most of all the client. We are in a client-driven business so innovate for your client, create value, have really sticky businesses. So I think it's honestly hit lotto in the people who I worked for.
Josh King:
I mean hitting lotto, Frank, just touching on your time with Jamie Dimon for a second. One of the things that you really spearheaded during your time at JPMorgan Chase was the value of hiring military veterans into the business. You did it at First Data, now you've done it at Fiserv with Fiserv Salutes. Your dad spent his life in uniform and now you've got a $14 million partnership with the Institute for Veterans and Military Families at Syracuse, and you're sponsoring the Entrepreneurs Bootcamp for Veterans with Disabilities. What's the importance of giving back broadly and how does your engagement with the military community help grow the business?
Frank Bisignano:
Companies are platforms to do good. So believe that early on. I think there are a lot of noble causes and many of them, somebody could find the other side of that noble cause or a better cause. I think the U.S. military is untouchable. Who's going to not want to help a member of the military coming home? I remember early on at JPMorgan when I had the opportunity to deal in the mortgage crisis, I was like, let's give wounded warriors foreclosed homes. And there's always a debate, you're never going to sign up a hundred percent of the people. But I think when you know, you see the great Americans, when I always do say I sat at a table, my dad was an orphan, 15 brothers and sisters he had, so that would put 17 uncles plus or minus at a table in Brooklyn. The argument was what was the better branch of the service? That's what these men would argue about.
And I always say the first time my wife came with me to an event that was of military nature and the fight songs from every branch came up and I would know the words inside out. She kind of looked at me, I said, "That was my basement." And so I got the opportunity though that generation taught me everything I knew, and yes, my dad wore a uniform protecting his country in some form his whole career. But what's a better platform than hire them, train them, make them your clients, give them an extra benefit. It's like a gift to be able to do it. So I don't really think of it as giving back. I think of it more as you got a company, it better do good for people.
Josh King:
Doing good for people, your parents, you mentioned Anna Albert being an orphan raised you and your sister, Elvira in Mill Basin, you now make your home in New Jersey, Frank, but you can never take the Brooklyn out of you and throughout all your chapters, you've always given back to it. What's the importance of your roots as you traverse across the globe to build Fiserv looking across that river and what that meant to you?
Frank Bisignano:
For me, and this is probably true for so many, and you know, you walk on the floor of the New York Stock Exchange and it does have Brooklyn in it. I mean, you go to a booth and somebody's grabbing you, they remember it. You have legendary people from Brooklyn who run businesses here like Vinny Viola, who I think the world of. I think it's really about where it started. I remember what New York was and let's go back to the Dutch and what got created here and it's really an extension of Europe and it was the melting pot and people went to Brooklyn, people went to Queens. Ultimately people gravitated to Staten Island at some point in their life.
But you got to respect every opportunity given. I say the same thing about my parents. I was fundamentally an immigrant household, but I had a lotto in parents because all they did was kind of love us and want us to do better. Kids were always the priority. So that neighborhood in Brooklyn is the same neighborhood. It may have different socioeconomical slants on it, but I like going back there and I like doing stuff. I want to build things in their schools, give them more.
Josh King:
I mean you mentioned the number 4 jersey that you got from the Bucks. We had Marc Lasry on the podcast last year to talk about their run to the 2021 NBA championship won in game six at the Fiserv forum. Clover contributes a lot to that fan experience and Fiserv just opened up a new headquarters in 144,000 square feet in the old Boston Store building in downtown Milwaukee and you've also maintained your presence in downtown Manhattan. How can companies like Fiserv contribute to maintaining the vibrancy of city life, whether it's in Wisconsin or New York?
Frank Bisignano:
First of all, jobs. Second of all, you hear enough about me and you know enough about me and you hear enough about me like, jobs that people don't come to the office for don't really create a lot of commerce in the neighborhood. There's really, we always had a belief that for every job, there was a multiple set of jobs created in the local environment. So having your people in the office, for us in Milwaukee what we're going to do, I'm so excited about because we're going to be fundamentally down the block from Fiserv Forum. So the idea that clients can come visit us, we spend time, all our space is designed for clients also. How do we bring clients in? How do we get them to know us better? How do they become part of our family? And then how do we share what we have with them? So I think all of that brings commerce to the neighborhood, really. It's important to show up at work and because it's part of teams and I think it also helps develop the communities better.
Josh King:
Outside of the city, outside of commerce in the neighborhoods, Fiserv also just opened up a 400,000 square foot FinTech Hub, Berkeley Heights, New Jersey, adding, talking about jobs, about 2,000 of them to the local workforce. Governor Phil Murphy said at the time, "The announcement from Fiserv is exactly what we envisioned when we created the Emerge program: An innovative company that provides high-paying jobs choosing to expand in New Jersey." What are you getting done at that Innovation Lab that's going to specialize in designing use cases around the future of banking, money movement, commerce?
Frank Bisignano:
I mean, it's just a fabulous facility. Some of our other facilities in Marquee, we have a great location in Alpharetta, Georgia where is, also in Marquee, where we can bring clients in, where people can work and thrive together. I think in Berkeley Heights, we used everything we learned in Alpharetta and even in New York City and brought it out there, from client entertaining space, and that really means collaborative space, to complete open floor plates. We delight at the filled parking lots. Of course they all have solar and we have everything. Right now it's in the process of being a platinum building, the highest lead standard.
You know, we had 1,500 jobs in New Jersey and they were dispersed. We thought it was a better idea to get everybody together. But post-pandemic, we like having our own facilities. The concept of sharing wasn't quite as attractive. We were in Jersey City, we were in Piscataway, I mean Parsippany, how do you bring it together. And I think when clients come there, they just marvel. And I wish I was in one of our facilities today. Not more than I wish I was here, but we have the power of our video capabilities and our technology that I think, and we should get you out to Berkeley Heights.
Josh King:
I can't wait to come see that.
Frank Bisignano:
We should get you to Berkeley Heights and we'll even take you to the furniture store after that.
Josh King:
I'd love to see the furniture store too. And I'm conscious of time, Frank, but on the last earnings call that you did, you ticked off a bunch of the things that are driving Fiserv's current growth including CardHub, which was built on the tools acquired with OnDot, you mentioned that earlier, and SpendTrack built from the SpendLab acquisition. I watched you do a ton of deals over the years, Frank. What's your approach to M&A in 2023 and how do you weigh the costs and benefits of the things that you know you're going to need to help grow?
Frank Bisignano:
For us, and I say this frequently, we need to fit within our clients' strategies. If you go to Clover, it was how do we bring more capabilities, more businesses, so they can scale better? If you look at what we do in our digital banking platforms, it's really how do we help our banks run a better mobile operation for their clients? And you could check to them.
So we have a very good skillset at taking technical functionality and moving it into the business space and spreading it across our client base. And I'd say a lot of our decisions on things that we've bought were driven by the best place in the world to get it done. In the client's office, listening to the client, understanding their challenges, and then approaching it like the company we are, the number one job we have in a company is a software engineer. We're a technology company and how are we going to build or integrate? I mean I do think we are good at keeping founders too. When you look at that, I looked down off the podium today and I was like, wow, that's a lot of very talented people all in one location. So we have a lot of that. You could go to Omaha and find that. You could go to Alpharetta and find it. So I think it's listening to the client. Always got to be listening to the client, Josh.
Josh King:
You and I, Frank, both big fans of Michael Rubin who owned the 76ers and the New Jersey Devils, now CEO of Fanatics. For larger enterprises like Fanatics, how does the Carat platform help the growth of his business?
Frank Bisignano:
CommerceHub is a strategic product that sits within Carat. I think also we bring value-added services like the gift product. I mean they're a great client of ours on all of it. And so it's how do we make it frictionless for their clients to acquire online and how do we also help them lower the cost of acceptance? And those two combos seem to work very, very well. You could do it at point of sale, but you can also do it in the online environment and Carat's very strong with that.
Josh King:
I remember that 2017 investor day that you did and you brought out a prop and it was an iPhone and it was 10 years since the iPhone had been introduced and a lot of us were watching Apple's developer conference this week marveling at Tim Cook's introduction of Apple Vision Pro. But where the rubber meets the road is payments. And in that last earnings call, you also talked about launching Apple Tap to pay for iPhone for SMBs on the Clover platform and for U.S. Enterprise clients. Where do you see contactless payment usage going from here?
Frank Bisignano:
I think it's just going to continue. Ultimately, you know, you started with the card and cash was going away for a long time and I probably have less cash in my pocket than I did. It's user adoption and it's what a user wants. So if a user wants a virtual card, if a user wants tap to pay. Ultimately, Clover's really a software platform, but we have hardware because our clients want to use that. I think over time that will evolve, but you're always going to have a long tail of adoption and you're going to have fast adopters. Our number one job is to enable commerce anyway any client wants, right? Very simple. We don't need to overthink it.
Josh King:
I mean, enabling commerce really has to happen everywhere around the world. Sometimes we can get a little insular talking about stuff going on in the United States, but so much of the growth is happening overseas. You've talked about the growth of your international issuer solutions in places like Argentina, Mexico, Colombia, in LatAm, and deals like your contract with the National Bank of Kuwait in EM. Where and how are you looking for more growth beyond our borders?
Frank Bisignano:
We run the company in a manner that it's global strategy, global product, local presence. And as you know, I think regions stand on their own. We don't have a head of international, we have three regional heads, we have country heads and they all own their P&Ls and obviously we run global product. I think there's tremendous growth outside the U.S. Our business outside the U.S., although significantly smaller than our U.S. business outgrows our U.S. business because the cash-to-card conversion ratio still has a lot more growth opportunity.
And we probably invested more over the past five years than maybe we did in the past on growing out the franchises and that growth means we have fabulous talent in these countries. Talent is one of the key elements to whether you're going to win or lose and we think it's the number one element. Obviously our products scale, you know, take Clover, it goes outside the U.S., you take our issuing platforms, they go outside the U.S., but you know, you can remember we didn't have a business in Brazil and now we have a leading business in Brazil and that probably defied the logic that you could actually be a U.S. payments company that would grow a business in Brazil.
Josh King:
And now that you're part of the New York Stock Exchange community, we have lots of listed banks in Brazil that we can do more help and introductions with. As we wrap up, Frank, late last year, Fiserv announced that you entered into a new employment agreement that's going to keep you with the company through December 2027 and by my count, that would be a 14-year journey to build this enterprise from what you found in 2013. Where do you think the business will be at that point?
Frank Bisignano:
Oh, I think it'll be fabulous. It'll continue the trajectory it is. I can subscribe to being a double-digit EPS grower over for more than 40 years, which that's what that would mean. I think we'll continue to innovate and grow. I think we'll do it on every level, EPS margin and our top line, which I think we've really changed who we were through this merger and I think we got the best team in the industry for a really long time and there's lots of people that I want to invest in and grow and make them great leaders inside this company.
Josh King:
Innovating and growing, Fiserv ticker symbol FI stands for FinTech Innovation, if you want to think about it that way. Thanks Frank so much for joining us inside the ICE House.
Frank Bisignano:
Oh, my pleasure, man. Thanks, Josh.
Josh King:
That's our conversation for this week. Our guest was my old friend, Frank Bisignano, Chairman, President and CEO of Fiserv, I take great pride in saying NYSE ticker symbol FI. If you like what you heard, please rate us on iTunes so other folks know where to find us and if you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us, @ICEHousePodcast. Our show is produced by Pete Ash with production assistance from Ken Abel and Ian Wolf. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
