Dive Brief:

• Fidelity National Information Services, which sells technology and payments services to banks and other clients, said its third-quarter results benefited from rising sales at its NYCE debit card network and financial institutions’ increased modernization of systems, including more use of artificial intelligence.
• ”The NYCE network has been a particular bright spot with sales more than doubling and a pipeline growth of three times versus last year,” FIS CEO Stephanie Ferris told analysts on a webcast to discuss the third-quarter earnings results on Wednesday.
• NYCE services are benefiting from the company’s increased use of AI to screen for fraud, Ferris noted, saying FIS’s extensive data sets help it gain from the sale of AI services to banks.

Dive Insight:

For Jacksonville, Florida-based Fidelity National Information Services, also known as FIS, the trend toward improving services by way of AI is providing a reason to sell more technology, payments and digital services to its bank and capital markets customers. That’s partly due to the data that the company manages across its card, payments and digital systems.

“Our clients are leaning in and asking us to help shape their AI journeys, viewing us as a strategic partner,” Ferris said on the webcast. “Data powers the algorithms that underpin AI, and for this reason, FIS holds a foundational advantage.”

The company will handle even more data once it completes the acquisition of the issuer business it bought earlier this year from Global Payments, Ferris noted. That transaction is due to close in the first quarter of next year. Similarly, its sale of a minority stake in the Worldpay merchant business is expected to close early next year.

FIS payments services, including those provided by the card networks and other money movement channels, were significant drivers of an increase in third-quarter revenue the company reported Wednesday. Net income for that quarter from continuing operations rose 7% over the year-earlier period to $264 million as revenue increased 6% to $2.7 billion, according to the company’s earnings release.

“Bank technology spending remains strong, and our clients are prioritizing spend across our high growth verticals, digital solutions, payments, innovation and lending modernization,” Ferris said in prepared remarks for the earnings webcast. “We anticipated that AI would transform financial services, but the pace and depth of adoption have exceeded our expectations.”

With respect to NYCE, the CEO said AI is helping beat back fraud as the company uses machine-learning, as well as behavioral analytics, to detect threats across billions of payments on a daily basis, and then help clients act to prevent it.

The growth of the NYCE business wasn’t tied to increased pricing power, Ferris said. “I don't see an irrational pricing environment, whether it's in any of the products, and in particular in NYCE,” Ferris explained in answering an analyst question on the webcast. “We're happy with NYCE’s performance, generally. As we talked about the strong performance for us, it's been more around adding more [merchant] account volume to the platform.”

The company’s card business expanded with the acquisition earlier this year of the Canadian company Everlink Payment Services, which has a historical connection to NYCE.

The company is also using AI to improve its own internal processes, tapping it for risk management, sales lead generation and product development, Ferris said.