Detailed SWOT Analysis of FIS – American Financial Products & Services Corporation

Quick Stats on FIS

Chairman	Gary A. Norcross
Year Founded	1968
Origin	United States
No. of Employees	70,000+
Company Type	Public
Market Cap	$59.03 Billion (2022)
Annual Revenue	$12.2 Billion (2019)
Net Income/ Profit	$825.0 Million (2019)

 

Products & Services by FIS

Here are some products and services FIS has to offer:

• Banking Technology
• Payment Technology
• Processing Services
• Information Based services

Competitors of FIS

• Fiserv
• CSI
• Evertec
• First American Financial

Now since we learned about the bank, let us have a look at the SWOT Analysis of FIS.

SWOT Analysis of FIS

SWOT analysis of FIS is an examination of the company’s strengths, weaknesses, opportunities, and threats. This allows the organisation to understand its market position, as well as what areas need to be addressed and where it can shine. It also aids the corporation in strategizing its business framework and elements affecting its growth.

To better understand the SWOT analysis of FIS, refer to the infographics below:

Below is a step-by-step detailed guide to help you with the SWOT analysis of FIS.

Strengths of FIS

• Product Innovation: FIS has been a pioneer in FinTech solutions and keeps evolving by enhancing or coming up with new softwares either through their Tech team or by partnering with other companies.
• Successful Expansion Strategy: FIS has developed a reputation for successfully entering new markets through mergers & acquisitions like the latest merger with Global Payments. The expansion has allowed the company to diversify its revenue streams and reduce risks in the markets it serves.
• Completely Automated Functioning: FIS has completely automated all its activities helps it respond quickly as per market demands. Successful automation of banking activities with a well-developed IT structure and Infrastructure has made the overall efficiency better.

• Digitalize Process: FIS all the processes are digitised providing seamless financial services and banking tech solutions to its clients. Digital payment adoption has created financial sectors’ power convenient, immediate and secure digital transactions, online and off.

So, we can see how FIS digital solutions enabled billions of people to access flexible, modern and secure payments. Digitalization is a wide area and to start introducing it to you, we have come up with several short term courses in digital marketing where you will learn basics to advanced levels of digital marketing area by area. The courses will give you a broader perspective of digital marketing and will help you establish a career in it.   

• Cost Structure: FIS has a low operational cost structure thus having a huge free cash flow. The company also recorded 50% year over year climbing quarterly revenue from $2.07 billion to $3.01 billion in Q1 2020.
  

Weaknesses of FIS

• Outperforms Market: According to last year’s Q4 report, FIS stocks are outperforming as compared to its competitors. The growth of the company, valuation and return to shareholders has been called cheap by several interest parties.
• Cash Flow Problems: There is a lack of proper monetary planning at FIS in regards to cash flows, leading to certain situations where there isn’t suitable cash flow as needed leading to unnecessary unplanned borrowing.
• Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas FIS needs to invest more funds in technology to coordinate the processes across the board. Currently, the investment in technology is not on par with the vision of the company.
• Integration of Firms with Different Work Culture: Even though FIS has done several successful acquisitions, it sometimes fails to integrate organisations with different work cultures and ethics.
• Undiversified Workforce: FIS has a very limited number of employees from different cultural and racial backgrounds thus making it difficult for them to adjust and resulting in loss of diversified talents.
• Unequal Market Shares of its Services: FIS relies on a few of its services for more than its other services. This makes them susceptible to losses if one of its major services fails someday.

Opportunities for FIS

• Moderate Growth Rate: Following a moderate growth rate in the business, a financial uptick and increase in client spending provide an opportunity for FIS to attract new clients and increase its share of the total industry.
• Expansion to Other Global Markets: The company is planning to expand to more developing countries as well as the Middle East nations too such as Abu Dhabi. This serves them as an opportunity to acquire a new customer base.
• Development of Technology: Since the FinTech industry is growing at a very rapid pace, there are advancements in technologies too. Using these kinds of technologies can increase efficiency and decrease cost.
• Green Government Drive: FIS can easily sell its services now to State and Federal Government Contractors.
• Social Media as a Customer Relation Tool: FIS should increase its social media presence not just to advertise its services but to directly communicate with customers.

Threats to FIS

• Shocking Controversies: In 2007, one of the employees at FIS stole the credit card, bank account, and other personal information from more than 2.3 million of FSI’s customers. This had led to huge controversies, class-action lawsuits against FSI and questions on FSI security. 
• Global Competitors: If FIS wants to expand their business around the world, they have to be careful of what policies they make or how they provide their services in the foreign market or how they market themselves, where already existing local banks are what the people trust in. 
• Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages which are being sent by competitors. It clutters up the space, which leads to losing out on customers. FIS is well versed and trying to adopt a variety of the latest digital marketing skills to get ahead of the competition. You must also check out these skills to achieve the same.
• Financial Risks: Because the company operates in several countries, it is subjected to currency fluctuations, which are exacerbated by the world’s increasingly volatile political climate in a variety of industries.
• Cyber Security: As we have seen the above practical happening, cyber security has been one of the major risk factors in the financial sector. It is a must for financial systems to have the ability to withstand this cyber-attack by increasing IT  monitoring and control.
  

Now that we have come to the end of this thorough SWOT Analysis of FIS. Let’s see the summation of this article in the conclusion.