John San Filippo
Jack Henry Connect 2022: CEO Foss Opens Show with Company Recap
By John San Filippo
On Aug. 2, 2022, Jack Henry announced a major rebranding effort, consolidating its Jack Henry Banking, Symitar and ProfitStars brands into a single Jack Henry brand. This new branding effort took center stage along with company CEO and Board Chair David Foss as he presented opening remarks at Jack Henry’s first major in-person event in three years, which kicked off on Aug. 29 at the San Diego Convention Center. The four-day event is also the company’s first major conference to bring community/regional bank and credit union people together under one roof.
Well-Rounded Financial Technology
Foss began his presentation standing in front of the new Jack Henry logo, which featured a new company tag line: A Well-Rounded Financial Technology Company.
“You may read that and go, duh. What's so revolutionary about that?” asked Foss, referring to the tagline. “The reason you're going to see that a lot more in the future is we recognize that our two largest competitors in this space [presumably Fiserv and FIS] have done really major shifts in the last couple of years to focus on merchant acquiring and really focus on building their payments business. We do a lot in payments at Jack Henry, no doubt about it, but we are not solely focused on the payments business. We are very focused on broadening the suite of solutions that we offer to you across the board.”
He added that while payments are clearly lucrative, Jack Henry is committed to meeting all the technology needs of community and regional financial institutions around the country. He then presented the audience with some key statistics to back up his claim that Jack Henry is a well-rounded financial technology company.
“We just celebrated 46 years in this industry – 46 years of serving community financial institutions in the United States. We're very proud of that milestone,” he continued. “So as you look at our company today, we are now 6,800 associates strong.” He noted that while the company offers four core platforms – three for banks and one for credit unions – Jack Henry also offers more than 300 other technology solutions.
“Sixty-seven percent of our core clients are now running in our private cloud environment,” he noted, saying that represents a significant and steady growth for hosted solutions over the past several years. He added furthermore that the company’s Banno Digital Banking platform now serves more than 7.7 million consumers.
“We finished the fiscal year [which ended June 31] at $1.94 billion in revenue,” he said.” This year, we will definitely have exceeded $2 billion in revenue as a public company.”
Pillars of Success
“As we run the company, we continue to lean on these three pillars of success,” said Foss, as the screen behind him showed graphical representations of employees, customers and shareholders. “As I point out all the time, they are listed in priority order. And I say this same thing whether I'm talking to a group of customers or talking to a group of investors, or certainly to our own associates.”
Foss went on to explain the thinking behind this prioritization. “If we have a great work environment for our employees and they’re happy to be at Jack Henry, they'll continue to deliver great service, deliver great technology to you all,” he explained. Regarding customers, he continued, “Our concept here is if we're delivering that great technology, delivering great service, you're going to buy more stuff from us. You're going to be happy. You're going to tell your friends about us. And that ultimately leads to the third here, which is our shareholders.”
Employees Come First
“One of the ways that we have to gauge how we're doing in the eyes of our employees are these ‘best place to work’ awards that we're winning pretty regularly at Jack Henry,” said Foss, referring to a display of several such awards on the screen behind him. He said such awards are gratifying for Jack Henry because the company has no way to directly influence them. In fact, the company often doesn’t learn of the award until after the winners have been chosen. And while he appreciates the many regional awards the company has received, he’s even prouder of the national awards.
“Just last month, we were recognized by LinkedIn as a top place to work and build a career in financial services,” noted Foss. “We were number six on that list. And the best news to me about that was we didn't even know the contest was going on.” He added that for the fifth year in a row, Jack Henry was named by American Banker as one of the top 50 fintechs to work, noting that Jack Henry’s major competitors have never made this list.
Committed to Core
Foss told the audience that Jack Henry is committed to reinvesting 14% of its revenue back into research and development (R&D). He said that based on conversations he’s had with several industry analysts, he believes this to be about double what Jack Henry’s competitors are reinvesting. He presented a list of major areas of R&D investment, the last of which was ongoing core enhancements.
“There’s one of thing I want to nip in the bud right now, because I don't want anybody walking out of here with any confusion on this topic,” he stated. “Yes, we are launching a tech modernization strategy. We've been talking about it for months. But we are continuing to invest at the same level we have in the past in our core solutions. And we will continue to support our existing core solutions for many years to come.”
He said that when the company announced its new strategy in February, rumors began to swirl among competitors that Jack Henry would soon force its customers to this new core platform. “That is not true. That is not what we're doing. We are continuing to invest in our cores and continuing to support our cores,” he stated adamantly, “for many many years to come.”
Finopotamus will continue to provide daily reporting from Jack Henry Connect 2022.