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Aaron Silva

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Is Exclusive Marriage to a Partner Necessary Anymore?

Posted by Aaron Silva on Mar 3, 2020 10:30:24 AM

Buried deep in the fine print of your Core IT agreement is something called an “Exclusivity Clause”.  Most bankers don’t know it exists.  Most again don’t know what it means until they bring a competitive solution from a newer fintech to the relationship.  Bankers are surprised to find out that a vendor armed with the Exclusivity Clause (EC) has near total control over your destiny – at least for the next 5, 7 or 10 years.  Unless, of course. you are prepared to cough up 50%, 80% or even 100% of the remaining contract value to exit the service for greener pastures. This is completely unreasonable but it’s important to understand how we got here before we chart a course of freedom.

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Topics: Core IT Services, FIS, Jack Henry, Fiserv, Forbes

Forbes: FIS Retreats Under Pressure From GCC

Posted by Aaron Silva on Jul 18, 2019 10:38:59 PM

In late June, Forbes published an article on FISrecent attempt to unilaterally implement a new security surcharge on a select few of their clients without their permission (FIS has not stated publicly how many were targeted but GCC estimates there were 250-300 guinea pigs). These fees, costing several tens of thousands of dollars per client, were imposed because FIS stated it hadrecently improved its security infrastructure to address new threats and that they wanted to “partner” with their clients in sharing this expense. No explanation was provided as to exactly what these threats were or why they decided to deploy this tariff [now] and without the consent of their clients, even though each FIS client had already agreed to a security SLA guarantee in their existing agreements.

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Topics: Core IT Services, FIS, Jack Henry, Fiserv, Forbes

Wall Street Journal Ups Pressure vs. FIS, Fiserv and JHA Oligopoly

Posted by Aaron Silva on Apr 13, 2019 10:59:32 AM

The simmering of banker's discontent for the solutions and partnerships offered by the Big Three Oligopoly ("the BTO") of FIS, Fiserv and Jack Henry is now hitting a boiling point.  The Wall Street Journal on Friday printed an article titled: Frustrated by the Tech Industry, Small Banks Start to Rebel.  The Golden Contract Coalition and several of our member bank senior executives were consulted heavily on the research for this article.  Considering that most WSJ readers would have no idea what a "core IT" suppliers is - let alone their relationship with their community banks - writers were eager to report the injustice happening on our little industry island.  How could the free market and our government allow an entire industry to survive under the thumb of just thee powerful entities?...was fascinating to the WSJ and clearly warranted a front page, top-of-fold position.

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Topics: Core IT Services, FIS, Jack Henry, Wall Street Journal, Fiserv

Millington Bank Sues FIS Over Coercive Contract Tactics

Posted by Aaron Silva on May 8, 2018 11:16:02 AM

Selling a bank is hard to do and it appears even planning to sell your bank may be made even harder when your core IT supplier manufactures an exit barrier worth hundreds of thousands or even millions of dollars. Millington Bank ($565M assets), a New Jersey savings bank located in the Township of Long Hill, filed a law suit against Fidelity Information Services (FIS) in the Superior Court of New Jersey.

Millington alleges they were coerced to sign a seven-year amendment and extension to their core processing agreement in September 2015 on a "take-it-or-leave-it" basis. Vendors are smart and are trained to wait until their client has less then than 12 months of contract term remaining before they formally approach for renewal talks - thus creating a negotiations advantage because there is little time left to switch if the bank is unhappy.

Similar to the Millington situation, the bank had little time [then] to make a processing change - a process that can take 12 to 18 months - and so they signed FIS' standard form agreement. The complaint states that FIS insisted that "...every bank with whom FIS does business are required to sign this [standard] agreement..." and there was no negotiating option for Millington. Accepting this statement, the bank may have found solace (other bankers signing the same) and then signed anyway.

Fast forward a few years and the bank wishes now to potentially sell, and upon re-examining the addendum, the liquidated damages clause unfairly benefits FIS with termination fees for services that FIS will never actually deliver.  The complaint continues that one of the techniques deployed by FIS to coerce a customer bank into paying liquidated damages despite a dispute as to their legitimacy "...is a tacit or explicit threat to withhold the decommissioning, conversion and integration of data required by the merger or acquisition unless the customer bank commits to making the liquidated damages payments and then makes the payments upon the consummation of the merger." 

Millington finishes the complaint with a demand for the court to rule the termination fees inapplicable, illegal, unenforceable and void.

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Topics: About Golden Contract Coalition, Mergers, Core IT Services, FIS

Strength in Numbers: Banks Shift the Core IT Supplier Power Paradigm by Joining Forces

Posted by Aaron Silva on Mar 26, 2018 10:20:00 AM

Fiserv, Fidelity (FIS), and Jack Henry & Associates (JHA) control 85 percent of the core IT services processing for banks with less than $1B in assets and 93% of the market for those above. By any definition, they possess a market oligopoly. 

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Topics: About Golden Contract Coalition, Mergers

Silent Shareholders Bleed Out Bank Mergers

Posted by Aaron Silva on Apr 19, 2017 3:22:17 PM

Does your Bank increase fees for loyal customers when they bring you new business with other companies and depositors? Do Banks penalize their commercial customers when they merge with other companies, need more capital or financial services? The answer is obviously NO to both questions. Such treatment would be anathema to community banking customer service and relationship building. But unbeknownst to most bank leaders, your most critical vendor would answer YES if they were running your institution.

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Topics: Mergers

GCC Update:  FIS and Jack Henry move to engage, Fiserv drags feet

Posted by Aaron Silva on Dec 14, 2016 11:37:24 AM


The Golden Contract Coalition has engaged all three targeted Core IT suppliers FIS, Jack Henry and Fiserv in order to open negotiations on behalf of our vast membership of banks and credit unions. A lot has been learned as we work with each company. All suppliers share dismay as to why so many of their clients have joined the Golden Contract Coalition as members. Averaging $1.7 billion in asset size, GCC members range from $150 million to $10 billion in assets per institution and represent the collective leverage of hundreds of millions of dollars in contract value. Each supplier claims that they are fair to their customers and always willing to make ‘tweaks and changes’ to their master contracts and pricing. All feel they have the fairest and most balanced contract on the market, so joining an organization like GCC should not be necessary – right? Our advanced discussions indicate that they really don’t understand just how upset and disappointed their clients are with the lack of technological innovation; inability to hold suppliers accountable for SLA misses; exclusivity clauses that prevent bankers from making competitive technology choices; general contract one-sidedness and lack of any economic or contractual leverage during long painful negotiations at renewal time.

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When fintech isn’t accessible: The contractual quagmire of community bank technology

Posted by Aaron Silva on Sep 9, 2016 2:38:22 PM

We recently had the opportunity to interview with Tradestreaming, explaining the complexities and challenges that community financial institutions experience with their Core and IT vendors.

Read the article HERE to dive into the discussion around GCC:

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The Team Fighting for You

Posted by Aaron Silva on Jun 9, 2016 11:52:44 AM

While nailing down the specific goals of GCC, I quickly concluded that I needed to unionize institutions together into a collective, building an influential voice backed by their large combined contract values.  I also recognized the need to get some real horsepower behind us from a credible firm that knows the IT game at the highest and global levels.

I needed a firm that could look any Core and IT supplier in the eye and cite text-and-verse from the authoritative sources on just about any term, best practice or legal covenant imagined. When I met with Pillsbury LLP, I knew I had found just the team. 

Understandably, bringing in lawyers can be an alarming notion. However, to get the fairest contracts, it’s vital to bring in the experts. By combining forces with Pillsbury, GCC is unstoppable.

Introducing: Bob Zahler and Elizabeth Zimmer 

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Topics: About Golden Contract Coalition

Introducing the Golden Contract Coalition

Posted by Aaron Silva on Jun 1, 2016 10:00:00 AM


 The cost, business distraction and uncertain outcomes associated with renegotiating a Core and IT supplier contract can be monumental.

Bankers that go it alone are at a huge disadvantage. Institutions smart enough to retain professional assistance from a company like Paladin fs can do an incrementally better job for their franchise and cost structure by negotiating with information, pricing data and market intelligence in their corner.

Unfortunately, both of these negotiating positions are defensive – you have to do the best with what you have and where you are at that moment. A long and sometimes painful dance ensues - strategizing, maneuvering, threatening and attempting to outsmart the Core IT supplier - all the while knowing that the vendor holds most, if not all the cards.

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Topics: About Golden Contract Coalition

It's time to change the game

Community banks and credit unions have struggled for decades under the oppressive weight of the Core vendor goliaths. For the first time in history, the Golden Contract Coalition (GCC) puts the power into the collective hands of institutions to challenge the vendor oligopoly – ending the era of underperforming IT functionality, unenforceable SLAs, unfavorable contract terms and overpriced, one-sided deals.


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