Resurgent Amdocs expands into banking market

• Published date: 23 May 2023
• Publication title: Globes (Rishon LeZion, Israel)

Since the start of 2023, Amdocs has risen by less than 10%, while the Nasdaq index is up 21%. But last year, Amdocs share price rose by 24% while the Nasdaq index slumped 33%

The company, led by CEO Shuky Sheffer, provides IT systems for telecom companies. Amdocs solutions allow telecom operators including mobile phone, landline and cable providers, to manage all operations and services with their subscribers. Amdocs has nearly 30,000 employees worldwide.

At a conference organized this week by Oppenheimer in Tel Aviv, Amdocs SVP & CFO Tamar Rapaport-Dagim spoke about the company's activities and new engines of growth, which are not in its traditional market. In recent years, Amdocs has been stressing the finance and banking market and has set up a business unit targeting this market, which is a type of fintech company within Amdocs. At this stage the company is providing any numbers or forecasts but it already serves large customers in the US and elsewhere. For example, Amdocs recently reported a collaboration with Bank Hapoalim in which its solutions enable the Israeli bank to quickly launch digital services for its customers.

Rapaport Dagim says, "We are looking beyond the telecom market, not necessarily as something that will lead to a leap forward in the next year or two, but more in a long-term perspective. The world of banking is relevant to us in terms of capabilities, we already have several dozen clients, and the momentum is good. We have not yet made a significant strategic decision on how to break into the market, and that means we will have to make an acquisition. This is one of the interesting areas for Amdocs over the next decade."

A boost from the banking crisis

Amdocs previously ventured into the financial market back in 2004, when it reported a contract with a large Dutch bank, and later served other customers in the field. However, today's activity is more strategic and less opportunistic in the market, and Amdocs has made acquisitions in areas that are of interest to banks, such as moving to the cloud. The goal is to help them modernize their systems in order to allow them to operate quickly in an industry that is undergoing disruption, with a rapid transition to digital, closing of branches and competition from fintech companies. Amdocs sees itself as having experience in the field in the disruptions that have happened to the telecom industry, therefore in believes it will be able to do the same in banking, thus significantly...