Yesterday, Accenture plc (ACN) clinched a deal with Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). Per the terms of the deal, Accenture will provide its Alnova Financial Solutions technology platform to help develop the core banking system (CBS) in BBVA’s U.S. banking subsidiary.
Banco Bilbao Vizcaya Argentaria provides financial services, which includes retail banking, asset management, private banking and wholesale banking businesses, across the world.
With the help of Accenture’s core banking solution, BBVA’s subsidiary, BBVA Compass will be able to establish process banking operations more quickly, which will help to retain customers and also improve the efficiency of its product marketing.
Core banking systems form the backbone of a bank’s IT infrastructure. Under this system, unified banking services are provided by a group of networked bank branches. Bank customers can access their funds and make other simple transactions from any of the member branch offices.
Accenture’s Alnova Financial Solutions is a core banking solution, which is owned by its subsidiary Alnova Technologies Corp. The solution will deliver real-time bank processing capabilities and support increased transaction volumes for BBVA Compass while streamlining and enhancing the bank’s risk management functions.
Accenture’s core banking solution has already been used by BBVA in its operating units spread across nine countries. This recent agreement furthers the relationship and we believe that the need for CBS will increase the demand for Accenture’s banking solution.
Accenture has seen successes across various industrial sectors as well as geographical regions. Recently, the company won a 5-year consulting and outsourcing services contract from CEVA Logistics and a 2-year information technology services contract from Israel Electric Corporation.
Accenture also received a 5-year Procurement Transformation contract from the City of London Corporation to develop required shared service centers to reduce procurement costs. Moreover, Consip, a public company owned by the Italian Ministry of Economy and Finance awarded Accenture a four-year, $6 million contract to set up an eProcurement system to increase efficiencies and ensure value for money across suppliers.
We are positive about Accenture’s improving business trends, as evident from the healthy growth in revenue and bookings in its fiscal third quarter. However, the recent economic turmoil in Europe and competitive pressure from IBM Inc. (IBM) could considerably rationalize Accenture’s growth prospects.
Accenture has a Zacks #2 Rank, implying a short-term Buy recommendation.
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