Fiserv-Overview of Strategic Plan

Fiserv-Overview of Strategic Plan

Executive summary

Fiserv, an upcoming BNPL, will be set up when the opportunity for the sector’s growth through the platform will be available. Collaboration between Fiserv, banks, and merchants allows clients to access loans at the point of sale. These loans are expected to increase the clients’ purchases and the merchants’ sales and ensure a reduced cart abandonment rate. The opportunity has various risks related to default rates that could harm businesses and an individual’s credit rating. A series of proactive and reactive strategies to mitigate the threat exists.

Implementation plan

Fiserv is highlighted as the suitable brand for implementing the BNPL financial business framework. The data obtained through secondary sources review highlights that other BNPL platforms are already successful. These platforms are in multiple countries, such as the USA, Germany, Australia, and Japan. The data confirms that a gap encourages players to join the BNPL sector through start-ups or acquisitions. This gap is present due to younger generations’ lack of access to credit cards, whose creditworthiness is insufficient for companies such as Visa and other credit card issuers (Lacey, 2021). Therefore, BNPL is a model intended to enable the creation of a credit history for various individuals. However, this model is not without criticism, as different people highlight the lack of meaning in splitting debt into several repayment periods, while at least 45 percent of people with credit cards pay their debts fully each month. Such criticisms highlight the target market that Fiserv will target upon set up, the 27 percent who tend to hold their debt a little longer (Shevlin, 2022). This means that most credit card holders do not need these services. In addition, those without credit cards can access the service and start to build a reputation around credit.

Costs

The costs associated with the implementation of Fiserv are variable. Firstly, establishing a physical building that houses the company is essential. This location could initially serve as the headquarters host of employees and clients. Secondly, Fiserv also requires employing individuals to serve clients needing BNPL services. Thirdly, the company needs to secure the necessary licenses to conduct the business. Finally, the company needs to set up frameworks that enable collaboration with the respective credit card providers to ensure they access the clients who need the services and their information regarding creditworthiness. The labor, taxation, licensing, and overhead costs will be repetitive periodically. These costs are likely to impact operations significantly. The variable and constant costs will influence the profitability of the company. If the prices increase, the profits will potentially diminish and vice versa.

Risks

The main risk that exists in the market is the likelihood of defaulting the payments. This could endanger the sustainability of Fiserv. Defaulting on the loans could lead to the withdrawal of merchants from the arrangement. In addition, the default could also negatively affect the merchants’ business, especially for start-ups, leading to closure or losses. Fiserv could also lose its employees due to insufficient funds to pay their salaries.

To mitigate against these risks, it is necessary to ensure that all clients have a credit rating with their banks. Fiserv could require employers’ information for clients without bank accounts or a credit rating. Furthermore, Fiserv should ensure that consumables are not financed through this option. This eases the process of recovering the items after defaulting over a certain period. Offering transport services to high-risk clients and providing information regarding a defaulter’s physical location should be mandatory. Finally, clients should be required to provide guarantors and their bank details. These punitive measures are necessary to avoid clients who may plan to default. The proactive measures included reminding clients to make payments on time or gradually and assessing the client’s ability to pay for specific items before purchase.

Challenges and opportunities

The main challenge that Fiserv will encounter is the risk of dealing with clients whose creditworthiness is not favorable or non-existent. The company will be compelled to set up frameworks that enable debt collection after the set period. The foremost opportunity revolves around the high growth rate for BNPL’s players. More individuals are embracing the concept (Frontier, 2021).

Summary statement

Establishing Fiserv is an economically viable decision because BNPLs have shown significant potential for growth. Fiserv will cater to the market segment that lacks access to credit cards, has a relatively poor credit rating, which they could improve, and those who lack access to credit. However, the same market segment presents significant risks due to the likelihood of a higher default rate. However, Fiserv plans to proactively ensure that the clients pay their loans in good time to avoid the loss of merchants and the collapse of businesses. Additional reactive measures are also highlighted to enable item recovery or complete payments.

References

Frontier. (2021). Thought leadership and insights from Frontier. The Frontier Line(185).

Lacey, R. (2021). Buy now, pay later versus credit cards.

Shevlin, R. (2022). Buy Now, Pay Later: The New Credit Card Acquisition Channel. Forbes.

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

The third component of your Board Brief is an overview of your strategic plan. The purpose of the resume is to give Board members a preview of the fundamental changes you will make to implement your project and explain how these changes will impact the organization. This information enables your Board to come to the meeting better prepared and to ask more informed questions. Your overview must be clear and complete enough to make sense, but it should not be overly wordy.

Fiserv-Overview of Strategic Plan

Your instructor will review your strategic plan and provide comments and questions to help you strengthen your presentation. You will be given these questions before your presentation and expected to address them in your delivery.

Instructions

1. Building on your previous submissions, include an additional 3 to 4 pages to take the analysis work you have done in the first two assignments and turn it into an actionable
2. A practical plan overview will include:
3. A clear and compelling opening statement (executive summary) explaining the strategic initiative
4. A high-level outline of your implementation plan, including costs, impact on operations, ROI projections, competitive advantage, and risks associated with the program, along with your mitigation plans
5. A reminder of the challenges and opportunities facing the organization and how your proposed plan will address these
6. Enough information allows Board members to prepare for the upcoming meeting and formulate additional questions.
7. A summary statement recapping why the proposed strategic initiative is necessary and the approvals being sought at the upcoming Board meeting

Consider these questions: why does the data apply to Fiserv more than JP Morgan or Visa? BNPL has risks (big ones) and opportunities (also significant). What about Fiserv makes it exceptionally well equipped to manage the risks and realize the opportunities?