Bancolombia has formed a new tech-based partnership with Atlanta-based First Data to improve its transaction processing. Colombia’s largest bank says the goal of the relationship is improve merchant access to the banking system while improving the security and efficiency of transactions.
“We are always aiming to improve our product and service portfolio,” said Bancolombia President Juan Carlos Mora Uribe, adding that “we will always seek partnerships with the best in the world.”
The reliability of Bancolombia’s technology has come under fire recently. After repeated reports of transaction failures and processing interruptions, the nation’s financial regulator mandated that the bank must make improvements and cover the related costs incurred by customers.
On July 5, the Superintendencia Financiera ruled that Bancolombia must improve its business continuity plan to deal with tech failures, hire an external auditor to identify the specific causes of the repeated problems, and improve communication efforts to inform clients when issues do arise.
First Data has a major presence in the credit-card processing market in Brazil and has been a player in Colombia since 2009. It sees this alliance with the Medellín-based bank as a big step forward in the market.
“We are committed to investing in Colombia, a strategic market that represents huge potential for our company given that the use of debit and credit cards still has relatively low penetration,” said Gustavo Marín, executive vice president of First Data for Latin America.
First Data went public in mid-October 2015. Though it earned some $2.8 billion USD in the IPO — the largest of the year, per the Wall Street Journal — its share price came in below market expectations amid a difficult climate. The firm then watched its stock fall steadily in the next seven months. But it has been experiencing a rebound over the past month, particularly since reporting strong second-quarter results this week.
According to the Wall Street Journal, the company posted a second-quarter profit of $152 million USD — a vast improvement over its $26 million USD loss during the same period in 2015. Barclays analyst Darrin Peller told Bloomberg that the firm’s bottom line results beat “both our model and the street on strong expense management.”
Nearing the end of trading today, First Data’s stock was up from just $10.75 USD per share on July 5 to $12.89 USD. It hit a high of $13.18 USD during intraday trading earlier this week, its best showing since April.
Photo: A Bancolombia branch in the Colombian capital of Bogotá. (Credit: Jared Wade)