Jack Henry (JKHY) Boosts Portfolio With Fraud Detection Platform
Jack Henry JKHY unveiled Jack Henry Financial Crimes Defender to combat financial crimes across various banks and credit channels.
Notably, the cloud-native fraud and anti-money laundering solution enhances financial institutions' risk decisions, operational efficiency and compliance with the Bank Secrecy Act.
Further, the new AI-powered solution offers real-time fraud detection and prevention for financial institutions, enabling seamless integration of third-party data and preventing transactions before they leave the institution or appear in clients' accounts.
We note that the new launch enables financial institutions to innovate faster, differentiate strategically and meet evolving accountholder needs.
Jack Henry is expected to gain solid traction across banks, credit facilities and other financial institutions on the back of its latest move.
Jack Henry & Associates, Inc. Price and Consensus
Jack Henry & Associates, Inc. price-consensus-chart | Jack Henry & Associates, Inc. Quote
Strengthening Product Portfolio
The latest move indicates the company's growing emphasis on strengthening its overall portfolio offerings.
Apart from the latest launch, Jack Henry launched Payrailz Fraud Monitor, an AI-based feature for real-time fraud detection in P2P, bill payments and A2A outbound external transfers, supporting customizable features.
Additionally, the Payrailz Fraud Monitor uses AI and machine learning to detect and weigh multiple fraud attributes, generate actionable scores for each payment transaction and mitigate payment fraud, including account takeover, by continuously learning and adapting to unique risk tolerances.
Moreover, the above-mentioned endeavors position the company well to gain a solid footing in the global fraud detection and prevention market.
Per a Fortune Business Insights report, the global fraud detection and prevention market size is expected to hit $43.97 billion in 2023 and reach $182.66 billion by 2030, exhibiting a CAGR of 22.6% between 2023 and 2030.
Strength in the booming fraud detection market will aid the company in winning investors’ confidence in the near term.
However, mounting expenses and lower deconversion revenues continue to remain concerns.
JKHY shares have lost 15.8% in the year-to-date period compared with the industry’s decline of 20.8%.
Expanding Customer Base
A strengthening product portfolio will likely continue to aid Jack Henry in gaining strong customer momentum in the days ahead.
Notably, Carver Federal Savings Bank picked Jack Henry as its technology partner by implementing the new Financial Crimes Defender solution to combat fraud, enhance efficiency and reduce risk, allowing staff to make smarter decisions.
Further, Jack Henry was picked by Saco & Biddeford Savings Institution, a mutual savings bank, to modernize its technology infrastructure and expand small business banking.
We note that an expanding customer base is likely to contribute to the company’s top-line growth in the upcoming period.
For fiscal 2024, Jack Henry expects GAAP revenues in the band of $2.208-$2.229 billion. The Zacks Consensus Estimate for the same is pegged at $2.21 billion, implying year-over-year growth of 6.5%.
Zacks Rank & Stocks to Consider
Currently, JKHY carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Dell Technologies DELL, Applied Materials AMAT, and Arista Networks ANET. While Dell Technologies sports a Zacks Rank #1 (Strong Buy), Arista Networks and Applied Materials carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dell Technologies shares have gained 68.8% in the year-to-date period. DELL’s long-term earnings growth rate is currently projected at 12%
Shares of Applied Materials have gained 46.6% in the year-to-date period. AMAT’s long-term earnings growth rate is currently projected at 6.10%.
Arista Networks shares have gained 61% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 18.75%.
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