Fintech: M&A In the Fintech Space Will Heat Up

April 3, 2020 | FinTech, News
https://dailyalts.com/wp-content/uploads/2020/04/57e8d14b4d50ac14f1dc8460c62c3e761c3dd6f85254794c7c2b78d4944a_640.jpg

One of the clear winners, if there is such a thing of the current economic situation, will be fintech companies. And we can expect to see a wave of fintech M&A as a result.

There was already a trend towards digital platforms in the financial services industry.

Now it’s just accelerating.

Even those who prefer a hands-on face-to-face meeting on financial matters are turning to online platforms. They have to do so. Many banks are only offering drive-through services. This means more complex transactions are moving online.

Why Fintech M&A Will Heat Up

The shift to increased digital use in financial services will also accelerate the fight between incumbent banks, brokerages, and insurance companies to capture market share in a new digital marketplace.

Underfunded startups will struggle. They lack the ability to spend billions of dollars a year like their larger financial counterparts. The smaller firms will also need to find funding sources to survive until economic activity begins to normalize.

Fintech companies also have to be very careful about execution risk right now.

Consider Robinhood, the online brokerage firm.

Their system failed as markets became disrupted by the spread of the coronavirus virus in the United States. The future of the firm is uncertain at best. Active traders are moving their accounts, and there may be lawsuits over lost opportunities due to recent outages.

I expect to see an increase in Fintech M&A activity as the crisis begins to come to a close. In fact, some players like Intuit are being aggressive in the face of this crisis. Consumer-facing targets appear to be the key market for the years ahead.

Many smaller fintech companies have great ideas and products, but they lack funding. As larger traditional finance and fintech firms are looking to increase their offerings, they will find it easier and cheaper to buy rather than build.

By: Tim Melvin

 

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Alt Insights

May 21, 2020

Venture Capital: British Startup Offers Travel Jaunts on the Never-Never

Venture Capital: British Startup Offers Travel Jaunts on the Never-Never
Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2020/05/screenshot-www.youtube.com-2020.05.22-14_27_32.png
Artificial Intelligence: Marty the Robot Hunts for Spills in Supermarket Aisles
May 26, 2020     Artificial Intelligence, News

Marty the supermarket robot is rather smart. Armed with three high-resolution cameras, computer vision, navigation systems, numerous sensors, and smart AI software, Marty is able to sidestep shoppers and pinpoint…

https://dailyalts.com/wp-content/uploads/2020/05/46090766321_9ae7b253d1_c.jpg
Venture Capital: The U.S. IPO Drought May be About to End
May 26, 2020     News, Venture Capital

As this is being written, the Dow is up nearly 600 points and the S&P 500 is above the psychological 3,000 mark. The markets are up as investors cheer the…

https://dailyalts.com/wp-content/uploads/2020/05/UBS_sign.png
FinTech: Swiss Banking Giant UBS Homes in on Fintech Investing
May 26, 2020     FinTech, News, Venture Capital

Swiss banking giant UBS Group AG (NYSE: UBS) is planning to invest hundreds of millions of dollars in upstart fintechs through a proposed corporate venture capital fund. According to a…

https://dailyalts.com/wp-content/uploads/2020/05/mumbai-886734_640.jpg
Digital Assets: In India, RBI Confirms No Ban on Crypto; CoinDCX Raises $2.5M; Crypto Volumes Fly
May 26, 2020     Digital Assets, News

The Reserve Bank of India, the Indian central bank, confirmed that there currently exists no banking ban on the crypto industry in India. CoinDCX, India’s largest cryptocurrency exchange, gained a…

Scroll to Top