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Stampede of the unicorns - new trends in Financial Sector FinTech M&A activity

July 17, 2019 | FinTech
Provided by White & Case
Stampede of the unicorns - new trends in Financial Sector FinTech M&A activity

H1 2019 has seen European FinTech M&A hit new heights.

FinTechs have enjoyed funding support from established financial institutions, financial sponsors, sovereign wealth funds, data giants and family offices. The next 36 months will be pivotal in identifying fintechs which will revolutionise financial services.

In our new Stampede of the Unicorns report we highlight how FinTechs are trailblazing the European M&A landscape. Notably:

  • Banks are embracing digital transformation through multi-channel investment strategies
  • Financial sponsors spur the pace of M&A—from start-up support through to late-stage private equity investment
  • FinTechs with critical mass are building scale through acquisitions and JVs

Key Trends 

Amid this activity we believe there are a number of key trends to watch. 

Thinning of the herd - the FinTechs with sustainable customer demand, scalability and continuous innovation will fend off challengers and survive - even as they maintain high business standards and without compromising quality. Those that don't will fail.

The outsourcing by banks to FinTechs of discrete compliance and tech functions is set to grow

There will be increased regulatory scrutiny and intervention relating to KYC, AML, ABC, anti-fraud and financial crime prevention compliance standards

Banks and other established lenders will look to monetise and unleash untapped data troves to challenge the challenger banks even as they come under press from activist investors and other key stakeholders to generate returns from expensive innovation projects

We'll see continued competiton beween national governments/regulators across Europe to attract and retain fintechs (e.g., London, Berlin, Amsterdam, Copenhagen, Dublin, etc.) Amid this activity will London be able to hold on to its crown as the European fintech capital post-Brexit?

Read the full report in the Knowledge Bank

 

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