M&A Trends & Issues

FinTech is redefining the manner and pace in which financial products and services are delivered. The COVID-19 pandemic, in particular, has accelerated demand for digital products and services in fundamental ways and put in sharp relief the extent to which FinTech presents challenges and opportunities for traditional banks.

Shearman & Sterling’s FinTech Foundry teamed up with FinTech advisor and incubator Rise, created by Barclays, and premier market data provider S&P Global Market Intelligence, to produce a mid-year report on M&A activity in the US FinTech sector. This report provides an overview of FinTech deal activity, discusses its drivers, and offers insights into how financial institutions, FinTechs, and investors can prepare for transactions in the remainder of 2021 and 2022.
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Key Themes and Trends in the Report

 

• Deal Players in FinTech M&A—The arena of FinTech M&A, partnerships, and investments is comprised of a diverse set of players with different aims. We briefly break down the key players and their motivations. Read more.
• Preparing for the FinTech Consolidation Wave: 10 Things to Consider—A review of the top 10 legal and regulatory issues for FinTech M&A transactions. Read more.
• Spotlight on Bank Acquisitions and Charters—For FinTechs that seek to go “all in” on banking and look beyond bank partnership arrangements, there are generally two options: acquire an existing bank or establish a new one. Read more.
• Spotlight on Bank Partnerships: The Staying Power of the Bank Partnership Model—Innovation is at the heart of financial services. Traditionally, banks used one of three models—buy, build, or partner—when some form of technology innovation is identified as a solution to a business need. Read more.
• Spotlight on SPACs—One of the most noteworthy developments in M&A transactions in 2020 and 2021 has been a significant increase in the number of private companies, including many FinTech companies, combining with special purpose acquisition companies, or SPACs. Read more.

   

FinTech Deal Volume in the US and UK (Excluding SPACs)

Key contacts

   

About the Contributors

This report was prepared by Shearman & Sterling LLP; S&P Global Market Intelligence; and Rise, created by Barclays. Shearman & Sterling actively advises on all aspects of the M&A process and frequently helps banking organizations, FinTechs, and investors to navigate the dynamic regulatory and competitive FinTech landscape. S&P Global Market Intelligence’s FIG Research team provides independent forecasts and real-time analysis of the banking, insurance and financial technology sectors, across multiple geographies. Rise, created by Barclays, is a global community of the world’s top innovators and entrepreneurs working together to create the future of financial services.