Consolidation continues at pace—mega-mergers on the horizon
The wait is over. Whispers of mega-deals have matured into agenda items for boards of many larger European banks.
As global fintech funding in Q1 2019 approaches US$6.3 billion, London is poised to rival San Francisco as stable to the highest number of unicorns.
Established European financial institutions have joined the fintech race, hoping to harness the promise of technology—a smooth, tailored and safe consumer experience, available everywhere and to everyone. However, innovation is expensive, absorbing valuable resources at a time of unresolved trade concerns, fragmented markets, political uncertainty and unknown Brexit impact.
Do fintechs justify such high valuation multiples? Can fintechs really deliver the seemingly endless possibilities? Would resources be better allocated elsewhere?
In this series of biannual reports, we analyse inorganic investment strategies and highlight the key M&A trends across Europe and the UK in H1 2019. Focusing on banks, fintech, and other financial services (i.e., asset/wealth management, market infrastructure, consumer finance and Specialty finance), we also provide our insights into the outlook for H2 2019 and beyond.
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
Rapid rise of mobile commerce, e-commerce, growing merchant/ consumer familiarity with non-bank providers and accessibility by under-banked communities are all driving demand for electronic payments. It is no surprise that M&A levels have reached stratospheric heights, and show little sign of descending
Financial institutions M&A sector trends: payments — H1 2019 and outlook for H2 2019
Very high levels of M&A activity to continue, notwithstanding high asset valuations. Investor confidence fuelled by growing consumer demand for mobile payments—growth is expected at a rate of 33% p.a. between 2019 and 2026.
In Q4 2018, payments M&A registered the fastest quarter-on-quarter growth across the financial services sector*
Mobile Payments Market is expected to grow at an annual rate of 33% between 2019 and 2026, reaching US$457 billion by 2026**
In 2018, approximately 50% of UK adults used mobile banking and 1 in 10 now chooses to live a near-cashless life***
Financial services technology company FIS has joined forces with digital payments platform Worldpay. The US$43 billion acquisition is the biggest deal ever in the international payments sector
This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2019 White & Case LLP