In an interview with S&P Global, White & Case partners Patrick Sarch and Hyder Jumabhoy comment on the shift in focus of private equity and venture capital firms to a new set of subsectors that aim to either disrupt or improve the function of banks and financial institutions following the success of European financial technology investments in areas such as payments.
"In the first epoch of fintech, payments was where it was at," said Sarch, adding that sponsor investment in the European fintech space has now moved into its second phase as firms have expanded their focus.
Jumabhoy said advanced data analytics and regtech make for clear investment opportunities as they are "easy to sell." Banks and other financial institutions that are actively seeking customer monitoring and reporting present a ready market for those services and may look to acquire these businesses once they have gained scale, creating an exit opportunity for sponsors, he added.
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