Question

Introduce about fintech, and why do banks acquire fintech companies?

Is it possible that banks with low level of profitability acquire fintech companies to keep up profits?

What drives this upsurge in M&As?

Answer 1

Introduction of Fintech- Fintech is a actually a combine word of "Financial Technology'. It refers to software and other modern technologies used by businesses that provide automated and improved financial services. The fast and innovative progresses such as mobile payments changed the way we manage the finances.

It is used to describe new tech that seeks to improve and automate the delivery and use of financial services . It helps companies, business owners and consumers better manage their financial operations and progresses.

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Banks are acquiring Fintech companies. It simply prompts the use of digital technology by startups to come up with innovative products and services such as mobile payments, alternative finance, online banking big data and overall financial management..

Instead they prefer services that are quick and safe.

Fintech 24/7 access offers services available via non- traditional channel such as social media, empowering customers to a great extent. By 2020, social media will be the primary medium to connect engage, inform and understand customers ( from the mass 'social mind' to the minutiae of each and every individual) as well as the place where Customers research and compare banks offerings.

Over the next 5 years, channel diversification will be a key driver in the banking sector. More than 90% of banks growth in the usage of mobile application much higher than any other financial sector.

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As per my opinion, banks which have low profitability should adopt Fintech for sure. It would be helpful for increasing Customer approach, 24/7 accessibility of service provided by bank, improved financial services and offerings by bank.

Low profitability bank can increase their business and better manage their customers. Now a days noone wants to stand in a queue for availing the banking service. They think that this a complete wastage of time.... Fintech helps consumers for saving their precious time.

...Many factors are driving FinTech deal making as well as rising asset valuations. There is a growing acceptance of digital banking, payments and financial data services among consumers and businesses. Corporate and financial investors are targeting FinTech in order to streamline back office operations, improve their digital customer experience and cut costs.

By entering strategic partnerships with specializi external organization, they can drive digital transformation.

The future for FinTech M&A looks robust, though there will be challenges along the way. When acquiring a FinTech company , buyers need to consider cultural integration and regulatory concerns. They must be willing to introduce new cultural norms and adopt a fresh mindset to effectively integrate a FinTech organization.