Fintechs weigh benefits of banking licence versus M&A

Author: Jimmie Franklin | Published: 26 Jul 2019

Fintech companies are weighing up the benefits of obtaining a banking licence in the current political climate or going one step further and merging with a bank.

This would contrast with previous trends, as established banks such as Goldman Sachs and Societe Generale both acquiring more than one fintech start up in 2018.

"The first-mover fintechs have got firepower from funding rounds, built scale and tested their technology," said White & Case partner Hyder Jumbahoy. "The next logical step is to start bringing their service providers in-house."

Jumbahoy suggested one way of doing that would be joint venture partnerships with service provider banks. "The next logical step, if you want a banking licence and you can afford it, is to buy an existing bank," he added.


Players in the fintech industry are divided over whether companies should begin buying their banks;Some fintechs are "effectively new banks" without the...