In its latest report on the financial technology sector, law firm Simmons & Simmons expects to see strong growth in M&A activity over the next year and a half.
The firm surveyed 200 senior level respondents (30 percent at c-suite level) across five financial centres to investigate why most large institutions in the financial services sector are struggling to innovate quickly enough.
According to the report titled «Hyperfinance» almost one third of financial institutions plan to acquire a fintech firm in the next 18 months.
Regulations And Culture
While acquiring a ready made fintech firm could go some way to addressing the innovation challenge, of those not pursuing an acquisitions strategy, 45 percent state that concerns about regulatory risk is holding them back, while 41 percent cite culture clash as a deterrent against M&A.
«Major financial institutions are increasingly looking at making FinTech acquisitions as a way of accelerating the adoption of new technology and innovation in their businesses,» said Khasruz Zaman, M&A partner at Simmons & Simmons.
