Callum Turcan, Research Analyst and M&A Writer - Corum Group
M&A activity in the FinTech sector remained robust during the first half of 2024, with strong demand from both strategic and financial buyers. As the world continues to shift away from cash and towards other payment options, including card, online and mobile wallets, acquirers are eager to grow their exposure to this space.
Financial institutions, both traditional and disruptive firms, are constantly investing in their technological capabilities to remain competitive. The six trends driving M&A activity in the FinTech sector in 2024 are anti-money laundering tools, AI, Wallet-as-a-Service, compliance, digital identity authorization and mobile banking services.
Starting with our first trend, anti-money laundering tools. Companies must comply with strict anti-money laundering regulations to avoid massive fines. Illustrating this trend, Beaufort Solutions, a financial platform that offers anti-money laundering services, was acquired by BankID Norge [Nor-ga] in June 2024 to expand into new markets and enhance its product suite.
Moving on to our second trend, AI. This technology generates actionable insights and automates routine and complex tasks. Showcasing this trend, Hyperplane, an AI-powered data intelligence platform for financial institutions, was sold to Nubank in June 2024 to offer its clients more personalized financial products and services.
Pivoting to our third trend, Wallet-as-a-Service. Owners of cryptocurrencies use this technology to store, use and trade these alternative assets. Highlighting this trend, Multis, a developer of a decentralized cryptocurrency wallet, was bought by Safe in April 2024 to leverage their collective expertise to enable users to better manage assets across various blockchain networks.
Shifting to our fourth trend, compliance. The financial services market is one of the world’s most regulated, and modern solutions are required to stay on top of changing rules and regulations. Illustrating this trend, Corlytics, a provider of financial regulatory and compliance management SaaS, secured a majority investment from Verdane in April 2024 to support growth at the company.
Our fifth trend is digital identity authorization. Enterprises must ensure that only authorized users are accessing sensitive financial data and bank accounts. Showcasing this trend, Accertify, a developer of digital banking software that includes identity and access management solutions, was purchased by Accel-KKR in May 2024 to accelerate product innovation.
Lastly, our sixth trend is mobile banking services. Consumers increasingly expect to be able to conduct various financial activities on their mobile device. Highlighting this trend, Coinless, a provider of mobile payment software for car washes, was acquired by EverWash in May 2024 to expand its market reach and enhance efficiency.
Managing evolving consumer preferences and the ever-changing regulatory landscape requires modern tech solutions. FinTech companies that map to any of these six trends are seeing a lot of interest from buyers who are sitting on trillions that they must deploy. The proliferation of AI is having a major impact on the sector, and we are in the early innings of this change.
