Banks and FinTech Acquisitions

Abstract

This paper investigates ex-ante factors influencing international bank acquisition of FinTech companies from 2010–2018. Using hand-collected data, we show that bank boards with a larger female presence as well as those that have CEOs with longer tenure are more likely to pursue FinTech acquisitions. The financial performance also matters as banks with greater capital strength and liquidity are more likely to be acquirers. In line with prior expectations, banks with higher IT spending, suggesting greater in-house development of digital solutions, are less likely to target FinTech acquisitions. In addition, younger CEOs and banks with lower IT spending are also found to be more likely to make multiple FinTech acquisitions. The nationality diversity in the boardroom matters for cross-border bank-FinTech deals. © 2023, The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.

Keywords: Bank acquisitions, Corporate governance, FinTech, International Banking