FinTech Futures: Top five stories of the week – 17 February 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
FIS reveals plans to spin off merchant business unit
US banking and payments technology giant FIS has announced plans to spin off its Merchant Solutions business as it looks to “strengthen its strategic and operational focus, capitalise on growth opportunities and unlock shareholder value”.
FIS announces plans to spin off its Merchant Solutions business
FIS says uncoupling its merchant business, which mainly consists of payments software arm Worldpay, will give the separate companies “greater strategic flexibility and operational focus”. The firm adds both companies will maintain a “strong commercial relationship”.
According to a report by Reuters, the firm will also consider acquisition proposals for the spun off business. Worldpay was acquired by FIS for around $43 billion back in 2019.
Current FIS CEO Stephanie Ferris joined the company via that Worldpay acquisition. Ferris was appointed as president in February last year and took over as CEO from Gary Norcross on 1 January 2023. The company has since embarked on a cost-saving job cutting spree, axing thousands of jobs following a slump in the company’s share price over 2022.
NatWest Group snaps up UK fintech Cushon for £144m
NatWest Group is set to acquire an 85% stake in UK-based workplace savings and pensions fintech Cushon in a deal worth £144 million.
The acquisition will enable NatWest to offer its commercial customers and their employees a new suite of financial wellbeing products as the bank looks to “help meet customers’ changing needs at every stage of their lives and support greater financial resilience”.
Cushon, whose stated mission is “to lead a tech-revolution of UK pensions” whilst having “a positive impact on society”, offers pensions and savings products via a mobile app.
Its Master Trust workplace pension offers an investment strategy built to drive down the financed carbon emissions of customers, with a focus on sustainability and social impact. The fintech also offers financial education services and one-to-one financial check-ups to employees.
Finastra reportedly looking to sell banking business
Finastra, an international banking, financial and payments technology heavyweight, is looking to offload its banking unit, according to Reuters.
Finastra ponders the sale of its banking business
The London-headquartered company, which has grown over the years via mergers and acquisitions – picking up the likes of banking tech veteran Misys; Thomson Reuters’ treasury capital and risk management software business; Canadian payments and lending tech provider D+H; and US-based digital banking vendor Malauzai, among others – has been known as Finastra since 2017.
According to Reuters, Vista Equity Partners, which has owned Finastra and its key component predecessors for over a decade, is exploring the sale of its banking portfolio for as much as $7 billion.
It is carving out the “universal banking” business that will house core and digital banking solutions for banks and credit unions, which it believes can appeal to other venture capital and private equity firms as well as technology companies.
Zopa acquires DivideBuy in “BNPL 2.0” push
UK fintech unicorn Zopa has made its first acquisition, snapping up e-commerce credit solutions provider DivideBuy as it looks to deliver “BNPL 2.0”.
Financial details are undisclosed and the deal is set to be completed in the next few months. The move will enable Zopa users to spread the cost of larger purchases worth between £250 and £30,000.
Zopa says its buy now, pay later (BNPL) offering will run credit checks and affordability assessments, share data with credit agencies, enable the creation of credit profiles and help customers structure and pay off their debt.
It will also provide instant decisions and combine “fully integrated” consumer journeys with consumer protection and the safeguards of a regulated bank, Zopa says.
Global fintech investment drops 31% in 2022 from record 2021 high
Global fintech investment fell in 2022 to $164.1 billion from a record high of $238.9 billion in 2021, a drop of 31%, according to consultancy KPMG’s Pulse of Fintech H2 2022 report.
Global fintech investment fell in 2022 according to KPMG
Despite the drop, it was still the third-best year for fintech investment ever and the second-best year for deal volume.
Global fintech investment dropped by more than 50% in H2 2022 compared to H1 2022, from $119.2 billion to $44.9 billion, reflecting a “sharp drop-off” in large deals.
KPMG says 2022 was a “challenging year” for fintech investment globally, with the Americas in particular hit hard. The region saw a $40 billion drop in investment compared to 2021.
However, deal volume was “incredibly robust” in 2022, the report notes, while seed deals saw record investment, “which bodes well for the long-term fintech pipeline”.
