How Do Banks Invest in Fintech? Empirical Evidences Around the World
Posted: 25 Oct 2019
Date Written: October 9, 2019
This paper investigates how banks react to digital transformation outsourcing innovative activities. We provide evidence on the drivers of investment in FinTech firms (FCTs) made up by banks especially in terms of deal and investors characteristics. We also asses the grade of the investment discriminating for equity stake or acquisition. Using a unique sample of 1,198 rounds of worldwide investment in FTCs in which banks participated between 2008 and 2018, we find that the FTCs attract increasing amount when investor is a listed foreign located investment bank and it depend on previous amount already financed. The strategy of bank seems to be to invest in FTC which provide financial services, but this is no longer true in Emerging Market suggesting that bank seeks to cooperate investing in complementary activities.
Keywords: Fintech, Banks, Digital Transformation, Outsourcing, Investment
JEL Classification: G21, G30, O31
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