It’s December 2020 - do you know where your vendors are?
Consolidation happens. Much of the time, like taking a chess piece, it can happen quietly, but with game-changing implications. Recently however, the size of the pieces taken among financial services vendors has raised some eyebrows - especially for their bank and credit union customers. The impacts of these moves can be positive...or not...which is why SRM keeps an eye on the board for these types of events.
2019 was a record year for fintech deals, mergers, and acquisitions - then along came 2020. The complications brought on by the pandemic did not create a lull in M&A. In Q1 of ‘20, Visa announced the acquisition of Plaid. Visa positioned the acquisition as “both an entry into new businesses and complementary enhancements to Visa’s existing business, putting them at the epicenter of the fintech world.”
Another well-known service provider, Verafin, announced in Q4 of ‘20 that they would be acquired by global technology giant Nasdaq. In a statement, Nasdaq said the agreement between the two companies will combine Verafin's products with Nasdaq's international reach to make them a global leader “in the fight against financial crime.”
Myron Schwarcz, along with input from other SRM subject matter experts, provided a list of industry acquisitions which has been used to create an SRM Academy infographic. This educational resource provides a timeline-based perspective of vendor consolidations that took place from 2017-2020.
We hope you find this resource useful in both its snapshot of the past as well as the possible direction offered about future such activities.
The Bottom Line: While the rising trend of consolidations is not new to the financial services industry, the sheer size of the players involved continues to remain significant. Further, these mergers and acquisitions materially reduce the breadth of the playing field - meaning fewer service providers and potentially less leverage for those seeking to reduce costs during a crisis.
For the full timeline of (what we consider) the most significant acquisitions to our business since 2017, download our free infographic:
For more resources on the above topic and others related, visit SRM Academy – we recommend:
- Level the Playing Field when Negotiating Long-Term Vendor Contracts
- Preparing for the New Normal in Your Card Network Agreements
- Unlocking the Value of Small Business
- COVID-19 Impact on Financial Institutions – SRM Survey 1
- There is Nothing Normal About Any of This – SRM Survey 2
- Are You Prepared for the Next Wave of Payments Disruption?