Bigwigs circling for fintech quarry as pandemic turns off cash tap

Singapore

ANALYSTS expect a stronger appetite from corporate and tech bigwigs in acquiring fintech startups in the months ahead, especially as fintechs tight on cash have a viable product to add to these larger entities' existing offers.

Indeed, a Fitch Solutions report this month said the Covid-19 pandemic will lead to lower levels of funding for fintech players.

"The greatest short-term risk that will impact fintech players is a freeze in funding," the report said.

"In the probable scenario of a sustained economic recession, investors might be keen to offload stakes in fintech companies which appear unlikely to turn profitable under current market conditions," the report said.

But this also means that acquisitions are a trend to watch, as tighter funding avenues for fintech companies will likely narrow their competitive advantages over more traditional financial institutions, which are usually be…