• Potential Pitfalls and Regulatory Aspects of FinTech M&A
  • February 20, 2017 | Authors: Daniel Serota; Alex Shoaff
  • Law Firm: Greenberg Traurig, LLP - New York Office
  • The term “FinTech”-or financial technology-refers to a number of different types of services. From digital currency to mobile payments and money transfer services, the term encapsulates a variety of online payment services. FinTech also reaches into the financing sector, as both crowdfunding and peer-to-peer lending services have become viable alternatives to traditional financing for certain parties. Additionally, the advent of robo-advisors (online wealth management services which provide automated, algorithm-based portfolio management advice) shows FinTech’s application in the investment advisory space. In 2015, global investment in FinTech exceeded $19 billion and based on early figures for 2016, investment is on pace to exceed 2015 levels as new technologies and players continue to enter the market.

    While funding levels make clear that FinTech is becoming the hot new investment, the rapid growth of the industry and the increasingly intricate regulatory landscape can produce pitfalls for even the most savvy and sophisticated of clients looking to make acquisitions in this space. This practice note cannot provide a comprehensive survey of every FinTech service and regulation. Instead, the goal is to discuss, in broad strokes, which technologies have captured the regulators’ attention and what this heightened attention means for buyers in M&A transactions. Specifically, this practice note discusses:

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