Tech giants like IBM and Capgemini could go on a mergers and acquisitions “shopping spree” for financial technology (fintech) start-ups next year, the chief of one such start-up has told CNBC.
Daniel Döderlein, CEO of Norwegian fintech startup Auka, said that tech behemoths that have shared a long-standing relationship with banks but still rely on older technology would begin to show an interest in a “flood” of new fintech firms.
A new European directive, which becomes effective in January 2018, would enable third party businesses to monopolize on banks’ software and customer data to build new products – something referred to in the fintech world as “open banking”.
Döderlein, whose company helps develop mobile payments products for 17 banks, said that this would result in big, mainstream tech companies snapping up smaller fintechs to harness the newer technologies they have on offer.
“What we see predominantly throughout that whole sector is that their capability in terms of the technology you need to serve this next leg of the journey, once all the floodgates are being opened up in January 2018, is not necessarily present. So they will probably go on a shopping spree and do a lot of M&A,” he told CNBC over the phone last Monday.