Nordea has announced today that it will be acquiring Norwegian insurer Gjensidige Forsikring‘s digital banking unit for EUR578 million cash, effectively adding 176k customers and EUR4,840 million of their assets onto their balance sheet. With the acquisition of Gjensidige digital platform, Nordea will also be distributing Gijensidige’s insurance products to its own 900,000 customers. The acquisition, Gjensidige believes, will also provide opportunities for the insurer to expand its customer reach through synergising with a leading Nordic bank that is also receptive to their digitalisation and innovation priorities.
The ongoing pattern of aggressive fintech acquisitions by established financial institutions shows no sign of slowing down. Just days ago, Bloomberg reported that that French payments processor Ingenico Group SA is being targeted for buyout by several firms; including private equity giants CVC Capital Partners, Hellman & Friedman, and Bain Capital — all of which are actively vetting through ‘Europe’s hottest fintechs‘ for the next acquisition target.
Industrial observers have raised concerns about acquisitions and partnerships by existing financial institutions gradually cannibalizing the lofty ideals that many fintechs were built on — disrupting the financial landscape by removing financial intermediaries that do not add value to the global economy, and empowering consumers to take charge of their personal finances and investments. Kerim Derhalli, who founded micro-investment app Investr in 2013 after leaving his position as Head of Equity Trading at Deutsche Bank, believes that firms are only into the business of financial technology and not ‘fintech’ per se if they are just helping existing financial intermediaries marginally improve their existing processes. At BusinessCloud’s ‘The Future of FinTech’ event, he further elaborates that fintech is ‘the manifestation in the financial markets of the information revolution’; the democratisation of financial data previously only within the stranglehold of large financial institutions.
