FinTech

9 The Changing FinTech Landscape: A Snapshot of M&A Themes and Trends The FinTech sector offers a myriad of products and services: mobile payments, personal financial management, overdraft protection, fraud protection, auto-investing, crypto investing, cash advances, personal loans, and reward programs. As that list continues to grow, traditional banks face a challenge from faster- moving FinTechs and so-called "neobanks," or digital banks that operate without branches. FinTech M&A, investments, and partnerships are an effective route of adding or improving digital capabilities, and perhaps more quickly than doing so organically. Regional banks in the U.S. increasingly look to "buy" whereas smaller or community banks generally see partnerships with FinTechs as a way to grow fee income. In contrast, global systemically important banks view investments in FinTechs as preferable in light of existing statutory and regulatory limitations on their acquisitions of banks. Regional banks, in particular, appear poised to be significant acquirers of FinTech technologies and applications that will enable them to enhance their traditionally "higher touch" relationship banking capabilities. In addition, regional banks will look for ways to compete more fiercely against consumer-friendly neobanks, like Chime or Varo, including by eliminating overdraft fees or offering early direct deposit or other account features. Other lenders, as well as community banks, will seek out FinTech transactions to broaden their business, such as by targeting a new customer base of individual investors. A natural fit exists with digital advisor platforms, which can provide direct access to individual investors. For example, SoFi's customers can now check prices and buy certain cryptocurrencies through SoFi Invest®, developed in partnership with Coinbase. BANKS AND OTHER LENDERS

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