Acquisitions as a strategy applied by incumbent financial institutions facing competition from fintech disruptors. Analysis of abnormal returns in deals where the acquirer is an incumbent financial institution and the target is a fintech company.

In the following work, we analysed the fintech market regarding its disruptive value in the banking sector and its innovative contribution. The various areas of the banking business affected by the innovation brought by new players have been described and mapped. How the dominant players (the incumbents) are reacting to the entrance in the market of these new players is a crucial part of this work. Investments in seed and growth rounds are the preferred path to control and being part of the innovation process. Acquisitions, on the other hand, are just a small part of the strategic posture adopted by large banks. The few transactions occurred in this space have been analysed, and an event study has been conducted finding a light influence on the stock price of acquirers on the day of the announcement. An interview with the management of a target, WePay Inc., acquired by JPMorgan Chase & Co, was conducted to understand the decision process in this kind of operation.