July 16, 2024

IPO News

Fintech Companies Fight to Overcome Bank Crisis Fallout

After being negatively impacted by the bank crisis, shares of merchant acquirers, a prominent fintech firm, rose on Tuesday. The problem that began at Silicon Valley Bank and spread to other financial institutions had an effect on Global Payments, Fiserv, and Fidelity National Information Services. On Tuesday, however, FIS stock rose 7%, FISV stock rose 6%, and GPN stock rose 5.4%. Silicon Valley Bank, a signature bank, has been more visible to the public as a result of the crisis’s impact on the fintech industry. Depositors at both banks will be protected thanks to action taken by federal regulators.

The current crisis has investors worried that there will be a long-term shift in deposits from small and medium-sized banks to large banks, which would stress FIS and Fiserv’s fundamental bank processing. Financial institutions often outsource the processing of credit cards and many other transaction types to third-party merchant acquirers. But, privately held rivals Adyen, Stripe, and Checkout.com are gaining ground.

Stock news today had some exposure to SBNY and SVB, but experts don’t expect it to affect FISV’s growth in 2023. Before last week’s banking crisis, fintech stocks were generally underperforming the S&P 500 in 2023 due to prolonged sales cycles. In light of rising rates of interest and concerns about a US recession, Trevor Williams said that 2023 would be a challenging year for core processing. There are a few industry benchmarks (IBD) groups that fintech companies belong to, such as financial software and investment management, along with the largest IBD fintech stocks rating at just No. 85 out of 197. Following Tuesday’s rise, FISV shares are up 9% as of 2023, FIS shares are down 20%, and GPN shares are up just 1%.

You can find latest fintech news, insightful analysis of the financial sector, and the latest events in the fintech world at our website.

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