Our perspective on global micro event and strategies.
As a global industry analyst on the Technology Team, Matt’s coverage includes global FinTech and IT services companies across all market caps.
Matt was previously a member of the firm’s Launch Research Associate program. Participants in the Launch program, through a series of rotational assignments, assist analysts and portfolio managers in conducting research and implementing their investment process. Matt researched a broad range of investment opportunities including the insurance sector as well as securities across the capital structure of European banks.
Matt joined the firm as a client service analyst in our US Financial Intermediaries Group, working closely with his team members to help strengthen the firm’s relationship and consultative partnership with our clients.
In my recent blog post, I outlined why I believe large-scale public payment processors will maintain compelling long-term growth rates even as fintech disruptors take market share. I think that share will largely come at the expense of banks instead. Banks are still the largest players in the payments market, and their 50% – 60% market share is the easiest target for these fintech companies. In addition, in my view, many banks have weak product offerings and a lack of strategic focus in this space that results in a large amount of payments volume sitting in the weakest hands in the industry. This transition may also benefit scale processors if banks look to partner with them to maintain share. We are seeing this begin to play out in Europe, but I expect the trend to continue, if not accelerate, across most geographies.
Despite this long-term growth potential, some investors have wondered why these scale processors’ performance has recently lagged that of cyclical recovery stocks. The main reason is that these stocks have never acted as a cyclical element of portfolio construction in the past and therefore aren’t viewed that way by the market.
These scale processors are now being compared to peers that have had drastically different experiences in the pandemic due to distinct business models. The stocks that have underperformed have generally been impacted by…
In my last blog post, I shared some high-level thoughts on the financial technology (“fintech”) industry and what its increasing relevance means for traditional financial services. Beyond the fast-growing digital payments space, I identified two broad categories of fintech “disruptors” that will present opportunities going forward:
How legacy financial services players (particularly banks) tap into the new infrastructure providers and respond to…
Over the past few years, I have discussed at length the potentially compelling long-term investment opportunity in financial technology (“fintech”) — which we define as companies creating or leveraging technology to disrupt traditional financial services. While much of our internal dialogue has focused specifically on the fast-growing digital payments space, I’d also like to share my thoughts on the fintech industry more broadly and what the increasing relevance of its products means for traditional financial services.
In future blog posts, I will explore some of the below points in more detail for investors who want a deeper dive. For now, the main takeaways I want to leave you with are…