Better together? German fintech challenger exits to French bank

By Sarah Gill | 1 August 2016

There’s another exit in the challenger banking and fintech space with news that Munich-based Fidor Bank has been snapped up by French banking group BPCE. The deal follows the acquisition in March this year of Finland’s Holvi by Spanish banking group BBVA, which also has a stake in UK challenger Atom.

Deal activity around established banks and financial institutions buying their way into fintech with acquisitions, investments and partnerships is only expected to gather momentum as the sector matures and pressure to cut costs and innovate climbs.

With most people in the sector now agreeing that the 'us versus them' rhetoric of 'fintechs versus banks' is now over, we can expect to see more tie-ups between banks looking for fresh ideas and new approaches to banking, while fintech startups look for regulatory expertise, brand equity and cash reserves to help scale their businesses.


Founded in 2009 as the world was still reeling from the global banking crisis, Fidor part of the post-crisis wave of financial tech companies born with the aim of providing more efficient and transparent models in finance. Headed up by CEO and founder Matthias Kröner, Fidor operates a marketplace for banking products. Feedback and interaction with its community of 350,000 members is central to how Fidor develops and executes new ideas around customer experience. The idea is to rebuild customer trust in banks by involving them in the decision making process.

Offerings include its API – Fidor Operating System – a digital banking platform, plus retail products like bank accounts and saving bonds.

Commenting on the deal, Kröner says cited an increasingly “volatile” world as one of the reasons Fidor wanted to link up with BPCE as it looks to take its next steps in international expansion.

“In a world of increasing volatility it is important to be member of a strong group,” he says in a statement. “We are excited to have such a well-established partner as BPCE in the financial world that recognises the need for a customer-centric and entrepreneurial approach to banking and innovation.”

The deal is subject to approval from the European Central Bnak and the BaFin, Germany’s financial services regulator, as well as the German competition authority.

BPCE says the deal is part of its strategy to transform its business for a digital and mobile world, as well as to provide better customer services. Formed of a merger between CNCE and BFBP in 2009, BPCE says it has around 40m customers.


The news of Fidor’s exit comes right after Telefonica Germany launched a mobile banking service in partnership with the company. Fidor is providing the white label cloud banking tech to underpin it, plus a European banking license that will enable the telecoms firm to expand across the region. Dubbed 02 Banking, the service is available on iOS and Android and comes with a corresponding MasterCard. Features include video link onboarding and sending money via phone numbers plus small loans.

Meanwhile, the banking challenger space continues to become more crowded with Berlin company building powerhous Rocket Internet the latest to throw its hat in the ring. The firm, which already launched some fintech startups in the shape of Spotcap and Payleven (which just merged with SumUp) plans to launch a new digital bank for European customers as part of a push on financial services technology. The firm has teamed up with Frankfurt-based FinTech Group AG, which offers white label financial services, to create digital banking services in the region with Rocket using the company’s tech infrastructure and liabilities.

For many it’s an exciting time in financial services, with new entrants promising the first real shake up of an industry that hasn’t budged for hundreds of years. With less (or no) branches, no ancient legacy systems and technology designed for digitally-savvy consumers, the promise of cost savings, transparency and efficiency is great. The hurdles, especially regulatory and in relation to things like capital requirements, remain big and it's likely more startups and challengers will turn to deep pocketed financial institutions to help drive their growth. Making sure they pick partners that will genuinely help and not accidentally crush them will remain crucial however and it will be interesting to watch how these recent acuisitions and partnerships mature in the coming years. 

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