latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/fintechs-achieve-record-valuations-as-pandemic-accelerates-digital-banking-60004212 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Fintechs achieve record valuations as pandemic accelerates digital banking

COVID-19 Lockdown Boosted Growth Of Digital Platforms

Q2: U.S. Solar and Wind Power by the Numbers

Mining Exploration Insights – September 2020

Amid Pandemic, Airlines Forge a New Survival Metric: Daily Cash Burn


Fintechs achieve record valuations as pandemic accelerates digital banking

As banks focus on digital capabilities, financial technology companies that can deliver best-in-class solutions are achieving record-high valuations.

nCino Inc., which provides a commercial lending operating system for banks, priced its IPO at $31.00 per share, and shares closed at about $91 on opening day. Intercontinental Exchange Inc. recently announced its acquisition of mortgage-software provider Ellie Mae Inc. at an $11 billion valuation, almost three times higher than what Thoma Bravo LLC paid for the company a year prior. And Black Knight Inc.'s valuation reached historic highs after its July 27 announcement that it will acquire Optimal Blue LLC, a provider of secondary market solutions.

Banks have been prioritizing digital innovation for years, and the recent digital surge due to social distancing measures has increased the pressure.

"There has been an absolute acceleration for the need of a lot of different products and services," Frank Sorrentino III, CEO of Englewood Cliffs, N.J.-based ConnectOne Bancorp Inc., said in an interview. "If you're a fintech that is looking to make a bank's job easier and provide some relief for the friction that's in the process of servicing a client, there's a lot of opportunity there. Those companies have become very, very valuable because the marketplace is wide open for them."

The COVID-19 pandemic has highlighted the need for fintechs that partner with banks, putting them in a stronger position than fintechs looking to take market share, said Sam Kilmer, senior director at Cornerstone Advisors.

"The fintechs that are serving banks, like nCino, Ellie Mae and Black Knight are in a much better position right now," he said in an interview. "What COVID did, it dropped a grenade in [banks'] laps. COVID forced a very quick need to adapt."

As demand for technology grows, banks will increasingly seek out relationships with fintech companies that can provide valuable products and services. ConnectOne Bancorp currently has a partnership with nCino, which provides cloud-based software to financial institutions, and recently acquired online business lending marketplace BoeFly LLC in 2019.

"We are going to be doing more of those types of things," Sorrentino said. "There is a really good combination that can go on there to be able to take advantage of the agility that a fintech may have and then partner it with the ability of banks to utilize their balance sheets to support the economy."

Fintechs are also seeing opportunity because more banks are seeking different providers for best-in-class solutions, according to Kilmer.

"More and more banks are using one provider for consumer loan origination, another for digital banking, another for mortgage loan origination, and another for deposit account origination," he said. "Those different companies are good at different things, and that is very opportunistic for a lot of these fintechs."

ENACOMM Inc., which provides customer self-service applications to a variety of industries, has seen an increase in inquiries from financial institutions since the COVID-19 pandemic came to the U.S. in March, said Michael Boukadakis, founder, chairman and CEO.

"It's a great time to be in technology if you're selling products and services to institutions," he said in an interview.

Executives at financial institutions are coming to ENACOMM with similar questions, Boukadakis said: "'Tell me what I need to manage our current demand with branches being closed and how can I expand to handle a future spike? What can we do, what can we purchase and what can we implement to help us compete?'"

Many inquiries are coming from community banks and credit unions. "For a small bank to stay competitive, it's really simple. ... You've got to make banking easy," said Shawn Hughes, president and COO at ENACOMM. "The smartest banks are going to be figuring out how to partner with fintechs."