M&A trend among fintechs and banks continues with two new deals


  • Patriot National Bancorp buys fintech American Challenger Development Corp for approximately $ 119 million.
  • Fintech BaaS BM Technologies’ accepted the acquisition of First sound bank.
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The news: For a quartet of American fintechs and small banking players who unveiled merger projects this week, their justifications can be summed up by paraphrase Pet Shop Boys: “You have the banking charter, I have the technology. Let’s make a lot of money!

the importance of a personalized banking experience

Insider Information

The proposed combinations relate to:

  • Patriot National Bancorp purchase fintech American Challenger Development Corp. The deal is worth around $ 119 million, with a closing expected in the first quarter of 2022.
  • FinTech Banking-as-a-service (BaaS) BM Technologies has agreed to a acquisition from First Sound Bank, which serves the greater Seattle area. This combination, which includes a name change to BMTX Bank, is valued at around $ 23 million and is expected to end in the second half of 2022.

More on this: In the case of Connecticut-based Patriot, it is looking to use American Challenger technology to improve its customer experience, which it will achieve by making its technology costs mostly fixed instead of variable. The advantages envisaged by the bank include:

  • Speed ​​up account openings and financing initiations within a minute.
  • Offer video interactions with customers.
  • Close mortgages as quickly as 20 days.

Meanwhile, BM Technologies wants to buy First Sound because the target

retail banking

its structure offers it multiple growth opportunities:

  • It will add First Sound’s net interest income to its income mix, which is currently fee-based.
  • BaaS is also interested in the First Sound banking charter as it allows for nationwide deposits to be accepted. This force, along with the fintech’s plans to integrate the external deposits it currently manages into its balance sheet, will provide it with funds to increase its loan income.
  • It will combine its current customer acquisition and marketing strategies with the added retail banking products.

The big takeaway: Patriot and BM Technologies are trying to use their mergers to go on the offensive in the competition for the most engaging customer experience.



  • The logic behind the two deals is compelling: each offers ways to acquire new banking customers and ultimately more profits, using technology to improve the quality of their retail offerings.
  • Pooling merged resources to work on greater personalization can help improve quality and keep customers happy. For example, a Capco 2021 survey shows that 72% of U.S. banking customers consider a personalized experience to be very important.
  • Merger is also one of three steps small financial institutions can take to keep up with their competitors, through our 2021 report Innovation strategies in small and medium-sized financial institutions. The other options are internal technological development and partnerships.

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