A perfect storm of conditions could make technology M&A more appealing than ever for big FinServs, who may view it as a way to protect their operations and could benefit from more-attractive terms.
Experts were already predicting that 2023 would likely be a big year for tech M&A for banks, and the aftershocks of Silicon Valley Bank’s collapse may create even more incentives.
When SVB’s implosion threatened many software startups that relied on it, FinServ CIOs had to grapple with whether they had backstops for all the providers in their technology supply chains.
This stressful process could have execs eyeing acquisitions to safeguard the tech that has become integral to their infrastructure, Forrester analyst Stephanie Balaouras told The Wall Street Journal.
Or, as CIO of Nutanix Wendy Pfeiffer mused: “Are there opportunities for me to maybe invest in a partner and make sure that they’re there for me?”
Meanwhile, the current economic climate and tough funding environment could lead to better terms for acquisition-hungry banks and insurance firms.
Eager acquirers should remember, however, that careful due diligence and a specialized approach to retaining talent are crucial to making a purchase successful instead of a flop, as Bain analysts previously told Insights Distilled.