The impact of financial and technological mergers and acquisitions on the world digital economy

Abstract

Subject. The COVID-19 pandemic brought IT companies to the leadership positions in terms of many aspects, as they contribute to a new reality and the development of digital economy. It also catalyzed the emergence of large ecosystems among financial institutions and technological giants. The M&A market mainly starts to shape global processes of the global economy digitalization, urging to scientifically comprehend the processes. Objectives. We conduct the critical analysis of the way the M&A market influences the digitalization of the global economy. Methods. Studying the M&A in the Fintech and Techfin segments, we applied methods of analysis, comparison and systematization of the information. Results. We revealed key trends in digital M&A deals, describe the impact and development of such processes in the Russian practice. Conclusions and Relevance. Every year M&A deals in the financial sectors and among IT corporations generates and raises over USD 250 billion in investment, thus making almost a 20-percent contribution to a growth in the digital economy. We found some understudies risks arising from digital M&A deals, such as deal planning risks synergy assessment risks, high volatility risks associated with prices for new companies, compliance risks, digital inequality risk and new social risks. Considering the Russian specifics and predominant positions of the banking sector, the digital transformation in Russia is noted to take place through the FinTech sector gaining momentum. To accelerate the digital constituent, it is reasonable to take the following efforts: introducing the digital Ruble as announced by the Bank of Russia, outlining a programs for supporting and encouraging national IT companies to develop non-banking payment systems and accelerate the digital transformation, connecting not only credit institutions, but also digital developers to the quick payment system of the Bank of Russia.