PayPal has formally applied for a bank charter, signaling its ambition to expand beyond payments into small business lending and deposit services. This creates an investment opportunity in companies providing the essential banking software and regulatory technology needed for fintechs to transition into full-service financial institutions.
Published on December 16
PayPal's bank charter application signals a massive shift as fintechs evolve into full-service banks. The companies building the essential infrastructure for this transformation could see significant demand growth.
Every fintech pursuing a banking charter needs core processing, compliance software, and digital platforms. These 'picks and shovels' companies are positioned to benefit regardless of which fintechs succeed.
This group was carefully selected to include the critical technology partners that enable fintech-to-bank transitions, focusing on companies with proven track records in regulated financial services.
PayPal's pursuit of a bank charter represents a broader fintech evolution toward becoming full-service financial institutions. This creates significant demand for the essential banking infrastructure, regulatory compliance software, and digital platform providers that enable this complex transition from payments to banking.
This group focuses on the 'picks and shovels' companies that provide critical banking technology rather than the fintechs themselves. These are established providers of core processing, digital banking platforms, and regulatory compliance tools that become essential when fintechs seek banking charters.
Each company was selected for providing essential infrastructure that fintechs need to operate as regulated banks - from core account processing and digital platforms to compliance software and risk management tools. These are the technology partners that enable the fintech-to-bank transformation.
The basket's total market capitalisation is 298,306.139 and it is heavily weighted towards large-cap constituents that anchor its profile. This concentration generally suggests lower volatility and a more market-like performance tendency than small-cap-focused baskets.
FIS: $34.49B
JKHY: $13.58B
NCNO: $2.81B
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Part of Exinity Group 2015, serving over a million customers globally.
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FIDELITY NATL INFORMATION SERVICES
FIS
Current Price
$40.60
Fidelity National Information Services is a leading provider of the core banking and payments technology required for a fintech to manage deposits and...
Fidelity National Information Services is a leading provider of the core banking and payments technology required for a fintech to manage deposits and loans.
HENRY JACK & ASSOCIATES INC
JKHY
Current Price
$173.08
Jack Henry & Associates offers sophisticated processing systems and banking software, essential for managing the back-end operations of a financial in...
Jack Henry & Associates offers sophisticated processing systems and banking software, essential for managing the back-end operations of a financial institution.
NCINO INC
NCNO
Current Price
$21.66
nCino provides a cloud-based Bank Operating System that streamlines customer onboarding, loan origination, and account opening, directly addressing th...
nCino provides a cloud-based Bank Operating System that streamlines customer onboarding, loan origination, and account opening, directly addressing the needs of a new digital bank.
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Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitiv Ltd.
If you invested across these assets:
In 12 months it might be worth:
+32.65%
On average, analysts expect assets in this group to grow 32.65% over the next year.
8 of 12 assets in this group are rated Buy by professional analysts.
