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Fintel aiming to create 'Microsoft 365 of financial services' with string of acquisitions

Fintel aiming to create 'Microsoft 365 of financial services' with string of acquisitions

  • 18.03.2025 17:45
  • yorkshirepost.co.uk
  • Keywords: AI, Acquisition

Fintel aims to create a unified financial services platform akin to Microsoft 365 by acquiring companies like Owen James and Synaptic Software. The firm integrates these tools into one seamless system for advisors, driven by its goal to reduce fragmentation in the industry. Fintel also invested heavily in AI capabilities internally, focusing on training staff and enhancing data architecture rather than pursuing acquisitions in the AI space.

Microsoft Services

Estimated market influence

Fintel

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Fintel is a fintech company aiming to create an integrated platform for financial advisors, similar to Microsoft 365. They have made several acquisitions in 2024, including Owen James, Synaptic Software, ifaDASH, and Threesixty Services. Their core revenue increased by 22% to £68.9m, with a significant contribution from their acquired portfolio. Despite this growth, pre-tax profit dropped due to merger costs and share scheme payouts. Fintel is also the parent company of Defaqto and SimplyBiz. The company plans to further integrate AI into its offerings without pursuing AI acquisitions.

Owen James

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Acquired by Fintel in 2024 as part of their strategy to build an integrated financial services platform.

Synaptic Software

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Acquired by Fintel in 2024 to contribute to their seamless financial advisor platform.

ifaDASH

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Acquired by Fintel in 2024 as part of their plan to create a comprehensive financial services platform.

Threesixty Services

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A Manchester-based business management consultant acquired by Fintel in 2024, which significantly increased Fintel's distribution footprint. At the time of acquisition, Threesixty served over 900 intermediary customers.

Defaqto

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A company under the parent firm Fintel, involved in financial services.

SimplyBiz

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A company under the parent firm Fintel, involved in financial services.

Context

Analysis of Fintel's Business Strategy and Market Implications

Overview

  • Fintel's Vision: Aims to become "the Microsoft 365 of financial services" by integrating multiple software solutions into a seamless platform for financial advisors.

Strategic Acquisitions (2024)

  • Acquired Owen James, Synaptic Software, and ifaDASH.
  • Acquired Threesixty Services, significantly expanding its distribution footprint. At the time, Threesixty served over 900 intermediary customers.

Financial Performance (2024 Results)

  • Core Revenue: Increased by 22% to £68.9m.
  • Revenue from Acquisitions: £15m contributed by acquired firms.
  • Adjusted EBITDA: Grew by 8.5% to £22.2m.
  • Pre-tax Profit: Declined from £9.6m in 2023 to £7.7m due to:
    • Non-recurring costs: Over £4m in merger and acquisition expenses.
    • A "once every five years" share scheme payout of £5m.

Market Position

  • Current Industry Trend: Financial advisors use an average of 9 un-linked software solutions, leading to inefficiencies.
  • Fintel's Differentiation: Integrating best-in-market point solutions into a single platform, aiming for seamless operations akin to Microsoft 365.

Competitive Dynamics

  • Focus on Integration: Rather than acquiring AI-specific businesses, Fintel is investing in:
    • AI Adoption: Training staff and embedding AI across the business.
    • Data Architecture: Building robust data infrastructure to leverage AI effectively.
  • No Planned Acquisitions in AI: Strategy focuses on internal development and integration of AI into existing systems.

Long-term Effects

  • Potential Market Impact:
    • Increased efficiency for financial advisors using a unified platform.
    • Likely competitive pressure on other fintech firms to integrate disparate solutions.
  • Regulatory Considerations: As Fintel expands its data-driven offerings, compliance with financial regulations will be critical.

Strategic Considerations

  • Customer Value Proposition: Reducing complexity and improving operational efficiency for financial advisors through a unified platform.
  • Investment Focus: Emphasis on AI and data architecture to maintain technological edge without over-reliance on acquisitions.

This strategy positions Fintel as a leader in consolidating and modernizing financial services technology, with a clear focus on integration, efficiency, and long-term growth.