Big tech funding to fintech companies dropped slightly amid the pandemic as deal activity trended up.

• Big tech investment in fintech companies reached $2.2B in 2020, marking a 4% drop from the previous year. In contrast, deal count increased 52% year-overyear (YoY), hitting 32 deals.

Google is the most active tech giant focusing on fintech.

• Google led big tech in unique fintech investments (23) between 2020 and 2021 year-to-date (YTD), followed by Amazon (7).

• GV (Google Ventures) is the most active big tech venture arm by a wide margin, participating in 45 fintech funding rounds between 2016 to 2021 YTD.

Notable themes: • Big tech companies are taking on the role of fintech vendors through partnerships. Apple and Google are already partnering with banks to embed banking into their services, while Amazon is seeking out institutional lenders to expand its loan offerings. These partnerships present a win-win situation for tech giants and legacy names alike and help boost customer attraction and retention.

• But a focus on in-house offerings could threaten legacy banks moving forward. Money management is becoming increasingly intertwined with non-banking apps (e.g., social media, communication), giving tech giants more incentive and leverage to keep financial offerings inhouse.

In big tech’s race to become the go-to app for banking, shopping, and connecting, legacy banks face the threat of being further pushed out of the financial system.