There was a lot of talk at Money20/20 about the slowdown in IPOs and mergers, but one topic received little attention at the world’s largest fintech conference: the US presidential election.
Whoever is elected on November 5th – Vice President Kamala Harris or former President Donald Trump – will have a huge impact on businesses and the regulations that govern them. But the more than 10,000 fintech entrepreneurs, bankers and investors from over 90 countries who attended Money20/20 in Las Vegas last week seemed unwilling to discuss the topic.
“There is a deafening silence,” said a manager at a large fintech company. The managing director said that there had been around 30 customer conversations at Money20/20 and not a single one had the election discussed. “When I travel around the world, to Asia and Mexico, the US election is the first topic,” said the executive.
“Everyone is in denial because so much can change,” said another fintech company leader.
The regulators were also mother. Rohit Chopra, director of the Consumer Financial Protection Bureau, received a very positive reception just days after the agency approved its long-awaited open banking rule on October 22. Rule 1033 makes it easier for consumers to switch between financial services providers and is seen by some as a game changer. “This is huge. This is amazing,” said one startup manager.
On the same day the agency issued the rule, two bank lobbying groups, the Bank Policy Institute and the Kentucky Bankers Association, sued The CFPB claimed the regulator exceeded its authority.
Chopra said during a Money20/20 keynote that he wasn’t surprised that the biggest players want to stop the rule. “That’s normal. Where those who already have power want to keep it, it is often an obstacle to progress,” he said.
“No one is happy with 1033, but the rule must exist. Without regulatory backing, things are tough for the fintech ecosystem,” said Jane Barratt, chief advocacy officer and head of global public policy at MX.
However, CFPB’s Chopra made no mention of the upcoming election or his plans for the future. Chopra is a former FTC Commissioner who also previously worked at McKinsey. If Harris is elected, Chopra could take the helm of another agency, the second fintech executive said. “Under Trump, Chopra is gone,” the person said.
Gary Gensler, the embattled chairman of the SEC, answered questions However, during a fireside chat on October 28, he refused to comment on the election. When asked whether his recent media appearances were a series of exit interviews or a campaign to keep his job, Gensler was undeterred, answering only that he would remain as SEC chairman until the “arbitrator decides.” blows the whistle.”
“Democracies have consequences,” Gensler said.
Not everyone rejected the election. Gerry Cohn, who was former President Trump’s chief economic adviser and director of the National Economic Council from 2017 to 2018, spoke positively about his former boss. He predicted that Harris would continue the “very restrictive” policies of the Biden administration, seen as a more aggressive antitrust watchdog.
“[Harris] will try to break up big companies. They will try to make any kind of capital raising or capital allocation much more difficult,” Cohn said.
Several entrepreneurs interviewed by Assets said the election would have little impact on its business. Andrew Brown, co-founder and CEO of Check, a payroll startup, said the environment at Money20/20 appears to be more stable than in previous years. In 2021, when startups raised a record $621 billion in venture funding, it felt like “every time,” Brown said [he]turned around, someone raised a huge round.” That changed in 2022 and 2023 when rising interest rates caused funding to slow and some startups to close.
“This year the macroeconomic situation appears to be more stable and clearer than it has been for several years,” Brown said.
Brown said he is confident business owners are prepared to run their businesses “regardless of the outcome of the election.”
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Some bankers blame uncertainty caused by the election for further slowing mergers and acquisitions. According to Dealogic data, mergers have not yet recovered from their record pace in 2021, when 15,582 mergers announced in the U.S. were worth about $2.8 trillion. The number of deals announced in the U.S. is down 33% this year compared to the same period in 2021 and down 6% from 2023, which was a weak year for mergers. As of October 29, there have been 8,648 mergers with a total value of $1.3 trillion.
“Everything feels uninhibited,” said one banker Assets.
IPOs remained slow in 2024, but have recovered from the rapid pace of new issuance in 2022 and 2023. The U.S. IPO market typically generates proceeds of about $46 billion to $47 billion, said Lynn Martin, president of the New York Stock Exchange Group. who also spoke during a keynote on October 27th.
IPOs this year raised $36 billion, but fintechs were largely absent, she said. “We have raised more capital in the U.S. market through the end of September 2024 than in all of 2022 and 2023 combined,” Martin said.
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