The UK’s Competition and Markets Authority (CMA) has expressed concerns about the merger of FNZ and GBST Holdings.
The two fintech firms were supposed to unite after FNZ agreed to buy 100% of GBST’s shares in July 2019.
But in November, the CMA started an investigation into the deal as it was worried it would decrease competition across markets in the UK.
Following the initial investigative phase, the authority found that “FNZ and GBST are close competitors in what is a concentrated market with few other significant suppliers.
“Smaller or less well-established firms find it difficult to enter or scale up because of the risks and reluctance of customers to change suppliers.”
Customers could lose out
Joel Bamford, senior director of mergers at the CMA, said: “Investment software is critical to the operation of retail investment platforms which are used by many investors in the UK.
“FNZ is already the largest supplier and has purchased an established rival who is trusted by many platforms, with few remaining competitors left in the market.
“We are therefore concerned that this transaction could lead to customers losing out.”
The regulator has given FNZ a mere five working days to address its concerns.
Failure to do so will result in a further investigation into the merger, the CMA said.