ABSTRACTELENA BRAMBILLA. The Era of Digitalization: Is M&A between Banks and FinTech Firms the winning strategy for Bank Profitability? (Under the direction of DR. THERESA MANNAH-BLANKSON). Starting from some articles of the European Central Bank and European Banking Authority, where emerges the current low interest rates situation, the paper briefly analyzes the obstacles banks are facing due to the digital transformation. Indeed, they are having trouble getting a sustained profitability, needed to survive.Banks are trying many ways to cope with this phenomenon: One way is merger and acquisition with FinTech firms. This paper considers new-born firms offering some banking services, such as payments services and investment services, without the need to be banks. Therefore, such firms are in competition with banks, since they offer the same services but in a more efficient and customer friendly way. Such innovation also comprises new methods to comply with the rules applicable to services traditionally supplied by banks (payment services, transparency, privacy, anti-money laundering). Therefore, the paper’s background highlights the evolution of the regulation, both in the United States of America and in the European Union. The time period considered is from 2009 to 2017. So, it underlines how banks reacted, right after the crisis in 2008, in order to get along with the digital innovation and face, at the same time, the post-crisis period. The paper also addresses the following research question: Is investing in FinTech firms the right solution for banks? I compare the profitability between banks that invested their money in M&A with FinTech firms and banks that did not do that t see if M&A is a winning strategy.