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The Impact of Coronavirus on the Financial Sector

15 April 2020    
The Impact of Coronavirus on the Financial Sector

The world as we know it is experiencing an unusual period due to the developing coronavirus crisis, and all sectors have been affected in one way or another, some on a shallow level but others on a much deeper one. Everything from retail and FMCG to entertainment, travel and leisure have felt the impact of COVID-19, and each industry is dealing with its own set of unique challenges.

Where the financial sector is concerned, these challenges are found in multiple areas. Banks have much lesser opening hours and are mostly serving a few customers at one time due to the imposed social distancing precautions. This entails that other means of contact are seeing a surge in their traffic, as anxious customers take to social media, online banking and phone calls to try and reach their banks.

For FinTech companies, these times present significant challenges as well but also opportunities to be taken advantage of. Challenges include facing a drop-in demand of their applications due to rising concerns about people’s money in a climate of uncertainty, especially if these FinTech applications were not adopted before the Coronavirus. However, the obvious main advantage remains; the digital ecosystem is the way to go today, and FinTech companies are responsible for as critical an area as any; money.

Mobile payments, digital transactions and all the other e-finance branches are providing a solid alternative to physical banking interactions, and smart banks know that this is the time to make an alliance with leading FinTech firms to take their business to the digital level. Many FinTechs are also offering their services for free to consumers, as long as the crisis is still developing.

In these uncertain times, FinTech entities need to represent a sector that has met them with resistance in the pre-Coronavirus world, and today we are seeing many traditional FIs partner up with many Fintech companies and digital-only services. FinTech as a sector needs to ensure that its digital infrastructure is robust enough to meet the high demands of a locked down population, provide reassurance to their customers, respond to all their questions in a timely manner and prove that they are worth their reputation, all in hopes of earning the trust of consumers in a volatile period.

 

Tags

Coronavirus, COVID-19, digital finance, mobile payments, banks, FIs, partnerships, consumers, financial sector

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