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The Opportunities and Threats of FinTech during COVID-19

26 April 2020

In the midst of the global Coronavirus outbreak, many countries are imposing strict restrictions and telling their citizens to stay at home for their own health & well-being. This challenging time has redefined many traditional ways in which businesses work and has forced them to apply unconventional methods to their daily operations on all levels.

The already-thriving FinTech sector is bound to witness a great surge in innovation, with the world turning to digital platforms now more than ever. FinTech has been coming with creative and out-of-the-box solutions to deal with the increasing demand of digital financial services since the pandemic has started. Today, FinTech as an industry is solving unprecedented problems and is planning for an inevitable digital future.

Banks are FinTech companies’ new best friend

A global crisis is as good a reason as any for competitors to let down their differences and connect on a more important level; the level of the customer and his needs. Banks are increasingly adopting FinTech concepts and collaborating with young or established companies to leverage their offerings through digital channels. Equipped with secure, easy and reliable technologies, FinTech entities are some of the best suited companies to take on these troublesome times.

Banks and FIs with no access to digital platforms will find themselves in a tough spot during this ongoing outbreak. However, they could reach out and establish relationships that are mutually beneficial for both parties and the most important party of all; the consumer. Remotely connecting people through digital touchpoints and providing them with the services they are used to is paramount to giving them access to their finances, without any need for physical relocation. These relationships are surely fruitful in the short term with COVID-19, but could also prove to bridge the existing gaps between FinTechs and traditional FIs in the long term.

Coronavirus FinTech Challenges

FinTech companies, like almost everyone else, have restricted their staff to working in the safety of their home and this entails an ongoing effort to provide fast, stable technologies for businesses to run on. Employees in the FinTech industry are required to work now more than ever, in terms of ensuring continuous operating platforms with no crashes or issues, as well as in terms of coming up with contingency plans for unplanned events like the Coronavirus during times of volatile uncertainty like today.

The impact of the virus has also led to increased requirements of adaptability for various businesses, and FinTech is no exemption. Platforms need to be restructured to be more flexible and built on agility principles to overcome such unusual events as a virus outbreak. A great example is the internal video chatting platforms that were once considered optional, and are now the main means of communicating as long as the global population is at threat.

Connecting with clients and communities

Part of these adapibility measures for businesses is extending their range of services to existing clients and also striving to acquire new ones. Communities also benefit greatly from these measures, from wealth management to lending to quick & easy payment transactions. A prominent example is FinTechs allowing free transfers for customers to help ease the economic impact of the times.

In case companies are not doing any special offers at this time, just being there for communication and support to their customers is enough to strengthen relationships with clients, at a time when they feel the most vulnerable. Quality customer support via online channels and customized solutions go a long way to establish customer and brand loyalty.

SMEs under threat

Small & medium businesses might be the most affected of the business sector by the corona crisis, and FinTech companies can play a huge role in supporting them and empowering their offerings. Paying online and conducting financial operations is crucial at this stage, as SMEs are almost completely dependent on digital finance. FinTechs have helped SMEs by launching campaigns to sell their products, locating supplies where there is a shortage, raise funding for medical supplies and donations and much more. Offering services that are free of charge is also a big trend during these times.

As the developing situation of COVID-19 around the world brings many industries to a partial or total halt, financial technology is here to support and help out in all its capacity. Digital applications are needed more than ever, and it is the humans behind these FinTech companies that support this global pandemic until these hard times are nothing but history.

Tags

Coronavirus, COVID-19, pandemic, SMEs, banks, financial institutions, remote work, working from home, digital finance, FinTech challenges, FinTech opportunities, VoIP, video chatting, lending