×
×

How technology can shape the corporate world of the future

How has COVID-19 affected FinTech?

By Rajan Kholia 12 May 2020 | 1

It’s no secret that the world, as we know it, has changed. But like with all changes, those who survive and adapt earn the chance to be at the forefront of future change. Here are a few ways in which the world of financial technology (FinTech) is responding to COVID-19, and how these changes could shape the future of the financial industry permanently.

FinTech companies are struggling

Companies that centre around FinTech tend to focus on a particular line of service, or a particular product to provide to its consumers. Now, when the economy is faced with such disruption caused by COVID-19, a company that provides a peer-to-peer (P2P) lending platform may struggle since not many consumers want a personalised loan at this time, or maybe they can’t quite make the repayments on time. LendingClub, the world’s largest P2P lending platform, has had to lay off approximately a third of its total workforce of 1,538 employees in order to comply with a new restructuring plan made in response to COVID-19 [1].

It’s also important to factor in FinTech start-ups. Many will need investments and funding, but the providers of such will be scarce. Unfortunately, it may be the case that such start-ups won’t make it, but those which do, could very much be the new market leaders.

In-person to online

The FinTech industry relies very heavily on conferences, meetings and events; the birthplaces of new relationships, deals and partnerships. Since nearly all of these have been cancelled for now [2], the switch to needing an online presence has never been more apparent. As a result, such events have been converted to webinars, free-of-charge virtual events and also ticket-based access to networking events apps [2].

The winners in the long run

It’s tough to focus on positives when so many negatives seem to rise from every direction, but nonetheless, there are some. Having so much of a country’s population working from home, or simply choosing to self-isolate to ‘flatten the curve’, it’s clear that many tasks can be done more efficiently using FinTech, and technology in general. The need for financial services doesn’t halt during a crisis, but in this case, the financial services that will succeed are those that can be provided online. This means that even companies that are hesitant to accept digitisation are going to finally invest in such upgrades [3], since the consumer audience for digital services is the highest it has ever been.

Tech giants and their banking potential

Companies like Google, Facebook and Amazon are all very capable of providing financial services, themselves. If such companies can already provide some financial solutions to their customers with the purchasing of their products, there’s quite the possibility that in the future they will be able to provide the more traditional types of loans and even mortgages. Having such a big customer base, and plenty of data on all customers, personalised financial products may not be such a stretch for the incoming future.

Looking ahead

In these testing times, there will be winners and losers. The winners in the FinTech industry will be those who adapt. Whether this involves altering business models, collaborating with others, or ensuring the most customer-orientated digital experience, it won’t be easy to survive.

Those who do survive will lead the financial evolution of a post-COVID-19 world: the forefront of change.

  1. https://uk.reuters.com/
  2. https://thefintechtimes.com/
  3. https://www.computerweekly.com

Photo credits unsplash-logoDenny Müller

View our comments

Sunit Accurate and insightful!

Question of the week

What was the name of the first movie with sound?

Recent posts

How the Internet of Things (IoT) is revolutionising the world around us

The Internet of Things describes the network of things and physical objects around us that are connected to the internet. Over the past decade, the IoT has rapidly increased in size, and continues to do so. It seems as though every year there are new types of objects connected to the internet.
Read more

Dillon Lad | 2020-09-22

How the Internet of Things (IoT) is revolutionising the world around us

Technology | 4 min read

The future of ocean exploration

In recent years, space exploration has taken some giant leaps forward... but why has ocean exploration fallen behind. We take a look at the technology that will be driving us to the bottom of our oceans
Read more

Dillon Lad | 2020-09-03

The future of ocean exploration

Environment, Technology | 4 min read

Is 5G here to stay?

5G, the successor of 4G, is the new standard for wireless technology and global mobile networks, but its rollout has been far more complicated than previous mobile networks
Read more

Rajan Kholia | 2020-08-25

Is 5G here to stay?

Technology | 4 min read

A further look at China’s social credit system

China's Social Credit System is set to be released this year. It will use big data and AI to determine how trustworthy someone might be and could help crack down on fraudulent behaviour
Read more

Dillon Lad | 2020-08-12

A further look at China’s social credit system

Technology, Politics | 4 min read

Putting Tech in Tennis

Technology is having a huge influence in sport, in particular Tennis. On the court, Hawk-Eye has a huge impact on fan experience and the outcome of a game. But off the court, AI is being used to provide in-depth player analysis to help players adapt to their opponent.
Read more

Rajan Kholia | 2020-08-04

Putting Tech in Tennis

Technology, Sport | 4 min read

Sign up to our newsletter