The COVID-19 pandemic has had an enormous impact on our lives, reshaping the way we work, consume and interact. Earlier this month, we highlighted a Finch Capital analytical report that describes the key challenges and opportunities for FinTechs during and after the COVID-19 crisis. Let’s dive in a bit deeper into that report now that we have a better understanding of the pandemic and its impact:
- The crisis will last until at least Q3 2020; this will be followed by a 12-18 month recovery period.
- Digital-only is becoming the new industry norm in financial services, greatly accelerating a trend which started in the last decade. This is triggering a battle for consumers between FinTech incumbents and newcomers.
- Financial institutions are looking to tech companies to quickly accelerate their digital transformation and gain any advantage possible.
- FinTech sector winners in this context include:
- Consumer and SME lending platforms, the best-adapting mechanism to swiftly and efficiently deliver capital to key segments of the economy
- Mortgage and life insurance digitalization, disrupting the role of traditional, face-to-face intermediaries
- FinTech enablers working with artificial intelligence, internet of things and software solutions are in high demand, including:
- Bots for call centers
- Simpler and more effective account opening procedures
- Loan process automation
- Better know-your-customer procedures
- Key areas under pressure include:
- Challenger banks
- Wealth management solutions
- Payment and foreign currency solutions
- Fewer FinTech IPOs are being offered.
To view the report in its entirety, click here.