Someone could argue that before the Coronavirus pandemic, FinTech was starting to lose some of its gloss. The hype behind financial technology in the past 5 years, has caused somewhat of a saturation on both the industry, the idea and the novelty behind it. The market was flooded with companies producing very similar products and it was all moving on a rather straight line. The emergence of the pandemic though, has stirred new life into the industry and has given companies a new reason for existence. Global FinTech is living up to the hype and it’s leaving the trouble times behind it.
It Seem Like Doom & Gloom But it Will Get Better
A crisis is inherently polluted with pessimism and an instant decrease in spending. This one is no different even though it is not purely a financial crisis. The pandemic has indirectly caused a minor recession for the global economy and whilst FinTech is obviously affected, some sectors within the industry are seeing a revitalization.
FinTech Was Born From a Crisis
It seems like FinTech and crisis complement each other very well as the entire industry came to life from the ashes of the most recent financial crisis. Much like then, FinTech now has the opportunity to reshape the struggling financial world and play saviour for a system that has been crippled by the pandemic.
How Can FinTech Help?
For starters, machine learning algorithms predominantly used by FinTech firms can be used to assess credit worthiness of businesses and distribute loans rapidly by automating the due diligence process. Customers that were traditionally served by brick and mortar banking can now turn to FinTech for a quick, easier, and remote-friendly solution to their financial woes.
Then you have the creativity and progressive thinking that the FinTech industry can only provide, take centre stage and prove why we were mesmerized with its potential in the first place. FinTech companies Fronted, 11:FS and Credit Kudos, came together and created a COVID-19 income checker for self-employed people to help them prove a loss of income via open banking and therefore be eligible to apply for government and fiscal support.
Initiatives like this one show the technological prowess and potential within the industry. There’s so much more the industry can achieve if it keeps going down the same path. For a more in-depth discussion on the impact of COVID-19 on the global FinTech scene, make sure you allow some time and listen to this brilliant podcast where Jill Malandrino was joined by Dushyant “D” Shahrawat, CFA, Strategic Insights & Advisory, FinTech Investment Banking, Rosenblatt Securities.