8.6 C
New York
Thursday, July 29, 2021
Home Innovation Fintech sector will rush to digitization - post COVID-19 prediction

Fintech sector will rush to digitization – post COVID-19 prediction

Finch Capital released a detailed analytical report titled ‘FinTech: The Future Post CV-19’ which discusses the challenges and opportunities that the sector will face both during, and more significantly after, the crisis.

COVID-19 has had a serious impact on everybody’s lives and is reframing the way we work, consume and interact. Startups in the earlier stages of their life cycles are particularly vulnerable if growth stagnates or even drops for a period of 3 – 6 months. 

As the fintech sector struggles through the COVID-19 economic downturn, a report from VC Finch Capital offers some light at the end of the tunnel, suggesting that the crisis could ultimately end up benefiting the industry by accelerating the rush to digitization.

Read also: Microsoft And Plaid team up to turn Excel into a fintech app

The coronavirus pandemic has had an impact on almost every part of the economy, not least the fintech sector, which has already seen companies furlough employees, close stores and miss out on funding.

Finch Capital says fintech firms will have to weather a crisis situation until the third quarter and then make it through a 12 to 18 month recovery period.

The Finch Capital report covers for the FinTech industry, the 1. short-term impact of the crisis 2. structural implications post-crisis, translating into an ever-swifter adoption of digitalisation and 3. landscape in terms of growth, unit, economics, consolidation, funding dynamics and exits.

Radboud Vlaar, managing partner, Finch Capital, says: “2020 will be challenging for fintechs to navigate, but there are better times ahead. Post-crisis, disruptive winners will ‘take all’, as we expect surging demand from financial services for technology to master digital-only interaction, enabled by AI and big-data analytics.”

This acceleration will trigger a “Big Pocket” battle between incumbents and challengers to win the online customer, predicts Finch, which also expects financial institutions to turn to tech companies rather than in-house options to accelerate digital transformation.

The big winners will be consumer and SME lending platforms as well as firms working on digitisation in the mortgage and life insurance sectors, where in-person interactions still dominate.

AI will continue to be a hot technology, coveted for things such as call center bots, account opening procedures, and loan automation. Digital ID technology will also be important as KYC needs are increasingly met online.

Sources: https://fintechnews.ch/fintech/report-fintech-in-the-light-of-covid-19/34146/https://www.finextra.com/newsarticle/35561/rush-to-digitisation-will-see-fintech-sector-flourish-post-covid-19 https://www.maddyness.com/uk/2020/04/02/the-future-of-fintech-in-light-of-covid-19/

Avatar
Jan Cerny
Jan is an innovation enthusiast and Fintech news reporter. He specializes in news distribution, social media, and content analysis.

Recent posts

Starling Bank’s first acquisition is Fleet Mortgages

UK challenger Starling bank acquires Fleet mortgages as its first corporate acquisition.

Starling Bank revenue skyrockets by 600%

The digital bank Starling has managed to grow revenues to £97.6 million from £14 million in the previous period.

Revolut launched a travel booking feature

After Softbank lead an $800 million investment into Revolut, the UK-based challenger bank came up with another feature - travel booking.

Kid accounts and challenger bank options for children

Revolut junior vs. Starling Bank Kite? 🤔 Once again Everly - challenger bank news joined forces with the Scientia team and their Fintech Insights, the digital banking research platform, to compare several challenger banks' junior accounts from parent's and kid's perspectives! 👍 Check the full article here