The paradigm shift that the coronavirus has caused will leave permanent marks on the fintech industry.
Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Coronavirus: New Challenges and Opportunities for Fintech
Finance Magnates | | March 25, 2020
The paradigm shift that the coronavirus has caused will leave permanent marks on the fintech industry.
Many countries around the world are hitting the 2- or 3- or even 12-week-mark of quarantine, and many are looking at just as many (or more) weeks of quarantine ahead. The virus has brought about a powerful shift in reality; in addition to the effects that the virus has had on our personal lives, companies in every industry are being forced to find new ways of operating on every level.
In a way, the fintech industry has been presented with a kind of advantage–being a fairly new sector, fintech companies are already fairly well-positioned to adapt to a world that suddenly exists primarily online; most fintech platforms already exist in online formats anyhow.
See: Coronavirus Is Widening the Corporate Digital Divide
Still, the paradigm shift brought about by coronavirus is forcing the fintech sector to come up with creative solutions to new and unprecedented problems when it comes to supporting customers, building relationships, boosting company morale, and planning for the future.
Banks are suddenly relying on fintech companies more than ever
Indeed, Paul Geiger, President and Co-founder of post-trade asset management firm Theorem Technologies, told Finance Magnates that “fintech companies are probably some of the best-equipped organizations to take on this crisis.”
“If you’re a Fintech, you’re probably no more than ten years old and, as a result, have built your backend and developmental stacks on cloud environments allowing for operations to continue anywhere,” he said.
“Also, many business-to-business (b2b) communication tools that FinTech companies have naturally adopted and made available to employees such as Slack, Teams, Skype have been more heavily leveraged. Legacy financial brands are more than likely finding this time to be a bit more difficult.”
Indeed, traditional financial institutions have suddenly found themselves between a rock and a hard place. Fintech platforms–including payments services, challenger banks, and others–have increasingly posed a threat to these institutions. However, with the rise of the coronavirus, reports of banks being forced to temporarily shutter branches across the globe signify that the virus has undoubtedly affected business.
See: Three Big Things: The Most Important Forces Shaping the World
On the other hand, Sandeep Todi, chief business officer and co-founder of payments platform Remitr, told Finance Magnates that the crisis had presented an opportunity for banks and fintech companies to strengthen their relationships.
“The relationships between banks and fintechs are playing to each other’s strengths more than ever,” he said.
“With banking partners having to connect remotely and experiencing the dependency for digital touchpoints, the need to catering to consumers’ needs wherever they are is more important than ever before,” Todi explained. “This is where fintech makes it possible to face crisis situations like this with agility.”
And while these relationships may have scaled up quickly in the short-term, they could prove to be long-lasting and beneficial to both parties: “the pace of fintech adoption is expected to increase in the coming months as they enhance their solutions to support customers and businesses affected by the crisis.”
Remote team-building is vital to company success
And indeed, the movement towards working online could represent a permanent shift toward operating remotely. Jim Nevotti told Finance Magnates that he expects to see “an industry-wide shift in attitudes about remote work in general, which will have far-reaching implications.”
Virtual book clubs, coffee breaks, and meditation sessions help boost team morale and keep operations running smoothly
Realizing the importance of maintaining strong social connections in the workplace, some companies have additionally begun taking measures to find ways of keeping employee morale and team spirits up: a spokesperson from investment firm Ethic told Finance Magnates that “maintaining a strong interpersonal connection, even when working separately, is important.
See: How Governments Should Use Crowdfunding to Battle the Economic Impact of #Socialdistancing
Building relationships with clients and communities
“Businesses with quality customer service and an empathetic support team have likely fared well, as they have been able to help clients manage stress and work through any issues stemming from market volatility, all while protecting their business,” he explained. “When businesses help customers when they need it most, customers remember the experience, and it builds brand loyalty over the long term.”
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