How Has Covid-19 Affected Fintech Trends?

When we first saw it in the news that a deadly virus was hitting the city of Wuhan in China in December 2020, many of us may have overlooked it and thought that it would be gone soon. Little did we know that one year and five months down the line, we still would be having the virus, not in China’s Wuhan only, but the entire world. And that’s it, Covid-19 it was called, a deadly virus that’s transmitted through the air.

Since the first outbreak, all areas of life have been affected- socially, financially, economically, physically, and psychologically. All industries have been impacted, especially financial technology. This article assesses how Covid-19 has affected fintech trends.

Afterpay services-

Financial technology has experienced major growth, thanks to the Covid-19 that has spun positive development in the financial industry. Many financial dockets have endorsed afterpay services, whereby clients are now allowed to purchase items and pay for them later. According to the USWU Sydney News, Covid-19 has increased afterpay’s demand from A$5.2 billion to A$11.1 billion. With the increased use of afterpay services, the number of global consumers also skyrocketed.

Customer demand across the USA, UK, New Zealand, and Australia reached a new peak of 9.9million, featuring a 116% increase as of June 2020. By the end of June 2021, the global trends will tell the percentage increase between June 2020 and June 2021.

Digital Payment Services

Another trend that Covid-19 has kept within the financial technology’s fingers is the use of digital payment services. Because the Covid-19 infectious virus can stick and survive on surfaces, including money (notes and coins), many governments and health agencies encouraged the use of digital payment of service. Cashless transfer, as opposed to physical transfer, was encouraged.

Even small and medium enterprises that probably never dreamed of using digital payment services had to adapt to the new norm. Mobile banking became more necessary. Even for the least of purchases, businesses and premises made provisions to allow digital payment.

Loan Inclusion-

Covid-19 set in and knew no boundaries between the rich and the poor, the fortunate and the less fortunate, or any other social status group. Anyone and everyone was affected. As this happened, people cleared their savings, and the need for loans skyrocketed. In fact, this seemed to be the only option available for many people. Financial technology faced a major challenge; they needed to accommodate people that the banking systems could not reach.

In making this possible, the financial industry came up with a loan inclusion system to write and grant loans, even to those the banks could not reach. A good example is the US$659 billion US Paycheck Protection Plan that tries to fill some of the gap left by the banks by enlisting Fintechs to write loans for the poor economies.

Fintech Trends Apps

Another trend that Covid-19 has set into the market is the increased download of fintech mobile app development on phones and computers. Recent studies have revealed a 33.1 to 36.6 percentage increase in the daily downloads of fintech apps. BiTech companies and Fintech providers experienced major gains during the peak of the pandemic and, by extension, the general financial crisis period. Government apps, investments, and borrowing services admitted to having experienced a significant increase in revenue during the crisis period. All these major changes took place, thanks to the Covid-19 pandemic.

Application Programming Interfaces (APIs)

With the virus spreading past one year, another trend that financial technology has seen increasing is incorporating APIs in the commercial banking systems. Faster payments, clear working capitals, and operational benefits are now happening, courtesy of the Covid-19-steered API-driven systems. Financial institutions and financial industries are now using APIs to accommodate and deliver new propositions that prove helpful to companies in boosting their competitiveness in crowded marketplaces and improving their customer experience.

Finestra is an example of the thousands of big companies that have made use of APIs for the betterment of their services during the pandemic. Finestra partnered with the fintech’s ConnectedFi and integrated their asset finance API into ConnectedFi’s asset finance customer relationship management (CRM) platform. With what result? Finance requests went up, and brokers got way ahead of their competitors. This significant change happened since the integration reduced the time that the typical loan application would take.

Data Enabling Insights

Another financial technology trend that has stood the test of the Covid-19 pandemic are data enabling insights. Many fintech institutions are now venturing into Open Banking-enabled systems to provide a better look into their financial services. With the Open Banking-enabled propositions, businesses can now better understand their financial position by steering greater access to their own banking data. Another provision of the data enabling-insights is the real-time cash forecasting and profit and loss information that the small and medium enterprises are now employing to trim off the financial load and make decisions as need be.

Since January this year, Open Banking solutions have doubled and peaked at two million, which is expected to rise even more. As the pandemic keeps taking a seat in the financial technology industries, the industries are also keeping in tandem with it and even planning to keep way ahead of it by making advances to offer businesses enhanced operational insight.

Changed Landscape for Businesses

Among the many modifications in the financial technology trends, is the operation of businesses in a changed landscape. The retail and hospitality sectors are now deploying tech-enabled payment systems to circumvent solutions that support Covid-19 health regulations like social distancing and make it easy for businesses to manage overhead costs. A good example is a pay-by-bank system that enables clients to use their banking apps to pay merchants directly. Businesses are also employing e-commerce channels to meet the increasing customer demands.

Conclusion

The Covid-19 pandemic has affected all sectors, including financial technology and related industries. With such changes, there has been a need to uphold the existing trends and develop new ones to keep abreast with the changes Covid-19 steered. This article discussed the major fintech trends that Covid-19 has set in and how the virus has affected the trends.