Can FinTech meet the COVID-19 challenges? How can FinTech respond to the new consumers’ habits, formed during the pandemic?
The Chinese word for "crisis" is composed of two Chinese characters - 危機. The meaning of these two characters are "danger" and "opportunity".
Undoubtedly, COVID-19 crisis brings many problems, not only for the business world but also in our day-to-day life. This could be a breaking moment for many organizations. Yet, for sure, it could be such a great chance for others. We’ve described in our previous blog posts how Blockchain and Artificial Intelligence can help in the battle against Covid-19.
How is Covid-19 impacting FinTech?
FinTech is not immune to this crisis. For example, the entire online sports betting is affected by sport cancelations, with a profit deacreased by more than a half. Companies with products in payments business, have been negatively impacted as well, especially with the cross-border payments. A similar impact is in the landing business, especially in the domain of SME (Small and Medium-Sized Enterprise) landing.
Contrary, online retail businesses recorded higher profits. People won’t wait in a row to buy goods - ordering it via web or smartphone from an armchair is much easier and faster. Moreover, it’s expected to continue its positive trends in the future.
Who are the early winners in our post-COVID-19 world?
Yes, you've guessed it. Technology providers are the early winners in our post-COVID-19 world, as it’s expected.
For example, the insurance industry and traditional banks are in a hurry to provide digital services, as a response to increased consumer demand. Deploying digital solutions in the process of digital transformation will be the main focus in the near future, for sure. It’s such a great chance to increase productivity and to shape products highly aligned with consumer needs. Consumers now conduct more bank business via the web/mobile - paying bills, sending money, etc. No cache or plastics required. Everything’s on a smartphone. Fast. Secure. Comfortable. New and advanced technologies, including artificial intelligence and machine learning, will empower digital transformation and bring it on a new level. Fraud detection, individual customer experience, wider marketing opportunities, and market forecasting – it’s a great chance to improve security, as well as profit.
Even now, it's possible to buy insurance via the web, to compare prices, enroll coverage. Digital transformation of a claim handling becomes a top priority for a lot of insurance companies. But, further digital transformation, by introducing a wide range of sensors driven by the Internet of Things (IoT), will provide a wide range of data that result in fast and inexpensive forecasts.
Let’s take the auto insurance industry, as an example: insurers may be provided with data about the driving habits, speed, usage of mobile phones, detection of alcohol in the blood, and so on. A wide range of monitoring data will result in a better damage assessment, individual offers for each customer, decreasing risks, etc.
To recall Chinese word for crisis, social distancing during the COVID-19 pandemic, motivates us to use digital financial services and online stores more. With that said, this is a big opportunity for FinTech to speed up the digital transformation and get ready for the future, delicately aligning with the new consumers’ habits.