Rush to digitisation will see fintech sector flourish post-Covid-19
As the fintech sector struggles through the Covid-19 economic fallout, 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 digitisation.
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.
However, for those that survive, there will be opportunities, as Covid-19 reframes how society behaves, making digital-only the new norm for financial services.
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 centre bots, account opening procedures and loan automation. Digital ID technology will also be important as KYC needs are increasingly met online.
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