The fintech revolution has clearly demonstrated the value that fintech has to offer consumers and businesses throughout the world. Now, amid the COVID-19 pandemic, fintech companies are rising to the challenge and developing creative solutions to meet the needs of customers.
The pandemic has provided a unique opportunity for those interested in fintech to more thoroughly learn about and appreciate its importance. The following is a look at ways in which fintech companies are harnessing their strengths to deliver innovative solutions to businesses and customers impacted by the crisis.
Offering Digital Payment Solutions
Fintech products can serve a wide range of purposes. Some of the simplest and most common fintech products facilitate easy payments between individuals, businesses, nations, and more.
That’s always been helpful. Businesses thrive more easily when they can accept payments from customers and pay their employees through seamless fintech products. People can enjoy greater convenience when they don’t need to carry cash. Even friends and family members experiencing sudden and unexpected financial problems (such as a child suddenly running out of money during spring break and not knowing how they’ll get home) can benefit from being able to accept fast and easy money transfers.
Those benefits are even greater during the COVID-19 pandemic. While they’re on lockdown, people need to avoid leaving their homes as much as possible. However, they also still need to make certain financial transactions.
Since people need to buy groceries and other essentials, many businesses have considered switching to remote and ecommerce models through which they can accept and make payments digitally.
Fintech can help in this capacity. It can also help to ensure that people will be less likely to leave their homes when making or accepting payments, slowing the spread of the virus.
Improving Access to Financial Services
Fintech has helped many of the world’s unbanked and underbanked individuals to access financial services that they previously struggled to secure. For instance, in some parts of the world, many people lack bank accounts because they don’t live near a brick-and-mortar bank location.
Due to fintech, that’s not a problem. These people can now perform all major banking tasks through apps and similar platforms.
As with the example above, these benefits become even more evident during a pandemic. Everyone must do their part to stay home in order to stop the COVID-19 virus from doing any more damage. That requires only going to the bank when absolutely necessary. Luckily, with fintech products, going to the bank may not be necessary at all.
Providing Tools to Obtain Financial Assistance
The COVID-19 pandemic has unfortunately had an adverse impact on many people’s incomes. It has interfered with numerous industries and deprived people of their jobs.
Many governments have stepped up to offer financial assistance. The problem is that qualifying for financial assistance often requires that you prove to the government that you’ve lost income, which can prove to be a lengthy process.
Fintech innovators are helping to address this issue. For instance, in the UK, numerous fintech developers and entrepreneurs have volunteered to collaborate on “COVID Credit.” This is a fintech service that makes the process of self-certifying lost income much easier.
Other volunteers have developed similar tools to help people to more easily calculate precisely how much government financial assistance they may be eligible to receive. This can naturally help them to budget more effectively. That’s very important during challenging times. It’s also worth noting that fintech payment solutions have helped governments to more efficiently distribute financial assistance in some cases.
Helping Banks to Adapt
This blog often points out that the rise of fintech has threatened the continued dominance of traditional financial institutions. However, it also covers the fact that traditional financial institutions can stay relevant by coordinating with fintech startups and innovators.
That may be clearer now than ever. After all, fintech startups typically leverage the latest technology whenever possible. That doesn’t just mean that they use new innovations to develop convenient alternatives to common financial services. In most cases, their backend exists in a cloud environment, as well.
This makes it much easier for companies to shift to a remote model. When all necessary files, developmental stacks, and related elements exist in the digital realm already, shifting to a remote model isn’t difficult at all.
Many analysts believe this is providing banks with an opportunity to further benefit from collaborating with fintech companies. While some banks have had to shut the doors of many of their branches, they could significantly improve their chances of survival by working with fintech companies to quickly make the transition to a remote model. This could help them to avoid the otherwise potentially major consequences of a sudden change in the way they do business.
The COVID-19 pandemic has prompted fintech companies to develop agile solutions to mitigate new problems that have arisen during this uncertain time. These are a few noteworthy examples to consider.