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The current pandemic sweeping through most of the world has wreaked havoc in most areas of the economy as well as our personal lives. As schools and businesses gradually shut down, governments plead for people to stay home to contain the spread of Covid-19. With the virus showing no sign of going away, countries could remain on lockdown for many months to come.
However, as is the case with every change, among the many challenges, the pandemic might provide some industries with an opportunity. As we minimise personal contact, services offered in digital form are becoming more popular. While Netflix and Amazon Prime replace cinemas, DHL and FedEx does the shopping for us, and Uber Eats and Grubhub connect us to our favourite restaurants, people have an option to manage their finances remotely too.
Within financial services, FinTech companies have been the main drivers of digitalisation. With some more mature FinTech services appearing to have plateaued recently, could the current crisis provide the next push for the industry? Let us have a look at some obvious suspects that could gain traction during the pandemic.
Other than the immediate traction some of the above solutions might experience, the pandemic is likely to trigger FinTech activity in other areas and have a long-term impact in previously underpenetrated industries, none more likely than the healthcare sector. With current FinTech solutions only scratching the surface of the industry, the pandemic is likely to reveal the shortcomings of healthcare systems globally that need streamlining. HealthTech and other forms of digital health innovation will become more critical as Covid-19 spreads. Looking towards the future, the FinTech solutions that emerge from this crisis will help people, businesses and the government better manage our finances and lives in such unprecedented times.
For this to happen, there is a call to action for the investment community and governments around the world. They need to remain committed to and protect FinTechs as in these difficult times many may find themselves short of funding and / or working capital. Covid-19 is set to reset many parts of the global financial services industry, with FinTech (including start-up valuations) amongst the most affected. On the other hand, the current situation may also spur M&A activity as some FinTechs look to scale their operations in response to new opportunities or to just survive.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Damien Dugauquier Co-Founder & CEO at iPiD
30 October
Kyrylo Reitor Chief Marketing Officer at International Fintech Business
Prashant Bhardwaj Innovation Manager at Crif
Philipp Buschmann Founder & CEO at AAZZUR
29 October
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