The coronavirus should accelerate fintech/bank cooperation
What are long-term effects fintechs might experience due to the coronavirus, and how can they benefit from the lockdown?
Due to the lack of funding, fintech companies may find themselves in deeper cooperation with traditional banks. While the former will get the proper monetary resources for their development, the latter can use fintechs’ technological potential to improve their services. Moreover, thanks to the growing implementation of open banking, the same type of collaboration can be reached between bigtechs and fintechs.
The public sector is another place fintech companies can go to for mutual partnerships, as some governments need help from private companies to both provide technical means and manage support packages for citizens and industries. Not only that, but fintechs’ machine learning and KYC instruments allow for better evaluation of the sectors that are most in need of this help and the ways it can be delivered.
While we are at it, the need for technological improvement is at hand – due to the lockdown fintech companies started using more cloud-based solutions, AI, and KYC solutions to keep up with high services demand. These technologies proved their necessity and will be explored further.
And don’t forget the safety precautions. The need for digital banking grew exponentially since the very beginning of the lockdown, as 79% of surveyed customers said that they wanted to get more all-digital services from their bank in the future. And more than half of respondents were sure that they weren’t going to visit banking branches as often as pre-pandemic. Considering this, fintech companies are bound to get new clients, but they also potentially opening themselves to more fraudulent situations and need to up their security systems.
Digitalization pays off. And finally, the aforementioned demand for digital banking solutions, as well as the changing consumer habits, that now prefer going cashless and trying out alternative payment methods, open new opportunities for PSPs, as they already provide this type of service. At the end of the day, there are around 1.7 billion people worldwide that remain unbanked, so there are potential clients that can discover banking opportunities with a new generation of financial PSPs.