The coronavirus pandemic has changed our world in more ways that we can imagine. Who would have thought that a virus can bring the whole world to a virtual standstill in this modern age and force us to reimagine and reinvent our everyday lives.
2 years after the first outbreak of the pandemic, the world economy is still reeling from its devastating effects. No sector of any industry has been spared and has either buckled under pressure or transformed and adapted its way of functioning. This effect of this disruption can be analysed by how well the businesses have embraced technology. Perhaps the most well equipped have been the tech and digital companies including fintechs.
One of the major fallouts of COVID-19 has been the shift to remote work environments. What was once an exception has now become a norm with more and more companies realizing the benefits of working from remote locations. During the peak of the pandemic big tech giants like Google, Microsoft, Twitter led the way and incentivized work from home for their employees.
Remote working has opened up business possibilities like never before. Client pitches have proved more successful, because the acceptance of virtual pitching has opened up opportunities to bring in the right people to front them.
“One of the surprising benefits that's come through this is limitless possibilities,” says Bala Viswanathan, Chief Operating Officer at Mercer.
“We're getting increasingly successful in our pitches for clients, because of the level of collaboration suddenly. Every pitch is virtual, so we can now get the best experts that we have from anywhere in the world.
“If we're trying to pitch for a piece of work in the UK, I can suddenly get my Japanese colleague to come and join me, whereas previously I've had to choose from within my offices who's the best person to come for that pitch.”
With the world trying to move on, many companies are offering some form of hybrid model of the back-to-office policies—a mix of remote and on-site work.
Adobe has offered its employees the option to spend half their time working from home and half their time working in an office and expects to double the size of its remote workforce over time.
Twitter is encouraging its employees to work from home if they can do their job remotely.
GoPro is offering even more flexibility than Twitter in supporting its staff to relocate “be it to pursue their passions, be closer to family or otherwise,” GoPro CEO Nicholas Woodman wrote in a blog post. “We proactively encourage our employees to relocate if that will make them feel happy and appreciated.”
During the peak of the outbreak, several fintechs across the UK like Curve ran mock ‘remote test day’ by closing all its offices in case of the worst-case scenario to ensure disruption free services.
The fintech sector is intrinsically best placed to weather this storm as these companies are naturally agile and flexible. From paperless and cashless approaches to cloud-based systems, fintechs have been fast adapters and are better equipped to withstand the impact of COVID-19.
Technology is enjoying its day in the sun like never before. Companies are investing in and upgrading technology to facilitate remote working. Major companies have pooled their resources to aid in the development of vaccines.
Cashless and digital payments have become more popular than before the pandemic.
According to a report published in The Indian Express three-quarters of Indian consumers reported greater use of digital payments since the virus outbreak, and 78% expect to continue increasing their use in near future — the highest figures among 11 nations surveyed — according to a report from Capgemini Research Institute. Another survey by Facebook and Boston Consulting Group showed a rise in online payments in India since late March2021 after a nationwide lockdown to check the virus’ spread and states that there’s a strong likelihood the trend will continue over the next year or so.
Mobile banking has also got a boost in countries that traditionally preferred going to the local branches. In the immediate aftermath of COVID-19, Citigroup closed about 100 branches and JP Morgan, the largest bank in the US, closed about 1000 branches. Banks are investing in apps and forging alliances with fintechs to offer better and personalised customer experience.
However, fintechs cannot be left unscathed from the negative effects of COVID-19. According to a Forbes report fintech firms could face a lack of funding due to the stock market slump. There is a risk for fintechs in the lending sector as default rates might rise and funding costs increase.
Whether the risks outweigh the benefits, it remains to be seen. But it will be an interesting study to chart the development of the role of fintech in an increasingly digital world.
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