The internet is flooded with the messages of the “new normal” and that “the world will never be the same”. These phrases refer to the ways the coronavirus has changed our daily life and made it obligatory for us to adapt to the ever-changing circumstances. In this article, let’s take a look at how the situation has been in the fintech sector and the upcoming expected changes.
During the pandemic, we saw that productive and service-oriented companies made adjustments to their strategies to adjust to the changing environment. For instance, we witnessed ride-hailing companies starting food and essentials delivery, distilleries setting up a sanitizer line, and clothing manufacturers began sewing up face masks. This should encourage fintech companies to merge into non-related fields to build new products or services for the demands emerging as per the situations.
One example of such merging of fields is the super app which is a marketplace that not only offers financial solutions but also retail products and services. Consumers can use such an app to pay for their utilities, order food and taxis, play games, or get offers from a store as per their location.
Unlike banks, fintech solutions offer convenience to the user; with just a couple of taps on a smartphone, users can accomplish many things without going through long queues. When it comes to technology and UX, even the most advanced banks are inferior to today’s fintech startups. Now with the lockdown, banks have realized that they need both and are trying to catch up. Hence, instead of creating solutions from scratch, banks should collaborate with those who already have it. For consumers, this will mean new products and services, along with a significant improvement in existing ones.
The pandemic has forced many industries to adopt remote work, exposing the inefficiency, cost, and inability to transition into uncharted waters. When everything will settle, banks will need to go through a drastic change in the strategy and principles of their internal processes. This will enable banking services to be more flexible and reduce the response time for various applications. Moreover, traditional banking services will become more innovative and might even be able to compete with fintech startups.
Many believe that the adoption of digital alternatives by businesses is a temporary measure taken due to the pandemic. However, the consumers’ willingness to buy everything online will only grow from here, even after the world goes back to normal. This is true because many people came to know about the convenience the online shopping offers when they were forced to make purchases only through the internet. Further, several service providers, including retail, education, medicine, fitness, and other industries, will use this opportunity to increase their online presence.
Most banks will focus on innovation and building next-gen solutions that fit the new economic reality. The regulators, central banks, and governments will need to revise legislation and make the required changes that encourage such measures.
Although we don’t know when and how the change will occur, it is important to be open to it and modify our approach based on the situation.