The Coronavirus pandemic impacted the whole globe across different industries, verticals, services, and human behavior.
There are many topics we can explore if we start the Covid19 talk, but we will only discuss the impact of this pandemic on the fintech trends in 2020.
Before jumping further, we also asked Maurizio what he thinks about this, especially from his position - the co-founder of a premium banking and wealth management service, ikigai.
The impact of Coronavirus on startups in the fintech sector has been the same as almost every other sector.
On the one hand, growth has been put on pause due to funding opportunities declining, and companies having to lay off staff in order to preserve cash and be able to survive.
On the other hand, every crisis has its winners and we believe that the startups coming out on top will be the ones that are able to adapt and react faster and with flexibility in uncertain situations.
Having said that, we're already seeing the demand for digital financial services rise not just across the UK but in emerging markets as well. And this is where agile fintech can step in and use the opportunity to emerge stronger.
— Maurizio Kaiser, co-founder of Ikigai
During the lockdown, everyone used delivery services, adopted online payments, and small businesses had to go online to survive. Essential financial functions in terms of payments, lending, and trading quickly changed and identified new ways of working -- ways that are usually approved by early adopters, but due to the social and economic context, they were quickly adopted by the masses.
There was already quite a high percentage in terms of online payment adoption, but due to the lockdown, both consumers and businesses had to speed-up the digitalization process.
Speed is king! And the number of clicks and intuitive actions was key during this time to ensure frictionless service and enablement of online purchases for all types of users and products/services.
Now that we had to go online, businesses will learn how to use data and bundle their services to fit the customer as much as possible, they will maximize the efforts to connect with the customers through their distribution channels.
Data analysis and customer behavior patterns will improve the content based on intent, the offer, and of course the cross-channel experience for consumers when they interact with a brand.
In the offline environment, people smile, say hi, there are some gestures that make an experience better, and the fast change to the online will also force businesses to innovate in terms of customer experience.
Each generation’s values are different now. Financial services and institutions have to shift their view and approach a lot. People nowadays turn to social networks for content, check the review directories before making a choice, research multiple channels for opinions and referrals, and everyone is constantly looking to improve their financial stability.
All products, especially the apps for money management or investment management will have to go for a customer-centric marketing approach and align the business to the changing needs of their customers.
And fintech apps and online businesses will have to innovate and create experiences that make prospects feel valued, helped, understood, and will have to run the extra mile to ensure customer happiness.
There are multiple reasons to go for this type of architecture and UX/UI in terms of app development, no matter if it is a fintech app, a healthcare app, or any other type of app you want to build.
Having a modular approach enables consistency and simplicity: you will always look at your app components as a standalone part, which means you will make sure your visual identity will be there, you will also make sure it is friendly and customer-centric enough, without relying on the other component on the screen. And scalability is always good, but now more than ever, as everyone had to suddenly go online.
Building a scalable application helps you think ahead and flawlessly handle the customers’ growth curve without facing server errors or any other type of system error due to the high number of live visitors within the app (-- I bet you have seen this during the lockdown so often! And it was extremely frustrating, right?).
A scalable architecture ensures better maintenance of your app as well for the long term, as it is easier to manage the customers without disrupting their experience.
According to the Global FinTech Adoption Index 2019, 33% of global consumers often use fintech services other than their main bank first. This definitely shows how fast this trend grows. And how much place there is on the market at the moment.
While APIs have been around for quite a while now, they will be highly used as a way to serve customers faster and better.
Banking as a Service is growing faster and faster, and all the banks and financial institutions will be forced to move towards open banking and provide the available data to customers and partners. This will ensure (and speed-up) the integration of information from multiple sources and provide well-rounded fintech services with higher relevance for the customer needs, rather than standalone solutions.
Data is the most valuable currency nowadays, and it took us years to adopt and enforce basic regulations for data protection -- e.g., National Privacy Commission in Asia, GDPR in Europe, The Data Protection Act 2018 in the UK, the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, or HIPAA, FCRA, ECPA and Computer security, privacy, and criminal law in the US.
And while most governments, institutions, businesses, and the population still struggle with understanding how data works and make sure the regulations are enforced. The fintech industry will face a similar challenge and will demand fintech regulations.
The sudden adoption of online payments, financial services, and fintech applications will need to urge institutions for better law enforcement and regulations in order to:
48% of global consumers use an insurance FinTech service (according to Global FinTech Adoption Index 2019) and while consumers already try to adopt alternatives, the monopoly blocks competitive markets and customer-centric services from developing. And customers are now vocal about their data and information.
If you want to develop a fintech app or you need help in building a product strategy for your fintech product, drop us a line (in the chat or via our contact form) and the wolfpack digital's strategists can schedule a quick workshop or consultancy meeting to go through everything with you and help you build a secure and flawless app!