Remarkable Impacts of COVID-19 on the Fintech Industry

The digitalization of finance has seen a remarkable upgrade caused by the coronavirus pandemic. Quarantine restrictions have increased the use of remote services. From online shopping to delivery, entertainment, streaming services, and mobile payments- everything has shifted to the digital realm.

Fremont, CA: Financial technology (fintech) sector has been one of the fast-growing industries in the last few years. But, like most other sectors, it has been largely affected by the COVID-19 outbreak.

Let us have a look at the effects of the pandemic on the fintech industry:

A Decrease in the Number of Alternative Lenders

There has been a noticeable decline in incomes across small and big businesses as well as retail customers. This has reduced consumption and raised defaults. Repayment holidays have cut down the revenue streams for lenders. As a consequence, tightened requirements and lower demand have caused a decline in issuance and compelled companies to cease operations.

Expansion of Digital Finance

The digitalization of finance has seen a remarkable upgrade caused by the coronavirus pandemic. Quarantine restrictions have increased the use of remote services. From online shopping to delivery, entertainment, streaming services, and mobile payments- everything has shifted to the digital realm. This massive shift to digitalization is likely to stay in the post-COVID-19 world. Cashless payments are a perfect example of this progress. Besides, the pandemic has driven the adoption of fintech and regulatory technology across the financial industry.

Higher Personalization

The COVID-19 pandemic has increased people’s interest in telemedicine. Supposedly, it may boost commercial interest in biological data, such as blood pressure, body temperature, and others. It would enable companies and governments to improve assessment and forecast, as well as influence the way people live. Besides, the massive 5G adoption is expected to shift the consumer paradigm dramatically. All of these changes would affect areas of fintech services, including software, credit scoring procedures, targeting and customer acquisition, and more.