In the wake of the deadly Coronavirus outbreak, the world witnessed unprecedented changes that restricted the functioning of several sectors.
Not knowing how long the crisis will last, many had to shut their businesses while many saw a massive scale down in their activities. But even in such difficult times, the pandemic did not slow innovations, instead, the crisis has been a strong driver of creativity and innovation which helped the business survive and even thrive.
Innovative technological solutions emerged and came into greater prominence which helped businesses solve the challenges thrown up by the deadly Virus.
The pandemic has pushed businesses into an accelerated state of digitization. The world was already embracing digital labor but COVID-19 accelerated this shift towards greater automation.
Businesses comprehended the need for leveraging and accepting digital as the new normal that can help them continue their operations and grow uninterrupted in the event of such a crisis.
According to a survey by McKinsey, “Digital adoption has taken a quantum leap at both the organizational and industry levels. Covid-19 has speeded the adoption of digital technologies by several years and these changes will be here for a long haul.”
While the virus may have forced us to adjust the way we operate, it hasn’t halted our progress which is more important given the current circumstances. With the lockdown imposed and social distancing becoming the new normal, new-age companies are coming up with ingenious tech solutions keeping in view the needs of customers. Companies started relying on emerging technologies in day-to-day operations.
FinTech – Surge in Demand:
While the entire economy has been impacted due to the lockdown and is slowly limping back to normalcy, FinTech companies have been in focus for their solutions, giving hope to organizations of not only surviving but also navigating out of the crisis.
They are creating multiple innovative products to address the rapidly evolving economic issues for sustainability and spur growth.
As working practices and customer Banking habits have been abided by some norms, FinTech has played a major role and has seen a massive surge in demand by replacing the traditional pattern with typically faster and more efficient solutions.
As per the report released by PwC India in association with FICCI titled ‘Redefining the FinTech experience: Impact of COVID-19’ stated that, “There are opportunities for FinTech sector to work, on the supply side, growth drivers are supported by government and regulatory bodies along with technological and advancement support. Whereas on the demand side, growth has been driven by increasing customer needs, unsatisfied market potential, and rising partnerships between FinTech’s and incumbents.”
Going Contactless – The New Normal:
While practicing social distancing and minimizing physical contact, Contactless Payments / Digital Payments emerged as an essential solution enabling the businesses to combat the crisis and move forward.
The disruption caused by the pandemic restricted every physical movement in the industries, but it gave birth to a new trend of ‘work from home’ that required handy digital infrastructure.
Tech came to the rescue – AI, ML & Cloud Computing Evolved, even though 2020 was challenging for the
FinTech’s to navigate at first, but times are changing gradually and moving away from the crisis disruptive winners will take it all and demand for Artificial Intelligence, Machine Learning, Cloud Computing and IoT companies that help financials transform to a digital and data-driven interaction will continue to rush. A digital strategy with an automation partner can effectively help an organization’s competency to overcome the current challenges.
SME’S & MSME’S – Realised the Need to Going Digital:
The Small and Medium Enterprises (SMEs) have been the largest job creators in India, but they are currently facing multiple challenges that are hindering their growth. And one of them is digitization.
One of the major challenges that SMEs are facing today is lack of adoption of new technology, lack of required credit, cumbersome regulatory practices, leveraging the e-commerce trend, etc which still pose a hindrance for these companies.
The HP Asia SMB Report 2020 – a study conducted among SMBs in the region has revealed that over 73% of SMBs in India are confident that they will survive and bounce back post-COVID-19 and have recognized the importance of going digital to revive their businesses.
Rise of Digital Payments and UPI in India Digital:
The payment sector in India has been doing well amid the pandemic. People have started opting for online payments and other digital-led financial mechanisms such as credit/debit cards, e-Wallets, UPI to curb the spread of the deadly virus by avoiding physical touch.
A report by Accenture stated, “About 66.6 billion transactions worth USD 270.7 billion are expected to shift from Cash to Cards and Digital Payments by 2023 in India, and further increase to USD 856.6 billion by 2030”.
Traditional Banking is increasingly looking at FinTech:
Amidst the pandemic, Neo Banking has emerged as the next big segment. According to The Digital Fifth Indian Fintech Funding Report 2020, open banking has witnessed some positive movement in India over the past 18 months.
The report also states that “Post-COVID, Banks and FinTech’s will be looking to collaborate more around open banking to drive customer acquisition for servicing and developing innovations across financial services.”
FinTech Trends to look at in 2021:
More of Hyper Personalised Services – Organisations will look at more personalized and targeted products, services, and content.
Payment Innovations – As the drive towards increased digitization continues, the Payment industry will continue to expand, evolve, and innovate and FinTech will play a major role in strategizing the products and services.
Optimized Cybersecurity – With new threats awaiting to exploit the tech, Cybersecurity plays a vital role and larger emphasis on this part is expected.
Digital-Only Banking – Digital-only banks are extremely beneficial – nobody needs to spend a moment visiting any Bank physically, no tedious paperwork to hands, and no queues for testing your patience. Some other benefits include feasible cost management, fast bill payment, reset pins from home, real-time analytics, and fast balance review.
Blockchain Technology – Blockchain is predicted to bring about a worldwide transformation in financial systems. It’s a distributed ledger technology that can improve current procedures and systems. Banks are already using Blockchain technology with the hope of reducing expenses and enhancing internal procedures.
Neo Banking 2.0:
With more than 75 challenger banks globally, competition is causing a demand for distinguishing among Neo Banks. The next-gen digital-only Banks are offering more than just debit cards and basic checking. Business cost handling tool providers are introducing total Business Banking platforms that incorporate credit lines for cash flow, deposit accounts, and corporate cards.
Reg-Tech:
The financial industry is a regulated sector and FinTech innovations need a simultaneous growth of Reg-Tech. This indicates new tech solutions that enhance and organize regulatory procedures. Reputed financial actors, tech firms, and legislators will work together for introducing new regulatory innovations; however, these require time for maturing.
Payment Innovations:
In FinTech, payment innovations have many elements, including contactless payments, mobile payments, smart speaker systems, mobile wallets, AI and machine learning for security, and identity verification technologies.
Mobile payments will increase further in 2021. In 2018, almost 440 million people were using contactless payments. This target is about to reach 760 million through 2020.