The turn of 2019 and 2020 was the beginning of a new reality for the whole world. All thanks to the hitherto unknown COVID-19 virus, which turned into a worldwide pandemic. Millions of sick people and high contagiousness meant that the realities we had known so far needed to be reevaluated. Not only made social life change, but also the operations of many businesses. The coronavirus left its mark on many industries, while posing quite a challenge. The FinTech business also needed to adapt to the new rules. In this article, I will try to outline exactly what has changed in the industry since 2020, and how FinTech companies now look.
Table of Contents:
- Faster step towards digital transformation.
- Focus on financial inclusion.
- Growing importance of remote work and the development of new collaboration opportunities.
- Growing importance of artificial intelligence and automation.
- Redirecting attention to risk management.
- Emerging challenges and working on regulatory opportunities.
- Establishing collaborations and partnerships.
Faster step towards digital transformation
Digitalization has gained more momentum in the face of the pandemic occurring. The situation has forced many to shift their businesses toward modern technological solutions. The reduction of office operations has caused more and more entities to head toward FinTech ideas in banking, payments and investments more broadly. Contactless payments have become popular, while online banking and networked investment platforms have also seen strong growth. For many companies, the pandemic was the last chance to make bold business decisions that redefine their existing operations.
Focus on financial inclusion
The events of a few years ago not only outlined the direction of change for financial enterprises, but more importantly highlighted all sorts of weaknesses and inadequacies in access to related services. FinTech companies not only focused on providing services in underserved regions. It was primarily a time for mobile banking and digital wallets to expand their scale of reach. In this way, digital financial services gained new users while offering them cash anytime during the restrictions in place.
Growing importance of remote work and development of new collaboration opportunities
Companies tying finance and new technologies together have quickly found themselves in a world opening up to new work systems. Remote work, which had previously been implemented by a few, has become particularly popular. With technology to maintain operations and establish effective collaboration, FinTechs have quickly found their way into the world of performing duties from home. This has also been made possible by all sorts of video conferencing tools and virtual project management systems that take care of seamless communication between teams. Great emphasis has been placed on all issues related to ensuring cybersecurity. This is particularly important, especially from the perspective of protecting sensitive financial data shared by users accessing the services.
Growing importance of artificial intelligence and automation
The high volume of customer inquiries and ongoing transactions has contributed to investments in the development of FinTech enterprise processes. Artificial intelligence (AI) and automation have been relied upon to improve service quality and better service. Chatbots and virtual assistants have proved to be a breakthrough, helping to ensure that every step a customer takes goes smoothly. Artificial intelligence has not just been reduced to improving service standards. Its significant contribution can be seen in detecting fraud and assessing the risks involved. As a result, financial transactions can be conducted without any worries.
Redirecting attention to risk management
The pandemic has also left its mark on risk management. FinTech companies have so far failed to realize the importance of a properly adapted risk assessment and mitigation strategy. Especially when business is conducted in an uncertain economic environment. Vigilant entrepreneurs have focused their efforts on data analytics and improving machine learning algorithms. According to the assumption, this has been associated with better familiarity with analyzing market trends. Credit risk assessment and coordination of activities to effectively manage risk also improved.
Emerging challenges and working on regulatory opportunities
COVID-19 was and still is a huge challenge for the world. Both in the broader perspective and in the smaller one, the effects are still being felt today. FinTech companies have also felt how much of a challenge they face. Especially when it comes to adjusting the relevant regulations. Governments have decided to allocate emergency funds and various types of regulatory relief to help companies and individuals in the current crisis. The role of FinTech-oriented companies has been to adapt to the advent of the rules and adjust to the newly enacted regulations. The ensuing changes also proved to be a kind of opportunity for innovation to emerge. Among them were, for example, the exploration of digital identities and remote deployment of customers.
Establishing collaborations and partnerships
The financial environment has become unified. Many players decided to operate in partnership with other companies. The main goal was to survive a difficult period, although the tightening of ties between companies also gave room to work on complex financial solutions. Working together expanded resources, allowed easier access to expertise and, just as importantly, contributed to the development of a network of clients.
Although the COVID-19 pandemic was not one of the pleasant experiences in the history of mankind, it should be interpreted as a breakthrough period in some cases. Confirmation of these words can be found in the financial environment, in which a revolution of sorts took place. Companies, in order to continue to function, had to open up to new challenges, while facing difficult realities. With the help of technology, it was possible to develop and implement solutions that will certainly be with us in the future. The crisis has highlighted the importance of agility, resilience and collaboration in navigating uncertain times. As the world gradually recovers, fintech companies are poised to play an important role in shaping the future of finance, driven by their adaptability and commitment to meeting changing customer needs.
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