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May 16, 2020
Matt High

Will COVID-19 create new opportunities for fintechs?

According to Deloitte, the COVID-19 pandemic may create new opportunities for some fintechs as the broader economy shifts from 'respond' to 'recover'

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<h3>According to Deloitte, the COVID-19 pandemic may create new opportunities for some fintechs as the broader economy shifts from 'respond' to 'recover'</h3>

<p>In the new report,&nbsp;<a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-s… COVID-19: New opportunities for fintech companies</em></a>, Deloitte explains that many fintechs, like the wider financial services sector, have "gone into overdrive to respond to the crisis".</p>

<p>These companies, as well as other innovators such as insurtechs and proptechs, have focused on shoring up their capital and funding from investors and lenders says <a href="//www.deloitte.com">Deloitte</a>.&nbsp;</p&gt;

<p>They have also implemented cost-saving measures such as workforce reduction. There remains, however, uncertainty with fintechs "under stress on a number of fronts", Deloitte notes.</p>

<h4>Innovation, relief and recovery</h4>

<p>According to Deloitte, fintechs have several unique advantages that both allow them to better position the proposition in the current environment, and be prepared to exploit future opportunities.</p>

<p>They are, for example, adept and harnessing and using data, and focused on the provision of a seamless, customer-centric digital experience.&nbsp;</p>

<p>In addition, says Deloitte, the startup nature of many fintechs means they are unburdened by legacy technology or strategies. This allows for the building of platforms using a cloud-native approach that can take advantage of API ecosystems.</p>

<p>Fintechs are also better geared towards collaboration - using innovative tools and technologies to do - and more comfortable in creating lasting partnerships with others in the sector.</p>

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<h4>Future opportunities</h4>

<p>According to Deloitte, the these unique advantages may allow fintechs to find new opportunities in the long term.</p>

<p>The report states that fintech companies "may be forced to reexamine their mission and business models after COVID-19", adding that one key question may revolve around how to leverage existing and newly developed assets.</p>

<p>Social distancing, for example, lends itself to the mobile-first strategy of the many challenger and neobanks entering the market.&nbsp;</p>

<p>Similarly, says Deloitte, another outcome of COVID-19 may be the acceleration of partnerships with financial institutions that offer benefits such as capital and infrastructure, but increasingly seek innovative digital solutions.</p>

<p>The report also notes "huge potential in holistic financial services that integrate consumers' financial needs and behaviours, such as healthcare". Opportunities may also arise to partner&nbsp;with big technology firms on a global scale.&nbsp;</p>

<p>Other areas that fintechs may exploit in the future include:</p>

<ul>
<li>Playing an important role in the greater financial inclusion that COVID-19 may bring, including using a collaborative ecosystem to distribute benefits to the vulnerable</li>
<li>Aiding in the rapid disbursement of government relief funds</li>
<li>Empowering or better serving the gig economy, which is traditionally underserved by banks</li>
<li>Harnessing the Internet of Things to improve payments</li>
</ul>

<p><strong>Read Deloitte's full report <a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-s…;

<p><strong>Read our report on Deloitte's future of banking report <a href="https://www.fintechmagazine.com/fintech/deloitte-2030-and-future-bankin…;

<p>&nbsp;</p>

<p dir="ltr"><em>For more information on all topics for FinTech, please take a look at the latest edition of<a href="https://www.fintechmagazine.com/magazine/fintech-magazine/april-2020">&… href="https://www.fintechmagazine.com/magazine/fintech-magazine/march-2020">F… magazine.</a></em></p>

<p dir="ltr"><em>Follow us on&nbsp;<a href="https://www.linkedin.com/company/12590624/admin/">LinkedIn</a>&nbsp;and… href="https://twitter.com/fintech_mag?lang=en">Twitter</a>.</em></p&gt;

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