FinTech has been around for years. Whether you believe it to be the growth of PayPal in a world where digital payments were almost noon-existent to the rise of banking apps that allowed people to make transactions easily, there has always been some form of FinTech available for people to easily live their lives.
However, the recent coronavirus pandemic has truly been a watershed moment in the FinTech era. So far, the pandemic has provided the impetus that FinTech firms need to gain the right amount of traction with their customers.
With banks closing shop and other locations seeing limited to no activity at all, people have had to move into online, digital payments as a means of keeping themselves from being stranded.
For years, many believed that they didn’t need digital payments — whether due to a general displeasure with the process of learning something new or the belief that traditional banking as enough. In 2008, the financial crisis happened and brought a change to the norm. most traditional banks understood that they would need to move digital to save themselves, as rent and other fixed costs became a bit of a problem.
Now, we’re having another watershed moment in the global finance industry. FinTechs have become increasingly prominent.
Statistics from App Annie showed that countries like China, the United States, and Japan saw the highest surge in the duration that consumers spent using FinTech apps in March 2020. Japan led the way with 55 percent, while South Korea came in second with 35 percent. The United States and China came in third and fourth with 20 percent apiece.
Even in developing economies, the move towards FinTech has been quite rapid. In Latin America, there has been a significant uptrend in Fintech adoption for some years. As the pandemic hit, however, FinTech adoption surged even more. According to a research report from the deVere
Group., Europe saw a staggering 71 percent increase in Fintech adoption in
Glint Pay, an app that allows people to purchase gold, reported a gobsmacking 718% increase in its traffic in one week in March. At the same time, banking apps in Asia and the Middle East also reported that their adoption rates and usage levels had surged significantly. A bank in Singapore even reportedly confirmed that the number of registrations on its online banking system had surged more than 100 percent. Currently, Fintech is one of the surging economic areas of the world.
A Growth in Digital Payments
It’s no secret that e-commerce has been a booming industry since the lockdown began. People have shown a desire to rather shop online than go outside to risk catching the coronavirus. as expected, this has meant a growth in the digital payments sector as well.
According to a study from McKinsey & Company, e-commerce transaction volumes grew by 81 percent in less than a month after the government announced a lockdown in the country. Even people who preferred in-person shopping still had to open digital payment accounts as shops refused to collect cash and directed users to make online payments instead.
PayPal, seen by many as the largest mobile payments service solution, saw a 20.2 million surge in accounts for the first quarter of the year. in April, amount 250,000 people opened accounts with the company. Square Inc. another top payment processor, saw a 300 percent increase in direct-deposit volumes for its digital payments platform CashApp.
It has been a matter of “nowhere else to go.” Whether people want to shop online or would still prefer to make the trip to their favorite convenience stores, there was no way of escaping digital payments.
Digital Lending Surge
Digital lending platforms have also played a prominent role in helping to keep economies afloat. With companies having to partially or completely shut down, many have needed loans to keep operations running.
Digital lending platforms have risen to the challenge, helping government programs in more ways than one by allowing people and companies to borrow at low interest rates.
In March, People Fund, Korea’s top digital lending service, got $1 billion worth of loan applications. The fund’s application count also surged by 123 percent over the same period in 2019. This surge indicates a shift in borrowers’ appetite for online lenders — which are more accessible and easier to work with than government platforms.
Online Investing Growth
There has also been a considerable growth in online investing so far. Robinhood, a digital investing app, added 3 million new customers in the first three months of the year.
Apps like these focused on two things particularly — appeal to millennials and peoples’ desire to move their money easily. Instead of dealing with traders and traditional firms that had also closed down, they could basically keep investing without worrying about a lockdown affecting their funds.
What Does the Future Hold?
It’s quite evident that this trend will continue going forward. Even after the virus blows over, many will keep to the trends that the virus has brought. It might not be at the scale of what it was during the lockdowns, but things won’t go back to how they used to be.
Companies are beginning to understand this, and that is why they’re also innovating to be significant parts of the future. One of the most exciting is Nimbus, a peer-to-peer (p2p) crypto project that plans to build an integrated Fintech ecosystem with all the capabilities that customers could want.
Nimbus is currently working on developing a cross-functionality system, leveraging its strong Nimbus Core technology to combine cryptocurrency functionalities and cloud-based computing.
While it functions primarily as a p2p crypto exchange, this platform does much more. It comes with an Initial Public Offering (IPO) hub, a p2p lending interface, a social trading platform, and a crypto merchant service. Security is optimal on the platform, with the developers touting it as the most secure crypto service in the world.
The company’s CEO Fernando Martinho explains of the project:
“At Nimbus we leverage technology to develop new and augment existing capabilities for the discovery, distribution, operation, and servicing of financial products and services.”
Both beginners and experts will love how easy and seamless the platform works, as it includes an easy-to-use interface that allows operational convenience. While it isn’t launched, Nimbus is a perfect example of a company gearing up for the inevitable dominance of FiTtech.