Pandemic triggers global fintech surge

The Covid-19 pandemic has led to a surge in the use of financial apps across Europe, according to a survey by Swiss-based financial advisers deVere.

David Sapsted

1 April 2020

Social distancing, self-isolation and lockdowns are believed to be behind the 72% rise in the use of fintech across the continent in just one week.James Green, deVere Group’s divisional manager of Europe, said, “The world has changed in the last few weeks. The measures we’re now all taking to help the fight back against Coronavirus are affecting the way we interact, live, work, and take care of our finances.“A new era has already begun, with digitalisation and new technologies driving the shift. This can be seen by demand soaring for video-calling platforms such as Google Hangouts, Skype, FaceTime and Zoom amongst others, as more people from ever work remotely.“This new era has also been evidenced this week with a staggering 72% jump in the use of our fintech apps from existing clients and a sharp increase in inquiries from potential ones.”

Fintech apps and increased customer service: the new normal

Mr Green said that, since the 2008-2009 financial crisis, fintech had been filling the void left between what traditional financial services companies had been offering and what clients were now expecting, especially in terms of customer experience.“In broad terms, this means immediate, on-the-go, 24/7 access to, use and management of their money. It means personalised, on-demand services. It means lower costs," he said.“It can be expected that due to the Coronavirus pandemic and the steps being taken to combat it, this move towards fintech will be significantly accelerated. Fintech is fast-becoming the new normal.”

UK 'Covid Credit' tool: help for small businesses and the self-employed

In the UK, a group of fintech businesses have cooperated to produce a 'Covid Credit' tool to make it easy for sole traders and self-employed workers to demonstrate loss of income to the HMRC, the nation's tax authority.The proof-of-concept site went online this week, operated by fintechs including Credit Kudos, Fronted, 11:FS, Coconut, Capital on Tap, Mazuma, Seedlegals and True Layer. The tool allows the user to fill in banking data and create a straightforward PDF report, which can then be shared with HMRC to display the user’s financial situation in applying for government-backed loans.David Luck, CEO of Capital on Tap, said, “Covid Credit is a tool that we hope will really make a difference to small businesses and those who are self-employed. It is important to us to make that process easier during this challenging situation."A large portion of our customer base are sole traders and would need additional financial support from the government due to lost work. Our focus has been on what we can do to support our customers, whether that’s through initiatives like Covid Credit, or providing information on other government schemes like those that provide business rate relief or grants."

Related articles:

Fintech and Coronavirus: worldwide efforts to help

And the surge in the use of fintech is not just limited to Europe. The Japan Times reported on Wednesday that growing numbers of SMEs affected by the pandemic were utilising fintech as part of their fund procurement efforts."This is because fintech allows such companies to obtain loans within several days, as their borrowing programs are screened swiftly based on account activities recorded using software," the Japan Times reported."The presence of fintech-based financing services is increasing at a time when numerous cash-strapped business operators are seeking consultations with public and private financial institutions."Konstantin Rabin, head of marketing at Warsaw-based fintech company Kontomatik, commented, "Almost half of the world’s population is now practising self-isolation. This means that interaction between humans is limited. This also means that local businesses - basically all the places where public gatherings happen - are closed down."But because we have so many fintech options, a lot of these services can now be ordered online, giving the smaller communities a chance to keep their businesses open and operating, even if they only work for deliveries."Fintechs are used to make the transactions more convenient, by taking out the third party from the equations. You can make transactions, pay your bills and even access your favourite types of entertainment online and all that without having to break the rules of self-isolation."