In the news: Covid-19 boosting fintech

Fintech firms in Asia and North America have seen a significant increase in digital payment usage during the pandemic
by Bethan Rees


The Covid-19 pandemic has accelerated the pace of digital payments in India, reports Gina Clarke for The Fintech Times. She points to a projection by RedSeer Consulting that the digital payments sector in India is expected to grow threefold by 2025, to ₹7,092tn.

Nitish Asthana, president and chief operating officer of Pine Labs, an Indian merchant platform, contributes to the article, commenting on this growth. "With over 560 million smartphone users, India has surpassed the US and is one of the fastest-growing markets for digital consumers." He adds that the pandemic has provided "the much-needed impetus" for digital payments and triggered an increase of consumers using the technology.

To grow the number of smartphone users in India to a billion, stakeholders must build trust among consumers with secure fintech products, solve merchant issues with innovative solutions, and "simplify the experience for end-users", he writes.

He says that the Reserve Bank of India has taken steps to assist digital payment merchants, including setting up the Payments Infrastructure Development Fund "to subsidise deployment of payment acceptance infrastructure", especially in northeastern states and Tier-3 to Tier-6 cities – cities with populations of 20,000 to 49,999 (Tier 3) to fewer than 5,000 (Tier 6). "We believe this will positively impact smaller merchants in these regions who are looking to jump on the digital payment bandwagon post-Covid-19 and grow their business in the process," he says.

The Fintech Times article

Promoting an inclusive recovery

Fintech could help inclusive growth in poor and remote communities in Asia, and boost recovery from the Covid-19 pandemic, according to the Asian Development Bank in a Thailand Business News article. "Pervasive restrictions on mobility and lockdowns have driven companies to shift their businesses and services online," and digital payment platforms have "eased a transition from offline to online transactions".

The bank reports that in the Philippines, mobile wallet company GCash doubled its registered users in the first half of the year and had a 700% year-to-year increase in transactions in June 2020. It says that fintech solutions, if promoted wisely, "can help secure a sustainable and inclusive recovery from the pandemic … we need to work together to close digital divides that deprive socially marginalised and vulnerable groups … of the connectivity they need to join the digital economy".

The article lists five actions private and public sectors can take to push fintech to its full potential and aid recovery from the pandemic:

  1. Equitable access to digital financial infrastructure – increasing investment in digital infrastructure by expanding broadband internet access, and providing digital education and training.
  2. An effective digital ecosystem – to scale up technology and innovation, driven mostly by the private sector, but public policy needs to play an important role in links between financial and technology firms.
  3. Developing sustainable and secure digital identification (ID) systems – lack of digital ID can block access to digital services, but progress is being made in creating secure sustainable ID systems, such as in Papua New Guinea, where the bank is helping to develop a smart card for ID verification without electricity or internet access.
  4. Catalysing sustainable development finance – blockchain-based solutions and asset tokenisation could address financing gaps and secure sustainable funding for infrastructure.
  5. A holistic approach to cyber defence and security – reducing risks and strengthening the ability to recover quickly after a cyber attack, with platforms sharing intelligence on incidents. International cooperation is crucial to safeguard cyber security.

Thailand Business News article 

Fintech in the US

Fintech companies in the US have "started to realign their growth strategies", but some "need to reinstate their efforts to stay relevant to the market", according to an article by Mondo Visione, which quotes data and analytics firm GlobalData.

Ayushi Tandon, senior fintech analyst at GlobalData, is quoted. He says the fintech companies that have invested in digitalising processes such as online trading, personal finance and mobile apps are "likely to have gained customer confidence, which is the way forward". A recent study from the Fintech Landscape Analytics database of GlobalData's Disruptor Intelligence Center, which explains how some fintech firms have used the Covid-19 pandemic to their advantage, is mentioned in the article.

For example, the American banking and insurance provider United Services Automobile Association invested in customer-centric technology and used the pandemic to "accelerate those efforts". The article also mentions US stock trading app Robinhood, which saw an increase of three million new accounts in the first quarter of 2020, with many of these being "new stay-at-home" investors.

Mondo Visione article

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Published: 22 Jan 2021
  • Fintech
  • Wealth Management
  • digital banks
  • US
  • Asia
  • India
  • Covid-19
  • fintech

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