The rapidly changing business environment requires immediate and proactive adjustments to satisfying customer needs. The limitation on interaction and movement is encouraging a change in behavior that needs to be considered when mapping out the future of your business in this new reality.
The always-connected customer and his ability to control almost every aspect of his life from his living room are more applicable now than ever before. The need to get out in the community is getting reduced by the second. Online shopping was a noticeably growing trend even before the outbreak.
During Cyber Monday in 2019 over 9.4 billion dollars were spent on online shopping within the U.S. The projected e-commerce spending for the holiday season in 2019 in the U.S. was estimated at over 135 billion dollars. With the current situation, consumers will develop even a deeper habit of tackling matters online.
This behavioral change can potentially establish a permanent transition of how we do things. This is the chance for the e-commerce industry and financial service providers to build trust among its new customers and sustain their loyalty after the outbreak. Indeed, as eCommerce is solving several issues at the moment, consumers become more and more adjusted to these ways. In China, we already observe post-recovery strategizing that includes a full-scale digitalization across all industries.
“People are gradually moving from offline shopping to online and the habit won’t disappear when the epidemic is over. This will have a very positive impact on the whole eCommerce industry.”– Zhong Zhenshan, Vice-president of emerging technology research, IDC.
The novel coronavirus pandemic is further shining a light on the vast opportunities FinTechs have to offer. We observe an increase in the usage of online financial services, electronic and contactless payments, digital mortgages, etc.
Examples: Symphony is a provider of instant messaging for bankers. Their messaging activity increased by 40% since mid-January. The volume of attachments to instant messages such as PDFs, Word files, PowerPoint presentations surged by 500%. Blend is a digital mortgage software provider. The volume of refinancing applications grew with 1500% to 2000% from the same time last year. There is 85% to 95% increase in mortgage purchase applications processing daily loan values as high as $8 billion.
Covid-19 represents an extreme challenge for today’s world and business- es but due to the high dependency on e-commerce, digital delivery, and online payments, a progression of those sectors is expected. This situation may turn into a catalyst for the mass adoption and evolution of FinTech products.
With the preference to stay at home in the current situation, e-commerce (especially food ordering) is getting a boost as consumers prefer buying groceries and daily needs online. We observe a sudden increase of 20% – 30% in demand on Amazon, Flipkart, etc. Due to increased e-commerce shopping, online payments are surging. It is unlikely that FinTechs within the payments sector will be hit by the outbreak.
So far, digital banks have struggled with a lack of trust and as a result, consumers use them as secondary accounts. However, Challenger banks already have the benefit that many of their processes are not human and paper-driven, but reliant on mobile-only banking and digital onboarding.
The reality right now more than ever allows us to peek into a future without POS terminals, touchpads and cash. A world where financial matters are tackled online and customer support is done through highly intelligent AI-powered Chatbots.
Increased desire for digital banking services. Traditional banks and credit unions may seek assistance from FinTechs.
Increased support. Government organizations and regulations may support FinTechs to battle weaken- ing economies and introducing Fintech digital solutions
Complete digitalisation. Due to the pandemic, all companies will have to go fully digital (to survive) and after this will continue to be digital. Therefore, there are opportunities for building digital platforms or develop already existing ones.
More talent. Companies are now able to hire the best possible talent as the market is less tensed and there are more available options and more committed candidates.
PSD2 and Open Banking are transforming the industry. They require the implementation of strong customer authentication (SCA) for online financial activities. Its purpose, along with many other things, is to reduce the risk of fraud and to increase security through additional authentication factors.