With the emergence of the COVID-19 pandemic over the last few months—and the dramatic, adverse effects it has had on the economy, businesses across the globe are worrying about their future.
Some of these businesses and, in fact, their entire industries, have begun to see that this pandemic and its economic impact is not an ephemeral hardship but an actual existential threat. Just as the virus itself has fatal consequences for some, so does its economic bearing on some businesses have an equally staggering finality to it. For FinTech and other industries, though, this is not always the case and, in fact, it can actually be the contrary.
It Is Not All Bad News
Judging from most of the latest news reports, you might begin to believe that the pandemic has left every part of the global economy in tatters, across the board; however, upon further and closer review, you will find that some industries have continued to see sustained growth. One such industry is FinTech. For example, with interest rates so low at the banks and the stock market seeing such rapid and major shifts from day to day, investors have sought alternatives to such an uncertain economic climate, instead embracing the following types of investments:
- Private securities
- Real estate securities
- Anything related to blockchain, including increased crypto transactions
- More support of small and growth companies
Many traditional means of achieving consistently high returns have become less predictable in such an uncertain and volatile market, which has enabled greater investment in FinTech and other more innovative options.
The More Things Change, the More They Stay the Same…
All of this is not to say that the changes in the economy resulting from COVID-19 have altered the trajectory of FinTech, either for better or for worse. In a sense, most of FinTech has remained impervious to the pandemic, as most of the industry continues its growth as was expected pre-pandemic. That is to say, more people are growing accustomed to mobile banking technology and apps, so that path toward continued growth of the sector in the coming years will not change. Of course, there are exceptions:
- Some savings and investing apps directed at consumers might have seen less activity since many consumers simply do not have the funds to fuel a desire to engage with the tools that these companies offer.
- Apps aimed at businesses and cross-border payments might actually be doing even better as a result of this public health crisis.
Overall, though, FinTech continues to strengthen its relevance and importance in the domestic and global economy regardless of current events, no matter how colossal, be them in healthcare, politics, economics, or any other number of major occurrences. Thus, the pre-COVID trend of reliance on financial technology and its integration into daily life will move forward at the same pace no matter the circumstances.
Innovation Drives FinTech’s Long-Term Success
The very nature of FinTech means that innovation is key to its success. Innovation can help companies adapt to a changing world, but it can also help companies change the world. This is what makes FinTech well-suited to the future environment, post-COVID or not. FinTech will always be able to spot new opportunities since money will always need to be moved and managed, no matter what happens in the economy or even the world.
One of the most exciting opportunities for FinTech innovators today involves the seamless holding and movement of money. In particular, many FinTech innovators are figuring out new and exciting ways to simply and easily manage all the many electronic forms of currency available in the world these days. Additions involving mobile financial apps, blockchain technology, foreign currencies, and a wide variety of other special uses—some targeting consumers and others targeting industries, both locally and globally—are moving this industry forward.
The Takeaway: FinTech Will Survive—and (Continue to) Thrive
Not all businesses have been affected by this pandemic. Many FinTech businesses in particular, for the most part, have not seen nearly as dramatic of a shift in their overall projections. Most of them have stayed on the same course. And of those businesses that have been affected by the pandemic, some are prospering more than ever while others are on the cusp of closing. One thing is universal, though: the changes resulting from the COVID-19 pandemic have the potential to create opportunities for innovators.
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