Solutions that transfer our money, manage wealth, and raise capital have been through a wild ride in the past year. The pandemic was an enormous test for fintech that happened on a worldwide scale. We’ve talked to experts from KPMG Cyprus about fintech’s agility throughout Covid-19. Pangratios Vanezis, and Konstantinos Botsaris, who have shared their insights and explained why fintech fared so well.
The renaissance of fintech in the pandemic
Chances are you haven’t held cash for a while now if you found yourself in a lockdown. Why would you need something so impractical that traveled through so many hands? You could just manage your finances with a couple of apps.
Fintech was already going through its renaissance before Covid-19 hit. The cashless, physically disconnected 2020 put its potential on full display. The big picture is so much more than digital payments: digital banks, savings, deposits markets… And then there’s Insurtech, digital lending, digital capital raising, wealth tech, market provisioning, as well as crypto assets. How did they fare?
Pangratios Vanezis, KPMG Cyprus Board Member, Fintech Partner, and leader of Enterprise & Startups, evaluates the potential of startups and technologies in the context of: are they making our lives better? “Is it making our world a better place to live in? In the absence of it, would our lives become any worse? In that respect, Covid was a perfect platform over which fintech emerged,” Pangratios explains. Why? Because the positive impact on the way we live our everyday lives was undeniable. “During lockdowns, fintech definitely alleviated a lot of pain. Quality of lives have improved, and a lot of stress that would be there, related to cash transactions and going to banks, was eliminated,” he says.
“These technologies were designed for situations like these,” says Konstantinos Botsaris, , Senior Manager of Digital Innovation at KPMG Cyprus. Without them, our relatively smooth transition to home offices wouldn’t have been possible. “Imagine being in your home most of the time and not being able to transact or do any kind of economic activity with the outside world. This is the sector that has the agility and can react very fast in this sort of conditions,” he outlines.
Power to the people
Fintech not only withstood the pressure no one could expect but demonstrated its ability to adapt at admirable speed. Konstantinos points out that companies were able to implement new features that reflected the situation, and space opened up for those able to grasp the opportunities quickly and leverage their innovator mindset. Thanks to the quick reaction times, the fintech world truly gave power to the people. And that’s something they won’t be giving up anytime soon.
“I don’t like to go to banks anymore – my digital banking habits make the experience frustrating,” Pangratios admits, explaining that it’s too frustrating to see how slowly – if at all – the customer feedback is implemented. Our apps and technological tools? A whole different story. “The feedback that the technology gets from me is reflected in the new feature, and that makes it so much more useful and improves my life,” he remarks.
The pandemic in developing countries – a clean slate for fintech
You know how it goes: complex organizations and well-developed ecosystems have a much harder time adapting to new circumstances than those who are just beginning. And so, fintech found its way to boom in developing countries when they sorely needed it. “I see a very interesting pattern in the developing countries: companies saw an immense opportunity here,” Pangratios says. As countries such as Africa don’t suffer from technology legacies, they can move forward more effortlessly than the rest of the world. Plus, fintech, agile as it is, can penetrate the market faster than many other industries.
The current situation is an “experiment” that can turn into a huge lesson learned once the situation stabilizes. “I see a lot of potential in how we can utilize lessons learned from the pandemic in a much better and efficient way,” Pangratios points out. Konstantinos agrees: “During these periods, there’s an opportunity to come up with business ideas given this acceleration of transformation. In the future, you’ll have more chances of success,” he predicts.
What about all that data?
Needless to say, the data collected during such an extraordinary period are gold. And the more we can gather, the more we can utilize for the expansion of fintech worldwide. Pangratios predicts that we will learn so much during the pandemic that we could potentially implement fintech solutions for problems that haven’t even emerged yet in certain countries.. “It becomes a whole different ball game that can potentially transcend across the globe,” he describes.
Since data is the core aspect of financial platforms and so many transactions occur primarily online, we have plenty of precious information. “Fintech companies will be so much more understanding of customers. Thanks to data collection mechanisms, they will be able to provide higher quality,” Konstantinos concludes.
If the ongoing crisis showed us something about fintech, it’s the industry’s ability to step up incredibly quickly. It should be intriguing to see where it goes next, armed with lessons learned, in a more favorable situation.