COVID-19 Gives FinTechs A Boost In Business

While the world continues to be impacted, both health-wise and economically, by the spread of COVID-19, one sector is seeing a surge in business - financial technology. 

As people are being asked to stay at home for the time being, FinTechs that can help people live and work remotely are reaping the rewards of this “new normal.” A recent report by the deVere Group found that there was a 72 percent increase in the use of financial apps in Europe in just one week.

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"A new era has already begun, with digitalization and new technologies driving the shift," said James Green, deVere Group’s Divisional Manager of Europe. "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."

Prime Venture Partners’ managing partner Sanjay Swamy has even predicted that the coronavirus pandemic could accelerate the FinTech sector by up to five years.

It shouldn’t come as a surprise that Telehealth is one sector that is seeing a rise in usage due to the coronavirus. Earlier this month Donald Trump waived restrictions on telehealth services for Medicare, which has resulted in a rise in remote consultations. Sweden-based doctor-by-video startup Kry has also reported that demand across all its markets (Sweden, Norway, UK, France and Germany) has gone up, with consultations for viral symptoms increasing by a whopping 240 percent since February 1.

Meanwhile, Bengaluru-based Razorpay has partnered with furniture company Featherlite so that people can rent office furniture to work from home, while India’s Paytm has teamed up with Reliance General Insurance on a COVID-19 insurance plan that can be purchased within minutes on the Paytm app.

And after the U.S. government passed a $2 trillion stimulus package last month, Treasury Secretary Steven Mnuchin announced that “any FinTech lender will be authorized to make these loans.” The platforms have also been given the green light by the Internal Revenue Service to allow eligible recipients to receive their stimulus payments electronically.

Some FinTechs, ranging from accounting and virtual assistants to digital management and insurance (just to name a few), are even offering their services for free or at a discount to help clients get through the pandemic. 

One area FinTechs might find difficult: securing new investments and promoting services—especially since events can no longer be held for the public. “If these companies cannot use these events to drive positive noise, they might be negatively impacted” when the pandemic is over, noted Tolu Ajiboye of Coinspeaker.