This is how the new economic crisis can affect fintech positively – Guest Editorial

By Amnon Goldrat, CEO, ParagonEX Dynamic

A new health threat has taken over the globe, with patients now numbering more than 500 thousand people.

The crisis gripped the world and imprisoned people in their homes. The resulting situation has caught countries off guard, leading to severe circumstances, hitting their economies like most people cannot remember. 

Many businesses and entire industries, such as air transport, restaurant business, tourism, have been shut down for an indefinite period and no specialist can predict how long they will need to recover. The outbreak is impacting both financial markets and consumers’ behavior, which many fear can lead to a global recession.

Indeed, many sectors are directly and severely affected, but some industries thrive upon change since they see it more as an opportunity for their business than thread. As people have no other choice but to stay at home, the world economy now mostly relies on technology for enabling as many as possible to become stay-at-home workers.

With that being said, FinTech is one of the few industries for which this crisis can be considered a boon. This is a globalized sector whose products and services are predominantly digital and in this sense, the operations can continue as normal.

There are many doors that FinTech business can open now and not only survive through the current crisis but take advantage of the situation and reap the long-term benefits.

The emerged health-turned-into-economic-crisis has become one of the major drivers for Fintech adoption. For instance:

• Healthcare, Banking, and Insurance sectors are now using blockchain to speed up the medical data verification
• The World Health Organization recommends contactless technology – WHO officially encourages contactless payments

Survival of the fittest

Like every other industry, FinTech is not intact and needs to take major measures to adapt to the situation. Such measures include restructuring, new strategies and business models, innovations, etc.

“We see the rise of usage and dependency on technology as inevitable to stay competitive amid the present situation. But we also see the presented opportunity and need for Fintech solutions” –  Amnon Goldrat, CEO at ParagonEX Dynamic.

The most important things that a Fintech provider can do now are to be agile, adaptive, innovative, and listen to the customers if they want to stay competitive. Or lose.

Find the weak spots and work on them

In months of uncertainty, the organizational leaders of Fintech companies need to make quick and adequate to the situation decisions since the circumstances call for action. The times offer both challenges and great opportunities. It can be an eye-opener for areas that need improvement, whether it’s internal processes, product or service update, or customer relationship. Now is the time to transform your business and fit it into the market next to the long-distance runners.

Restructure infrastructure and Re-think working practices (if you still haven’t done it)

Traditionally, FinTech companies are fast adapters, since their survival depends on it. With that being said, it’s no surprise that this industry can serve as a role model to other sectors for unimpeded switching to work-from-home employment.

For the longest time, such companies have embraced the principles of outsourcing, freelancing, and flexibility in terms of working hours and workplaces. After all, it’s a globalized industry and the employees of a Fintech company (developers, customer support, etc.) can work from all over the world, not relying on meetings in person, physically present.

As of now, such a business model has a huge advantage compared to other industries, which have yet to adapt.

For businesses that have a more traditional, office-based structure, the need for reorganization is essential. However, companies should be wary while adapting to work-from-home practices and need to create secure systems, which do not open up their businesses to risk.

Now is the time to re-think your strategy

The present economic crisis provides a chance for the Fintech industry to flourish via innovative solutions, which is the core element that the sector leans upon. Through remote working capabilities and innovative systems, the sector is well prepared to support its technology users through this.

To go out of this situation as a winner it may be a good idea for the companies in the sector to re-think and change their strategies, as well as the business model. Thus, they can increase their foothold and consolidate the position they are holding on the financial market. However, if the companies want to stay in the long run they should make their tweaks applicable for after the crisis has passed.

Now is the time to look closer into what more can the product or service offer to the users and how to attract more clients, whether it’s through better customer support, referral programs, or more inclusion via good cause.

In times of crisis, philanthropy proved to be a win-win strategy to help society and gain future loyal customers.

What about the trading world?

Although the current financial market is volatile, many believe it is more than ready for additional Fintech activity. Market volatility related to the adverse circumstances has provided a welcome boost for trading businesses. Investors see a great opportunity for short term and long-term investments. 

In the last few weeks, a spike of new users of robo-advisors and trading platforms is also observed, mostly due to the social isolation and the financial opportunities the situation provides.

The new economic crisis may have the power permanently to change how society operates. But whenever there is change, there is also an opportunity. When these opportunities are technological, that is when FinTech steps in. FinTech will most certainly play an important part in kick-starting the world economy again by making it more resilient for what is to come.

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