Has Covid-19 Become a Turning Point for Financial Tech Companies?

of fintech companies post COVID19 crisis.

As the whole world is under the grip of the deadly coronavirus, one thing is clear; the human and economic impact of the COVID-19 is significant. Firstly, the pandemic is drastically transforming the way consumers used to shop. Secondly, the pandemic has resulted in reduced revenues, increased non-performing loans, and the rising demand for customer service teams, and other major changes for the financial tech companies. Total transaction volumes have sunk down due to the decline in consumption and trade. People have become more cautious about shopping in public places. Moreover, as most of the people are working from home, COVID-19 has changed the way they used to shop and make payments. A sudden rise in the payment processing needs has made it difficult for both merchants and financial tech companies to handle the payment processing efficiently. Hence, fintech companies are looking for new ways to manage huge volumes of transactions.Let’s dig deeper to see how Covid-19 has impacted all the fintech firms around the world and how they are coping up with the situation with digital payment solutions. Impacts of COVID-19 on Financial Tech Companies1. Growing Demand for a Cashless Society In the beginning of March, the WHO warned people about the spread of the novel coronavirus through banknotes. The WHO emphasized making contactless payments wherever possible to control the spread of the deadly virus. The pandemic has also compelled the retailers and merchants to close their stores and switch to selling online. Hence, the COVID-19 has accelerated the adoption of digital payments significantly, pushing towards a cashless society. 2. Emerging Need for Fraud Protection Solutions The world is aware of the bitter truth that any crisis gives birth to numerous criminal activities. With the speedy rational changes happening every single day, fraudsters and cybercriminals are finding new loopholes that are encouraging them to make devious attempts to steal money from innocent people. Some of the common COVID-19 scams that happened recently include impersonating government organizations and public health authorities and demanding payment from the victims. These fraudulent activities have made it mandatory for large merchants and financial tech companies to invest in fraud prevention and detection solutions. Using artificial intelligence and machine learning in digital payment solutions can be an effective way to prevent fraud and cybercrimes.3. Formulating a new trust equationThe trust equation is the cornerstone of financial tech companies. Howev