Covid-19 Pandemic and the Fintech Industry
Over the next few blogs, we will discuss the key takeaways from our research. Stay tuned!
Covid-19 had a strong impact on the fintech industry in India. Strict lockdown restrictions to enforce physical distancing have pushed people to adopt digital payments platforms overnight. The fintech industry had to reinvent itself rapidly to cater to widening customer base within a short period. The pandemic therefore created opportunities as digital solutions were no longer a matter of convenience but a necessity.
In our examination of existing literature on this subject and interaction with members of the community, we noted that the fintech industry used four approaches to cope with the curve balls thrown at them during the pandemic. First, fintech companies increased their interaction with end customers through online and social media channels to create a digital-first approach. Second, fintech companies partnered with banks to reach last-mile customers for loan repayments and other products. Third, multiple fintech companies innovated products to diversify their offerings, increase adoption rates, and also provide value-added services to increase customer satisfaction. Fourth, some of the companies also eliminated operational redundancies and automated processes to prioritize sustenance over growth1.
Through interviews with representatives of some B2B and B2C fintech companies working on payments, digital lending, collections etc., we gained insight into four broad aspects of their business during the pandemic -
Changes in their market performance due to the pandemic.
Adaptation by the firms as a response to the pandemic.
Requirement for regulatory assistance to cope with the situation.
Operational challenges faced by them.
Through our responses we found that most fintech firms faced three types of changes due to the pandemic:
In the upcoming blogs, we will discuss the changes and challenges faced by fintech firms during the course of the pandemic under these three heads. Watch this space for more coming soon!
Microsave report - https://www.microsave.net/2021/06/23/impact-of-covid-19-on-fintechs-india/