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Coronavirus – the cause of COVID-19 – has already made dramatic impacts on our working and personal lives. More specifically, a growing percentage of individuals are being forced to work from home, even in industries where this initially seemed unlikely. While many are either celebrating or lamenting this change, there’s no denying that this massive workplace shift has led many to adopt new technology platforms. Now, the situation has greatly accelerated FinTech adoption — by an astounding 72%.
An easy example is the sudden rise in people using communication platforms like Slack or Zoom. While these companies saw heavy use before, their use now is certainly much higher.
FinTech is one arena where the adoption of various technology platforms by the public has been progressing at a relatively steady rate, particularly compared to other tech offerings. But the Coronavirus may very well change all of that.
People are working from home more than ever before, including folks in the financial industry. Along a similar vein, more people are watching the stock market than few other times in human history, buying or selling or biting their nails in the anticipation of what’s to come.
Yet just because people are working from home doesn’t mean their jobs are necessarily over. Things still have to run, companies still need to meet, and traders still need to buy and sell stocks. All of these requirements are causing people to look for alternatives to their traditional meeting routines and solutions.
What exactly is FinTech? In a nutshell, FinTech is a shortening of the phrase “Financial Technology”, and it’s an umbrella term that refers to any technology platform or program designed to increase the delivery or accessibility of financial services to the public. Perhaps the simplest example of FinTech is the standard banking app. No longer do people need to visit a brick-and-mortar banking institution to view their funds, make a deposit, or even withdraw cash; it can all be done via your smartphone.
But FinTech development didn’t stop with this modern phenomenon. These days, FinTech is represented by many developments and advancements, including stock market applications, investment portfolio programs, AI investment advisors, money-transfer platforms, and much more. FinTech has been a result of the deluge of digital talent just like many other sectors, so it’s seen rapid innovation over the last 20 years.
Technological developments and leaps have led people to discover that they no longer need to physically meet someone to have an interview, just like they don’t need to go to the store to buy a book. Even before Coronavirus, people used technology to have web chat meetings or send documents to one another much faster than copying a physical document and sending it across an office.
But perhaps the most important advantage FinTech brings in the wake of social distancing is that it allows companies to maintain some semblance of “business as usual”. If you can have a business meeting with all of your coworkers through video chat conference software, send files to one another via collaborative platforms like Google Docs, and receive a paycheck and even update your investment portfolio using smartphone applications, are things really all that different?
Before the coronavirus, many people would not necessarily have been exposed to many FinTech platforms. But having to work without face-to-face interaction, and without coming into the office, is causing people to look at things in a new light. In a way, FinTech is more attractive than ever before.
Because coronavirus is forcing everyone to work remotely, there’s a clear probability that FinTech usage will only rise in popularity because of its advantages.
For instance, FinTech (and other tech) allows people to communicate even if they are separated by vast distances. In the era of the coronavirus, you may not be physically separated from your coworkers by all that far, but it may as well be several hundred miles if you can’t go outside. Technology allows you to collaborate and communicate with other workers just as you would in the office either through web chat or video chat applications.
Technology is also useful thanks to its speed. You can now make instantaneous transactions regardless of distance and almost regardless of platform. Stock trading is no longer regulated only on the floor of the New York Stock Exchange. Now it can be affected by someone sitting on the couch with their smartphone in their palm.
There are plenty of easy examples of how FinTech can benefit financial workers or just about anyone through their efficiency and user-friendliness.
Applications and money transfer services like TransferWise are becoming used more and more even by those who aren’t particularly technologically literate. That’s because they allow you to quickly make payments across international borders and even involving different currencies thanks to storing your money in a digital wallet.
TransferWise and money transfer services like them allow anyone to start with American dollars and send European euros to loved ones abroad in a pinch. Traders or businesspeople can also maintain their transaction schedules using these services. Most of them come with fees, but there’s no denying the convenience and speed of these methods of money transfer. It definitely beats sending a check the conventional way!
As mentioned before, the stock market is constantly being watched not only by regular brokers but by the public at large. Many are worried about their 401(k)s or other investments of the market reaches lows that haven’t been seen for quite some time.
But the market is also very reachable thanks to smartphone applications like Robinhood. Now, you can instantly buy or sell stocks with an app from the comfort of your home while in your pajamas. You can also use apps like Stash, which help you to smartly buy or sell stocks to support companies with causes or missions that you morally support.
AI isn’t just a fantasy when it comes to FinTech. These days, FinTech platforms and applications like Betterment can provide you with good-to-expert stock and investment advice. This prevents you from having to take a trip down to an actual firm or even make a phone call. Betterment, for example, will monitor investments and even take care of things like rebalancing or tax-loss harvesting.
While AI may not necessarily be the best tool for financially unstable times like we’re in now, many people are using these platforms to make tough decisions about their financial futures.
Blooom is just one example of how FinTech is allowing people to manage their own retirement accounts with much more speed and agility than they could before. This is particularly important as people pay attention to stocks and try to maintain their accumulated wealth as the market falls.
According to research from Devere Group, the situation has — so far at least — resulted in a 72% spike in FinTech use across Europe.
The coronavirus will not singularly cause FinTech to rise. Like all automation and digital advancements, it was only a matter of time before FinTech became a standard series of applications and computerized tools utilized fully by the public. But it is becoming increasingly clear that the coronavirus is accelerating the adoption of FinTech. The benefits of the tools more workers are being forced to use now, from home, translate almost exactly to the benefits seen in FinTech.
In a way, the mass quarantines and shelters in place being enacted across the United States and beyond have given people plenty of time to rethink the way they do things. For some businesses, this is terrible news. But for advanced industries like FinTech, there are certainly some benefits.
What are your thoughts on FinTech and the coronavirus? Is there a relation to FinTech’s potential rise? Let us know in the comments below.
Image courtesy of Emerging Europe.