The lockdown caused by the Covid-19 outbreak presented difficult challenges to businesses around the world. Companies were faced with financial shortages and forced layoffs, among other issues. Many businesses had to seriously think of whether they could survive the crisis or should shut down. However, for some fintech companies, the pandemic appeared to be rather beneficial. Due to the lockdown, the demand for online financial services has increased dramatically, providing fintechs with valuable opportunities for growth and innovation.
In Australia, the fintech industry has been thriving in recent years. As a result, when the Covid-19 pandemic broke out, it allowed many Australian fintech companies to unlock their potential. Keating and Palmer-Derrien (2020) compiled a list of Australian fintechs that managed to innovate and raise funds during the pandemic. For example, Zeller, which raised $6.3 million during Covid-19, intends to offer an innovative payment solution to small businesses (Keating and Palmer-Derrien, 2020). They aim at making small businesses’ banking operations easier and faster. The innovation of another Australian fintech, Verteva, is digitized home loan solution that “removes the need for people to meet physically” (Keating and Palmer-Derrien, 2020, para. 31). Thus, most fintech innovations are aimed at optimizing existing products for existing markets, which is one of the core principles of the fintech innovation framework.
Fintechs play a significant role in helping Australia to recover from the consequences of Covid-19. Startupbootcamp (2020), a fintech accelerator, partners with large Australian financial and insurance companies and the world’s top fintech startups with the purpose of innovation to support the Australian economy. Partners are working on new technologies in such areas as “Financial Health and Wellbeing, Regtech, Insurtech, Claims and Risk, Data Management and Corporate Social Responsibility” (Startupbootcamp, 2020, para. 3). Since social distancing during the pandemic has fostered the use of online financial services, Australia is now turning to fintech innovation to improve its economic situation.
Overall, fintechs are now aimed at innovations that are designed to transfer banking operations into the digital world. What do you think, would we benefit from this transition and what would be the advantages of digital banking services?
References
Keating, E. and Palmer-Derrien, S. (2020) ‘Millions in the bank: meet 10 Aussie fintechs that raised funds during COVID-19’. SmartCompany, Web.
Startupbootcamp (2020)7 global fintech innovations to lead Australia’s financial recovery. Web.