COVID-19 has impacted every aspect of our daily lives, from the cancellation of conferences and events to mandatory shelter in place orders within high-risk cities. Here are a few ways the Coronavirus has affected the fintech industry:
An effort to move to a cashless platform
COVID-19 has increased awareness about the presence of germs on everyday objects. By the nature of their use, paper bills and coins are prone to containing more unwanted organisms than the average object. A 2017 study of used banknotes in New York found 397 distinct bacterial species crawling across the bills. It is for this reason that the use of banknotes has decreased and will continue to decrease in the coming weeks and months as the virus progresses. Some shops are implementing a card-only policy in an effort to stop the spread of the virus through cash. This means that debit, credit card, and mobile banking services such as PayPal and Venmo are on the rise.
Fewer investments in fintech startup companies
It is often startup companies that present the market with new and innovative solutions to problems within the fintech industry. These startups rely on venture capitalists and other independent investors to fund their development and capital expenses before their ideas become profitable. With the uncertainty of the stock market and the fear of the future, investors may be less willing to invest in a fintech startup, potentially resulting in fewer products and solutions released in the upcoming years for APIs and financial institutions.
Branch closures and lobby closures
Out of concern for the health of their customers and employees, many banks have made the decision to close down their lobbies, only offering drive-thru services. In some cases, they have been forced to entirely close down locations, and are operating with a reduced staff. These financial institutions are faced with the challenge of conducting business as usual with employees either working remotely or not at all.
More personal loans, small business loans, and refinancing applications
Businesses are reducing or laying off their entire employee workforces due to either governmental forced closures or self-closures in reaction to the Coronavirus. This will, of course, have a domino effect on the livelihood and financial well-being of people across the world. In light of so much uncertainty, the Federal Reserve has dropped interest rates near all-time lows. Business owners and consumers who can afford to are taking advantage of these low interest rates, seeking greater financial certainty as they press through this pandemic.
NXTsoft’s OmniConnect Solutions are in a unique position to help alleviate some of the burden of onboarding a loan into a financial institution’s core system. With OmniConnect’s cutting edge Loan Connectors, a financial institution is able to set up automatic loan boarding procedures with zero human interaction, saving your institution the worry of having an on-site team member to board these customer critical loans. Our sales team is ready to walk you through all the features and benefits to find the solution that can best fit your current business needs.
NXTsoft’s top priority is the health and safety of our families, friends, clients, and partners. We wish you comfort and well-being in these uncertain times. Despite the coronavirus, NXTsoft is fully operational, and our team has been provided access to all technology and tools necessary to work remotely. This remote access provides NXTsoft the ability to service the needs of our clients and partners without interruption, while keeping us and our community out of harm’s way. Please stay safe and do not hesitate to contact us should you need our assistance in any way.