VC Finch Capital has published an in-depth report on the impact that the coronavirus will have specifically on the Fintech industry, as well as the economy and the stock markets.
The report, titled “FinTech: The Future Post CV-19“, analyzes the challenges and opportunities that the industry will face during and after the crisis, starting from the short-term impact of the crisis, through the structural post-crisis implications, which could lead to the increasingly rapid adoption of digitization, to the analysis of the entire industry landscape in terms of growth, unity, economy, consolidation, financing and exit dynamics.
The most affected would be startups that are still in the early stages of their life cycle, especially in case of stagnation of growth, or reduction, for at least 3 or 6 months. In fact, the uncertainty about the current situation puts the collection of funds under pressure, in addition to liquidity management, marketing, and personnel management.
Therefore, in the short term, startups could face many obstacles that could put their survival in crisis or severely limit their growth. However, after the acute phase of the crisis, i.e. starting from the fourth quarter of 2020, the long-term impact could also become positive, because it could create conditions that will encourage more momentum, more growth, and perhaps the triggering of a virtuous circle for the FinTech sector.
The crisis is expected to last until the third quarter of 2020, followed by a recovery of 12-18 months, during which only-digital services will become the new norm in the sector, significantly accelerating a trend that has already begun in the last decade.
The areas most under pressure will be banking, asset management, payments, mergers and acquisitions, and venture capital investment.
By contrast, those that could benefit most are consumer and SME lending platforms, those that digitize mortgages and life insurance, and those that best harness AI and IoT.
Finch Capital’s Managing Partner, Radboud Vlaar, said:
“2020 will be challenging for FinTechs to navigate, but there are better times ahead. Post-crisis, disruptive winners will “take all”, as we expect surging demand from financial services for technology to master digital-only interaction, enabled by AI and big-data analytics”.
