During last week’s Futures Forum, guests from multinational investment bank Société Générale, fintech incubator and accelerator F10, digital banking startup Penta, sustainable savings startup Mattrvest and venture capital firm Finch Capital sat down with us to discuss the question:
What opportunities does COVID-19 present for the FinTech industry?
“Never let a good crisis go to waste.”
Our experts gave us a 360° view of the future of FinTech after coronavirus and taught us some valuable lessons on how to come out on top after the crisis.
Here’s our top 5 actionable insights for FinTech industry players:
1 – Prepare your team and your strategy for change.
All of these experts were in agreement: we are entering an era of major growth within finance and FinTech.
- As Lukas Zörner observed, “This [crisis] presented a big opportunity for FinTechs and other companies, simply because there was a problem which needed to be solved. All of this is a part of a big fundamental shift in the market, where we can see for example in supermarkets, customers being asked to pay cashless and contactless.”
- Christoph Bauer further remarked, “You will see patterns of behavior emerging that haven’t been there before. For example, people are using online banking and digital platforms more.” Making it clear that regardless of their customer base, banks and financial institutions are going to shift to their very own ‘new normal’
2 – Identify and re-invest
In her keynote, F10 Accelerator & Open Banking Lead Deborrah Schaer shared statistics from the Swiss Finance Startup Association which polled fintech startups’ reaction to the current crisis:
While 55% of FinTech startups expect to go out of business, the other 45% will keep pushing forward.
- “Many FinTechs, especially the ones that have just gotten started or maybe didn’t have a lot of money said ‘We have to cancel our businesses’, but the others were really motivated and said ’We are going to a) identify new possibilities that this crisis may have for us b) we are going to re-invest in our startup and we are going to invest in new ideas, and new products.”
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3 – “Pivot!… Pivot!… Pivot!…”
- Finch Capital Investment Manager Thierry Zois advised startups to “… try to extend the runway as much as possible and try to squeeze as much from the channels that provide revenue…”
Some useful advice for all startups hit by the crisis. But how? Thierry suggested ‘you can either pivot, or start targeting new opportunities that were not necessarily on the project roadmap which will benefit you in the long run.”
4 – Whether you are speaking with customers or employees, communicate transparently.
While navigating this crisis, transparency is key in all communications. This is even more important when building trust with your users, and especially with something as sensitive as finance.
Involve your employees and customers in the changes happening in your organization by communicating with them openly. Build trust through honesty and support them where they need it.
- “You should also be very transparent with the team and communicate openly, not hide behind curtains and take sneaky decisions and lay people off. People were accepting to take pay-cuts, or even go part-time in terms of job, just because they had an affinity towards the company and would like to support it as much as they can.” (Thierry Zois, Finch Capital)
5 – Support your users.
While several examples were provided of how COVID-19 crisis has brought businesses closer to their customers, none was more salient than that of digital banking startup Penta.
Now more than ever, Penta saw community-building and user support as essential for their customer base.
- Penta Chief Product Officer Lukas Zörner told us, “It’s not about competition these days. It’s not about who gets the biggest share of the market. It’s about: how can we make sure that smaller businesses stay afloat? … [that] we really saw as an opportunity (to bring more) transparency into all of the government programs, all of the government paperwork. So, we launched a Public Health center, both on our website and application to really just bring the information together.”
The current crisis has created a necessity for the financial services industry to a make radical shifts in order to provide products that add value. It’s critical to reexamine your focus, invest in your product and nurture your existing user base.
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