Collection: Professional Remark
Cass lecturer explains the challenges and alternatives that the pandemic poses to on-line lending and cost platforms
by Hamish Armstrong (Senior Communications Officer)
The coronavirus pandemic has had main implications for world fintech.
Enforced authorities lockdowns have seen the shutters fall on retailers, bars and eating places all all over the world, which has elevated our reliance on digital funds as essentially the most sensible – and hygienic – methodology of finishing transactions.
Small companies have additionally been rising their very own use of lending platforms to entry much-needed emergency funds on this disaster.
So, what does this imply for the sector? Dr Francesc Rodriguez Tous, Lecturer in Banking at Cass Enterprise College outlines the challenges and alternatives for fintech within the present local weather.
How has coronavirus affected the usage of world fintech?
“The impression of coronavirus on fintech is extremely heterogeneous.
“Even earlier than the disaster, some voices had been speaking in regards to the ‘fintech bubble’, however the pandemic is offering new alternatives to a number of gamers within the business.
“For example, peer-to-peer lending platforms have develop into an essential complementary device for relaying the UK authorities’s monetary assist for small companies, serving to them borrow vital funds in the course of the turbulence of lockdown.
“There has additionally been a significant shift away from cash as a result of sharp decline in face-to-face interactions and transactions, in addition to the potential to transmit the virus between bank notes and cash. Fintech companies specialising in cashless transactions are seeing the advantage of this by means of elevated use of their companies.
“After all, this must be met with efficient cyber safety measures. In brief, totally different fintech segments are being affected in numerous methods, and will probably be attention-grabbing to see which companies are strengthened and which of them lose their edge.”
How a lot do current threats to cyber-security on account of elevated distant working impression fintech suppliers?
“Cyber-security is a vital matter that appears to be neglected by many purchasers. One main efficient hacking assault to a big fintech platform can compromise the entire business, damaging shopper confidence and belief in monetary encryption.
“The upper the usage of on-line transactions, the extra doubtless we’re to see cyber-attacks and cyber-attack makes an attempt. On the identical time fintech companies are scaling up funding in cyber-security, and the sector is technologically shifting very quick with the emergence of quantum computing.”
Can fintech be stronger than ever as we come by means of the pandemic?
“The rise in distant working means bigger quantities of on-line information and knowledge are being shared throughout networks.
“This information can vary from our use of video conferencing software program like Zoom and Groups, to extra frequent on-line searching for vital purchases whereas shops are closed and on-line monetary transactions to keep away from utilizing cash.
“The principle benefit for the fintech business is its use and storage of information similar to this which, in precept, ought to present additional alternatives for companies within the sector whereas their companies are in larger demand.”
Dr Francesc Rodriguez Tous is a Lecturer within the College of Finance at Cass Enterprise College, and a member of Cass’s Centre for Banking Analysis.
Dr Rodriguez Tous’ analysis focuses on banking, with a selected give attention to banking regulation and systemic danger.
The Centre for Banking Analysis was based in 2008, constructing upon a protracted historical past of banking analysis at Cass Enterprise College. Drawing on the large expertise of core and affiliate members, the Centre affords skilled evaluation of financial and enterprise issues that have an effect on the banking and monetary sectors.