It’s widely known and unfortunate news that the pandemic has led to not just widespread health turmoil, but also worldwide economic recessions. Lockdowns have caused many businesses deemed as “non-essential” to close their doors indefinitely, or operate at a far lower capacity than normal. All this while still being expected to pay the same rent and paychecks with very little government support in various countries, making it virtually impossible to survive for many. This has dramatically increased the downfall of physical brick and mortar stores that was already impending by the internet age, but has conversely led to the boom of global fintech startups. One of the main reasons for the success of fintechs is the pandemic itself, as to remain safe many people have been staying home and keeping non-essential interactions at an all-time low. This is literally fintech’s bread and butter, as many of the startups focus on ways to make contactless mobile banking and payments simple, easy, and able to be done without leaving the comfort of your own home. Not all fintechs were as lucky as some others, cause only those that were able to properly adapt to changing needs of customers were able to stay afloat and garner support from global investors. To remain competitive, many startups have offered customers payment channels, financing alternatives, and collective funding just to name a few.
One of the most important factors that lead to the survival and success of global fintechs is the faith innovators with funds have in those who lack funding themselves. Many wealthy investors from Silicon Valley have taken to startups in Latin America, Africa, and South Asia just to name a few, where remarkable innovations have sprouted, but unfortunately the conditions of these countries prevent those who live there from bringing their ideas to a global market. On top of this, fintech earnings have not taken a huge hit as previously expected. As mentioned by Entrepreneur, “Data from Finnovista and the IDB reveal that 29% of fintech companies seek to meet the needs of corporations and banks, being the second segment of clients in terms of relevance for technology companies.” To add to this optimism, cybersecurity has been at the forefront of nearly large fintech startups to ensure that this growing market doesn’t become a place ripe for scams. It’s reassuring that the race to become the world’s fintech capital has for the most part, at least from the public’s eye, been a place where funds are at risk of being compromised.