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Fintechs See Increased Growth as Firms Adapt to COVID-19

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The World Economic Forum has today released results of a study on how the fintech industry has been impacted by COVID-19.

Since the onset of the pandemic, the fintech industry has seen increased growth. In 2020, firms saw an average rise of 13% compared to 11% growth in previous years. The expansion of transactions was noticeably higher in countries with strict lockdown measures, where growth was 50% higher, compared to firms who were operating in countries with looser measures. Though the highest gains were seen in the digital payments sector, nearly all fintech services saw increased growth. Digital lending was the only service that did not see increased growth.

“It’s clear COVID-19 has disrupted the global economy with lasting implications for corporates and consumers,” said Matthew Blake, Head of Financial and Monetary Systems, World Economic Forum. “Despite this challenging backdrop, fintechs have proven resilient and adaptable: contributing to pandemic relief efforts, adjusting operations and offerings to serve vulnerable market segments, like micro, small and medium-sized businesses, while posting year-over-year growth across most regions.”

Despite this growth, many fintech firms are in a deteriorating financial position, with over half of survey respondents reporting a negative impact on their capital reserves and mixed views for future funding. The Global COVID-19 Fintech Market Rapid Assessment report, which the Forum has launched in collaboration with the Cambridge Centre for Alternative Finance (CCAF) and the World Bank, explores these trends in depth, examining both financial and policy effects on the fintech industry during COVID-19.

Fintech trends during COVID-19 lockdowns

On average, fintech firms in economies with stricter lockdown measures saw 50% higher transaction growth than economies whose governments applied looser measures. Firms in the markets with the strictest lockdowns saw 15% growth in their transactions compared to 10% growth in countries with the fewer restrictions.

Transaction volumes and number of transactions under low, medium and high COVID-19 lockdown stringencies

Image: CCAF/World Economic Forum/World Bank

These trends were also seen in fintech employment in these economies. Fintechs in countries with more lockdown restrictions reported an average of 10% increase in full-time employees, while fintechs in economies with fewer lockdown restrictions actually saw their full-time staff decrease by 19%.

Launch of new products and services and changes to existing ones

Fintechs have responded to the COVID-19 pandemic by implementing changes to their existing products, services and policies. Two-thirds of surveyed firms reported making two or more changes to their products or services in response to COVID-19, and 30% reported being in the process of doing so. The most prevalent changes across all fintech sectors were fee or commission reductions and waivers, changes to qualification, and onboarding criteria and payment easements.

Fintechs have also launched a range of new products and services in response to the pandemic. Some 60% of surveyed firms reported launching a new product or service in response to COVID-19, with a further 32% reporting that they were in the process of doing so.

The most prevalent new change for digital payments firms was the development and deployment of additional payments channels (introduced by 38% of firms), for digital lending it was value-added non-financial services (e.g., information services; introduced by 35% of firms) and, for digital capital raising it was hosting COVID-19-specific funding campaigns (introduced by 35% of firms).

Despite significant willingness, fintech involvement in relief remains limited

To date, fintech involvement in the delivery of COVID-19-related relief is limited, despite significant willingness by firms. More than a third of surveyed firms reported a willingness to participate in the delivery of one or more COVID-19-related relief measures or schemes.

While this demonstrates strong interest, the participation rates of fintech firms in relief schemes ranged between 7% for NGO-led measures to 13% for government job-retention measures. Fintech firms were most likely to indicate interest to participate in the delivery of industry-led relief measures (32% of firms), government match-funding schemes (32%), and government-bases stimulus funding to MSMEs (30%).

Expert thoughts

“This study reveals a global fintech industry that has been largely resilient in spite of COVID-19. Nonetheless, its growth must be interpreted with nuance and in the context of unevenness, and the opportunities for the industry should be juxtaposed with the challenges it faces,” said Bryan Zhang, Co-Founder and Executive Director of the Cambridge Centre for Alternative Finance.

“Fintech has shown its potential to close gaps in the delivery of financial services to households and firms in emerging markets and developing economies,” said Caroline Freund, World Bank Global Director for Finance, Competitiveness and Innovation. “This survey shows how the fintech industry is adapting to the pandemic and offers insights for regulators and policymakers seeking to promote innovation and reap the benefits of fintech, while managing risks to consumers, investors, financial stability, and integrity.”

“Covid-19 is accelerating change in how people interact with financial services, which has led to unprecedented demand from developing countries to progress their transition to secure and inclusive digital finance. Whilst it is encouraging to see the growth reported by Fintechs in the study, there are also cautionary indicators that some firms are suffering a deterioration in their financial position and are concerned over their ability to raise capital in the future. This is something that the FinTech community should be mindful of given the significant economic opportunities that Fintech presents,” said James Duddridge MP, the UK’s Minister for Africa at the Foreign, Commonwealth & Development Office (FCDO).

The report was based on survey responses from 1,385 fintech firms in 169 countries. The survey was carried out by CCAF, the World Bank and the World Economic Forum.

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World Bank Group and CES Announce Global Tech Challenge Winners

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image: ces.tech

World Bank Group and CES announced the winners of the Global Tech Challenge at CES®2021.

The result of a partnership between the Consumer Technology Association (CTA) and the World Bank Group, the Global Tech Challenge was launched at CES 2020 to reward scalable and innovative technological solutions in three main areas: digital health in East Africa, resilience in India and gender equality around the world. Technology solutions that helped communities respond to the COVID-19 pandemic were also prioritized.

Selected among over 1,000 applications, three winners were selected for gender equality, 10 for resilience and 17 for digital health. More details about the selected innovations can be accessed here for health, resilience and gender equality.

Global Tech Challenge winners will have the opportunity to access financial and/or technical assistance to pilot and scale their solutions on the ground with private sector companies, governments and within development projects financed by the World Bank Group, one of the largest sources of funding and knowledge for developing countries.  

“From closing the digital divide to building resilience in the face of natural disasters or pandemics, innovation can solve some of the most pressing development challenges. The World Bank Group is pleased to support impactful programs focused on bringing equal access to connectivity to women in developing countries and to recognize cutting-edge solutions such as AI-enabled robots to rebuild homes in post-disaster areas. Now is the time to scale up solutions that have proven effective, so that no one is left behind in the new digital era,” said Makhtar Diop, the World Bank’s Vice President for Infrastructure.

“Disruptive technologies are a fundamental driver of economic growth and job creation—and key to solving development challenges around the world. At IFC, we are proud to support the private sector in bringing these technologies to emerging markets, with innovations that range from portable ultrasound devices that can detect COVID-19 to medical tools that provide real-time cardiac diagnoses even in remote areas,” said Stephanie von Friedeburg, Interim Managing Director and Executive Vice President, and Chief Operating Officer at IFC.

We are thrilled to be continuing our work with the World Bank so the world’s best and brightest innovators at CES can collaborate with the World Bank Group to enter new markets, provide solutions and aid in development,” said Karen Chupka, EVP, CES, Consumer Technology Association (CTA).

Owned and produced by CTA, CES 2021 will be an all-digital experience connecting exhibitors, customers, thought leaders and media from around the world. CES 2021 will allow participants to hear from technology innovators, see cutting-edge technologies and the latest product launches, and engage with global brands and startups from around the world. For over 50 years, CES has been the global stage for innovation, and CES 2021 will provide an engaging platform for companies large and small to launch products, build brands and form partnerships.

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Absolute Digital Media On The New Digital Marketing Trends of 2021

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The year of 2020 is one that many of us are more than happy to leave behind for new beginnings, but with a new year also comes a new load of marketing trends. Out of these marketing trends, which of them will be best for your business? In this article, we will be providing you with insight into some of the new digital marketing trends for 2021.

Social Media Will Become More Important Than Ever

Social media has been used in marketing for several years now, but in 2021 it will be more important than ever before. With platforms such as Facebook implementing a market place for individuals and businesses to advertise and sell their items, this will be a new way for customers to not only to discover companies but also purchase items directly from their Facebook pages. This will become a new way for agencies such as Absolute Digital Media to use social media to increase their own visibility as well as their clients.

Virtual Events Are Here To Stay

Throughout the year of 2020, people all over the world were forced to stay inside for longer than ever before as the virus took a hold of our lives. However, this has led to several businesses adapting to still host major events without having their attendees to travel. This has meant that virtual events for marketing have become more popular than ever before. This has been a popular move for an online marketing agency as this has provided them with the platform, they need to show their expertise and show their branding.

Absolute Digital Media On Using Chatbots

In addition to virtual events, there has been a huge focus on automation as we head into 2021. One of the biggest trends when it comes to marketing is the use of a chatbot. With several industry experts such as Ben Austin CEO of Absolute Digital Media and several others singing the praises of chatbots when aiding the conversion funnels, this is a new way of aiding customers through the discovery stage of the conversion funnels and into purchasing a product from you whether through your own website or another retailer.

Personalised Marketing Is More Important Than Ever

Along with virtual events and atomisation, personalised marketing techniques are more important than ever before. With personalised marketing in the form of email marketing and personalised messages, you can personally help the customer on their journey and make the sales process significantly easier. Though this will take time to implement this can provide your sales team with the perfect opportunity and aid in closing deals in the long term. This will not only help to boost your business, but it will make sure that the conversion funnel is optimised fully.

As a business owner, you want to make sure you have the best for your business and these trends are on, hand to help you out. Which of these will you be implementing within your business throughout 2021?

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Deloitte Releases Tech Trends 2021

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The public sector has been thrust to the forefront of the societal and economic disruption caused by the pandemic, and technology leaders have had to accelerate digital transformation and reimagine how to enable their workforce and better serve Americans. Deloitte’s 12th Annual Tech Trends Report, released today, examines the trends and opportunities that will disrupt every industry to a varying degree in the next 12 – 18 months. The special government analysis reviews the trends through a public sector lens and provides examples of the trends in action with agencies applying them to advance their missions.

“Digital transformation projects that used to take years have been completed in a matter of months. Government tech leaders have demonstrated their own grit and resilience and that of their organizations through this disruption,” said Scott Buchholz, Emerging Technologies Research Director and Government and Public Services CTO, Deloitte Consulting LLP. “However, 2020 has clearly shown that organizations need to become nimbler in strategy and culture. Moreover, they need to be modernizing mission-critical systems while enhancing security and maintaining zero disruption operations.”

To read the Tech Trends 2021: A government perspective and how prepared government agencies are to navigate continued disruption, click here.

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