The current Coronavirus pandemic has driven a huge 72% increase in the use of FinTech applications in Europe. The research, published by deVere group found that at a time when most industries in the economy are starting to feel the impact of what is already being labelled an international recession. This sharp increase in app adoption and use is encouraging news for the FinTech industry as it experiments with more digital and flexible ways of banking. This also comes as another indication that the lasting effects of the virus will be the move towards a more digital and online society.
This 72% rise in FinTech applications usage is obviously due to increasing numbers of people adhering to a more robust lockdown and having to adapt to a world without banks.
“The world has changed in the last few weeks,” states James Green, deVere Group’s Divisional Manager of Europe. “The measures we’re now all taking to help fight back against coronavirus are affecting the way we interact, live, work, and take care of our finances.”
The rise in FinTech applications adoption is likely to be found, out of Europe too as COVID-19 has now infected more than 700,000 people around the world. An online gold purchasing application called Glint Pay has also reported a 718% increase in traffic during the last week alone. Furthermore, banking applications in Asia and the Middle East have also declared sharp upturns in usage. One bank in the Philippines has experienced more than twice the usual registrations for its online banking facilities.
The rise in such applications comes at a time of general growth in the utilisation of digital technology as people are having to find new ways of working, and communicating due to the ongoing pandemic. Netflix also recently declared record viewing numbers since lockdowns commenced several weeks ago. Remote conferencing application Zoom has also reported 32% boost in its share prices since the market began to decline in mid-February.
“A new era has already begun, with digitalisation and new technologies driving the shift,” James Green says. “This can be seen by demand soaring for video-calling platforms such as Google Hangouts, Skype, FaceTime and Zoom amongst others, as more people than ever work remotely.”
There is also the lingering question of, will this shift to all things digital last after the COVID-19 pandemic is over? It is likely that after months of lockdown, people will see leaving the house as a novelty once again and will enjoy going outside, just because they can. However, it is likely that with FinTech and banking applications, the effects will persist. The adoption of such applications has already grown slowly in the months and years prior to the outbreak. UK Finance reported last year that 72% of adults used online banking and 48% used mobile banking.
So, this implies that a long-term shift was already happening. It could also be argued that apps provide more convenience and efficiency than going to a branch, it’s probable that the forced exposure to FinTech and banking apps will create a large number of converts.
The same could also be argued for digital technology. Remote working had already seen an increase of 159% in the United States between 2005-2017 as Americans (mainly millennials) are spending more time at home and becoming more reliant on digital tech.
As such, the Coronavirus lockdown could fast-track and reinforce trends that were already in motion, especially if the lockdown lasts for several months, which could certainly help to drill habits in people.