“Coronavirus Outbreak and New Normal”
Coronavirus outbreak has utterly caused a meltdown in the Sri Lankan economy. From time to time, it is spreading slowly with several lockdowns, quarantines, and curfews. From place to place, the magnitude and the severity of the outbreak are different but there is no doubt that the economic crisis that will come from it, will lead in the way impacting our broader economies and societies than we currently can predict.
The solution for the economic crisis in the pandemic era will be the same as the global financial crisis in 2008; “digitalization and financial technologies”. Today, with the lockdowns and quarantines, the global financial services are showing remarkable resilience against the Corona outbreak situation. Also, in Sri Lanka, they are displaying solid business continuation abilities while adopting online collaborations, work from home solutions as well as they are using “clouds” to guarantee the least interruptions to their clients. Before the corona outbreak, this paradigm was almost unthinkable for some financial companies specially n Sri Lanka, but today; It has even been introduced as the world’s “new normal” context.
The future of finance: Digital
FinTech will be the heart of future financial developments in Sri Lanka. Within the “new normal” context, new opportunities have emerged for financial innovations. The pandemic offered a unique opportunity for Fintech to widespread, adopting digital financing solutions. Agility and adaptation can be identified as the core qualities of post-pandemic fintech. These core qualities will support overcoming the current vibe of economic uncertainty. Rather than that, FinTech will support in keeping social distance, promoting economic recovery as well as ensuring continuity of businesses after releasing travel restrictions within the country.
The Covid 19 pandemic has been leading economic growth in certain sectors like payments as well as Regtech. This has provided many unexpected opportunities for FinTech to grow. FinTech has been associated with minimized physical financial interactions as well as a secure way to reach vulnerable people efficiently. Fintech will emerge as a pivotal part while reigniting and ensuring the resilience of the Sri Lankan economy. As it is believed to be a lasting impact, in the post-pandemic era, people won’t 100% revert back to their old practices as life normalizes. Also, it is hard to predict the form of post-crisis opportunities.
“Hence, it is believed that the FinTech will play a pivotal role stimulating Sri Lankan economic recovery as well as it will be a sensible area for the innovations”.
“By lowering the barrier to creating new digital currency applications, we will see an explosion in the number of ideas tried.” -Brian Armstrong-
FinTech Opportunities and Post Pandemic Era
Due to social distancing and travel restriction measures in the pandemic, it enhanced collaborations in long-term FinTech digital transformations. For instance; the socioeconomics shocks that were confronted by Sri Lanka were severely disrupted due to some Fintech solutions. It has created some opportunities to encourage digitalization. In Sri Lanka, during its quarantine, people were in various inconvenience situations due to insufficient familiarity with digital banking developments. Pandemic has encouraged people to move into the facilities like online banking. It can be agreed that, “covid-19 has supported in enhancing and accelerating financial inclusion by creating new opportunities for digital financial services in Sri Lanka”.
Post pandemic fintech will support the growth of the business-to-business models (B2B) in the country as well as Regtechs will help the financial institutions to automate, digitize, reduce compliance costs and win sales rapidly. End-customer capabilities will be enhanced by boosting dashboards as well as visualization components.
Post-Pandemic FinTech – Trends in Sri Lanka
- FinTech will mostly focus on P2P lending, invoice financing as well as crowdfunding. Even though, FinTech companies are suffering from liquidity crisis during the pandemic; the collaboration on the digital transformation between FinTech and the incumbent financial industry will be increased during the era of post-pandemic in Sri Lanka.
- Widespread digitalization will be the emerging long-term trend in the post-pandemic.
- FinTech will experience an emerged demand while increasing discounts, offers, accelerated customer services and etc.
- B2B FinTech will grow even further with the gathered momentum within the corona outbreak period.
- Dependency on the fixed offices will be reduced but at the same time, the ability to launch a new product quickly and efficiently and the ability to keep the working style decentralized will be intensified as a long-term trend.
- The concept of “Contactless payment” will be the “new normal”. Many government policies within the country will revolve around forming a “cashless society” in the long run.
- When the “contactless payments” as well as “E-commerce” increase, the number of online payments will grow immensely. This will initiate Innovations in the field of personal authentication services; for instance, Bio-Metric authentication.
- Limited physical interactions with work from home circumstances will ultimately boost the interests and implications in cybersecurity services and products.
- Post pandemic FinTech in Sri Lanka will increase opportunities in tech start-ups and improve its digital abilities to smooth the process and keep servicing customers.
- Integration of hybrid Robo-advisory services will become another long-term trend within post-pandemic fintech.
FinTech was first born as an innovation within the financial sector out of necessity. The national economies will regain their old dynamics and will achieve new resilience levels in its post covid era. FinTech will play a pivotal role in it while recovering the economy.
Hence, it needs to empower “Fintech” and enable it to grow faster while promoting strength for incumbent financial institutions against any unexpected crisis in the future.
“At the end of the day, customer-centric fin-tech solutions are going to win.” – Giles Sutherland-
- Post Pandemic Covid-19 Economic Recovery (2021) – United Nations’ Economic Commission for Latin America and the Caribbean.
- The Promise of Fintech Financial Inclusion in the Post COVID-19 Era (2020) – International Monetary Fund
- Covid 19 Outbreak and FinTech Sector in Sri Lanka: Concept Paper (2021), Thisan Samarasinghe