10 lessons for fintech in a post-Covid world

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Contxto – What’s the post-Covid world going to be like? That’s that question on founders’ and investors’ minds alike.

The answer still isn’t entirely clear, as practically all countries in Latin America are still grappling with the pandemic’s effects on their healthcare systems and population. The only thing that’s really certain is that the world will never be exactly the same as it was before.

In fintechs’ case they’ve seen how operations and needs have quickly changed for them and their users. And one fintech investor, Latinia, recently published a report titled “10 Lessons from Covid-19 that will transform banking.” What’s more, it also shared its thoughts on the future of investing in fintechs.

Even before Covid-19, fintechs were already revolutionizing the way money and finance work:

For fintech investments, the future is now

The world may be fintechs’ oyster in a post-Covid world. But which types of fintechs may draw more attention from investors? But for Latinia’s Director of Corporate Development, Oriol Ross, there is no particular favorite. Within the diversity of fintechs, they all add value:

“We naturally invest in a variety of fintechs in Mexico, because they all in one way or another envision the present and future optimistically,” said Ros in written correspondence.

“Prestanómico because of the agility it offers users to register online and the loans it provides. There’s neobank Flink that greatly understands the millennial market. Dapp eases payment transactions through QR codes. Or Belvo that ‘democratizes’ and opens banking [solutions] to third parties to offer more valuable services.”

• Related article: Mexico’s ecosystem of fintechs and VC grows with recent developments

10 Lessons for fintechs

Latinia’s latest report shares some useful insights that we should all make a note of, whether we work in a fintech or not.

1. Less “branching out”

Physical banks and their branches are facing off against fully-digitized neobanks and challenger banks. And while they do add a layer of trust in face-to-face interactions, it’s argued that they’re losing relevance. Consequently, more and more offices are shutting down. Likewise, Covid-19 may have only accelerated this phenomenon. 

Latinia proposes that this may lead to a crisis of trust given that users want to know there’s a tangible force behind the virtual products they consume. So it will be up to fintechs to fill in that gap.

2. Senior citizens join the digital wave

The elderly are an often-ignored market among startups. However, as the population most vulnerable to coronavirus, they are the people that most need technology to manage their finances and complete purchases, as opposed to leaving the safety of home. 

In that sense, fintechs will have to learn to adapt their products to consider the needs of this particular population.

3. Immediate information

Our personal finances are gaining a more critical role in our lives. To the extent that we want to stay updated on where money comes and goes with greater consistency. Correspondingly, users expect greater visibility, speed, and accuracy in the information they’re provided.

Those that fail to provide these factors risk getting on users’ bad side.

4. Apps’ time to shine

Covid-19 has made us explore new apps or rely on them more than ever before. Whether it’s to complete transactions, receive groceries, or consult a physician, they’re gaining a central role in every aspect of our lives.

With traditional banking, it means users will be less kind to clunky apps that offer poor UX (user experience) and customer experience. Meanwhile, fintechs and startups have a golden opportunity to show people that they’re necessary in a post-Covid world.

5. Social media insufficiencies

Many banks’ main form of communication with customers is already channeled through social media. But even these have shown their limitations, as they ultimately lead to the need to call a landline. From there, it was a matter of waiting until an agent picked up your call.

But technology through apps, push notifications, and chat systems with bots are adding efficiency to interactions. Fintechs were quick to jump on this and now banks have realized a simple Facebook page isn’t enough, not now, not ever.

6. Emailing reemerges

Latinia states emailing is making a comeback. Who’d have thought? As people (apparently) now have more time to read and write, they’re more committed to emailing.

As a result, startups should make the most of this channel to add a more human touch to their communication with users.

7. Digital bugs do their share of damage

Covid-19 has also led the outbreak of a digital bug that’s infecting computers. Since people are eager to absorb as much information as possible about the pandemic, they’re more exposed to downloading malware.

So businesses have a big responsibility in educating their users on these risks and how they’ll receive official notifications from them.

8. Dirty money

The risk of Covid-19 infection through physical money is debated, but some people don’t want to take that risk. And in any case, since everyone is staying home, they’re more reliant on handling their mullah digitally. This is, therefore, creating a more “cashless world.”

Although I’d argue that even in a post-Covid era, old habits die hard. So we’ll still see bills and coins circulating for some time.

9. Fintech solutions trampoline into more lives

As far as fintechs are concerned, the biggest effect Covid-19 has had on them is the increase in users and transactions. Likewise, it’s led to the launch of more products that reduce the need for person-to-person contact. 

For example, fintech Flink recently launched a virtual debit card with which users can complete purchases as opposed to a physical one. Another case is Cuenca, which unleashed a feature through which users can complete payments via WhatsApp.

10. The post-Covid customer

Covid-19 made us take a lot of things for granted: washing our hands, getting groceries, hugging our loved ones. As a result, Latinia states this will make the post-Covid customer a more sensitive one to how they’re treated. This customer will be far less tolerant to poor service and bigotry attitudes. 

So ultimately, startups, banks, and any business really, should be more fine-tuned to their needs. To assume the customer is the one who must adapt to their products/services, will only lead to disaster.

Related articles: Tech and startups from Mexico!

-ML