Opportunity in Adversity | FinTech & the COVID-19 Crisis
Due to COVID-19, the world has been sped up leading us to unravel resources in FinTech reaffirming its necessity to our society. Cashless payments and digitalization are among the global trends that have taken the spotlight. We have seen incredible opportunities for growth within FinTech as our society adapts to the new normal.
On June 10th, Betsy Ludwig and the Northeastern Women’s Entrepreneurship Initiative hosted a Masterclass: FinTech & the COVID Crisis — Global Trends & Predictions that many of us from Disrupt were fortunate enough to be a part of. The Masterclass featured two influential leaders in the FinTech industry in Sarah Biller (Co-Founder of FinTech Sandbox and Executive Director of Vantage Ventures*) and Susanne Hannestad (Founder and C.E.O. of FinTech Mundi) moderated by Julia McCarthy (Founder of Disrupt-The FinTech Initiative).Susanne Hannestad provided her perspective regarding what to expect in the future of FinTech globally from her home in Norway. Sarah Biller spoke about where opportunities lie in the midst of the current crisis and how innovation in FinTech can contribute to the economy’s recovery. Both women left our audience feeling inspired and optimistic about the role of FinTech in our society.
“Financial services are unique among sectors in that it requires trust.” — Professor Mark Bernfeld
During times of crisis, one must always adapt. Evidently, COVID-19 accelerated the shift away from cash in an effort to set the necessary health precautions against it. Susanne emphasized Norway’s efforts in their move to becoming a fully cashless society in the recent years has prepared them well. One of the obstacles for this has always been trust; can an application on my smartphone really be a trustworthy substitute for hard cash that I would give myself? The hygienic advantages to going cashless encouraged the use of FinTech solutions to make financial transactions. Countries like the United Kingdom have seen ATM transactions volumes decline by a whopping 62% over the crisis, Sarah explained that consumers are learning how to use digital alternatives which will likely mean this decline is not subject to much change. Sarah references a note she received that said : “In Blockchain I Trust” from which she senses a changing dynamic in the way we see financial services.
“What does the day after tomorrow look like? Tomorrow is already here.” — Sarah Biller
Digitalization is one of the key components to improve current financial processes and services with the use of new technologies. Sarah emphasized that in the case of the future of financial services, less is more. The goal is to leverage FinTech solutions to foster an open, personalized, permissionless, contactless, frictionless, and cashless global financial ecosystem. Susanne asserted that a downturn presents us with opportunities, especially for accelerating digitalization in our economy. This development is disrupting conservative industries such as insurance which is moving to a mileage insurance model versus an annual one which is driven by digitalization.
“Mobile money is the means to serve the underbanked in rural areas.” — Susanne Hannestad
FinTech is perfectly positioned to make a social impact, too in its efforts to create a more inclusive economy. Susanne had a financial inclusion summit about a year ago in Oslo, Norway that featured about 50 FinTech ventures looking to provide financial services to the underserved and underbanked. Her key takeaways from the summit as she looks to the future are that a flexible regulation framework can inspire digital drift as ventures seek collective gains through design-led thinking. However, the bottom line is as she mentioned, “Collaboration, Collaboration, Collaboration.” Collectively, the government, corporations, and non-governmental organizations can finally serve rural areas as ventures look to provide financial security and mobility.
“We want to dispel the myth that FinTech really is just for coders. FinTech has a role in advancing all of our roles in society.” — Sarah Biller
FinTech is not only about making financial services more convenient, but creating a more inclusive economy promoting diversity and equal opportunity. Sarah reminds us to go back to the first principles of Modern Portfolio Theory which show that diversification is the best investment strategy. Susanne emphasizes the importance of this point in everything that we do and mentions that “the more diverse, the better the results. It is critical to adopt this basic tenet not only in our investment strategies but in our ecosystems as we continue to adopt technologies disrupting financial services forever.
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Disrupt is grateful to have had the opportunity to talk with Sarah and Susanne inspiring us to be the future leaders of FinTech. They are such role models for us seeing the impact they are making through FinTech and we look forward to what Vantage Ventures and FinTech Mundi will accomplish in the future.
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Helpful Links!
DISRUPT Website — Subscribe to our newsletter here!
The Global FinTech Index 2020 — by FinTech Mundi
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Written By: Mohamed Bennis
