A majority of senior fintech professionals say Covid-19 has had a negative impact on the industry, but many are more optimistic about the future now than they were at the start of the pandemic, according to a report released by research and content agency Pensar Media.
The report—Pandemic Pains: How the Covid-19 Crisis is Impacting the Fintech Industry—surveyed more than 100 senior fintech professionals in the UK, Europe and the US to gauge how fintech companies have responded to the challenges of Covid-19, what opportunities it has created and what firms are planning for next year.
Key findings include:
- 69% think Covid-19 has had a negative impact on the industry, with challenger banks and online lenders being hardest hit
- 43% are more optimistic now than at the start of the pandemic, compared to just 16% who are more pessimistic
- 58% expect the pandemic will result in increased M&A activity across the fintech industry, with the payments sector expected to attract the most interest
- 55% expect the fintech industry to recover from the pandemic in a year or less
- 46% believe the pandemic will ramp up pressure to change or refine existing business models to survive
- 43% expect to see a decrease in the availability of funding for fintechs next year, with 50% of respondents predicting that between a quarter and half of all fintechs will experience financial difficulties over the next 12 months
The report features insights and commentary from some of the fintech industry’s leading experts, including Railsbank co-founder and CEO Nigel Verdon, Funding Options CEO Simon Cureton, CUBE founder and CEO Ben Richmond, and Token CEO Todd Clyde.
Ben Edwards, co-founder and editorial director of Pensar Media, said: “The survey shows that Covid-19 has had an uneven impact on the fintech industry. Some businesses are thriving, particularly B2B fintechs that provide the digital infrastructure for traditional financial services companies, whose sluggish digital transformation efforts have been starkly exposed by the pandemic.
“On the other hand, some businesses have had a tougher time, particularly fintechs that rely on revenue from activities such as card transactions or foreign exchange fees that have been squeezed by lockdowns and travel bans. What the survey responses and our interviews with fintech leaders ultimately underscore is that while there remains uncertainty ahead, the industry has quickly adapted to the new environment and optimism for a speedy recovery is high.”