You’d need to be living on a remote island, without electricity or internet to not be aware of what the world is going through right now – a medical crisis that has spread across the world and disrupted supply chains, goods and services production, financial markets and most importantly for millions of people, the ability to go about their daily lives.
Last week the Dow Jones and other US-based trading platforms took a massive tumble, and yesterday it was Europe’s turn with the worst drops in history – US markets even temporarily stopped trading as a result. The ongoing restlessness about both the spread and impact of the Novel Covid-19 virus and the US and Russia’s aggressive price war over the price of crude oil leaves millions scrambling to secure their assets in its wake. The current epidemic is expected to cost the global economy upwards of 2 trillion dollars, and if reports are to be believed, even FinTech giants like Ant Financial in China are on their knees and are taking drastic measures like cutting interest rates, etc. Is it all doom and gloom?
Should we bunker down and wait for this virus to retreat? We don’t think so. We should do what we’ve done for thousands of years in agriculture: slash and burn. Controlled fires fertilize fields and allow new crops to grow bigger, better and faster. Corona could become our controlled fire. It could allow for the controlled acceleration towards a more digital economy, innovations in touchless payments (even the WHO has endorsed touchless payments to reduce transmission risks associated with cash –check it out) and integrated adoption of central bank digital currencies, which will likely run on distributed ledger solutions. Before we move on – we don’t mean just switch to contactless cards and move on. Because as you well know – for most amounts above a trivial sum, will ask you to authenticate with your PIN code. On that little touchpad. Pretty gross – and not likely to help curb the transmission of pathogens.
Instead, Fintech Guru Chris Skinner advocates the leveraging on technology to revolutionize the payments process entirely – using Alipay’s “Smile to pay” feature as an example that leverages on facial recognition and biometric authentication to process a payment. Simply look at the camera, smile, and kaching. It’s in use cases like that where FinTech’s power is – changing the way payments and transactions take shape in our society – and the way that global supply chains and e-commerce platforms interact with each other during trying economic times. We are already seeing that FinTechs and banks are quick to react – just take a look at DBS Bank taking the need for contact-free banking seriously and offering contact-free solutions for 11 of its business verticals to further facilitate customer access, including trade finance solutions.
Although we are still relatively early on in the COVID-19 epidemic, and it is too early to tell what other trials await capital markets or how deeply investor confidence will be rocked, we must remind ourselves of the importance of resilience and must learn what many survivors of far worse catastrophes such as war or ecological disasters have taught us: from ash, one must make clay.
Author: Martijn Bos, Holland FinTech
Biography: Martijn Bos is the Head of Content & Partnerships at Holland FinTech. He is a financial technology enthusiast with a background in corporate and commercial law and has worked around the world in international development with a focus on Financial Inclusion. Want to know more? Connect with him on LinkedIn.