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Fintech apps have seen a surge in take-up in Europe over the past week, as people adapt their lifestyles to cope with limitations on mobility amid the Covid-19 pandemic.
As people are told to stay at home, digital banking apps are being increasingly used, along with other digital services.
According to a study by financial advisory deVere Group, the use of fintech apps in Europe surged 72% in the past week. Meanwhile, the use of cash in the UK dropped by 50% in the days following the UK government announcing limits on people’s movements, known as lockdown, according to the UK ATM network Link. The exchanging of cash can spread the virus and some retailers stopped accepting it early in the lockdown.
“The world has changed in the past few weeks,” said James Green, divisional manager Europe at deVere Group. “The measures we’re now all taking to help the fightback against coronavirus are affecting the way we interact, live, work and take care of our finances.”
The financial services industry has responded. UK Finance has encouraged the use of contactless payments during the crisis, in collaboration with retailers, by increasing the spending limit for contactless payments.
The banking and financial services trade body said the spending limit for contactless payments would be increased to £45 from the start of April, up from £30.
A total of £80.5bn was spent on contactless payments in 2019, which was up 16% on the previous year, but as spending limits increase and people get used to the technology, this will increase more rapidly.
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- Financial technology professionals have created a tool that will support self-employed people claiming financial relief from the government during the Covid-19 pandemic.
Fintech services beyond payments could also see increased take-up as bank branches are temporarily closed forcing customers to move to digital services, something banks are already encouraging them to do as they close hundreds of branches permanently. More complex services such as mortgage and investment advice could be sought online.
Green at deVere Group said the changes in behaviour, go way beyond fintech adoption with consumers and businesses changing how they live and work to counter the spread of Covid-19. “A new era has already begun, with digitisation and new technologies driving the shift,” said Green.
“This can be seen by demand soaring for video-calling platforms such as Google Hangouts, Skype, FaceTime and Zoom amongst others, as more people from ever work remotely.” These communication and collaboration services have become necessities for businesses as people have been forced to stay at home.
User trepidation is often the only thing holding back digital services as they stick to what they know. But being forced to use them as the only option could quickly convert them. Russ Shaw, head of tech startup network Tech London Advocates, agreed that once people start using digital services like fintech and collaboration tools, they will take off as “people realise how easy they are to use”.
He recently told Computer Weekly the tech startup industry could prove its worth during the current challenges. “There is some underlying optimism that when we come out of this, the digital and tech world, and the things it can offer, are going to become even more important and critical,” he said. “I don’t think we will go back to the way we have operated in the past.”