The worldwide COVID-19 outbreak wreaked havoc in the business and financial sector, lowering demand and distorting supply chains. Profit warnings were issued in specific industries, including tourism, remittance service providers, and retail, as experts predicted a nosedive in earnings over the following two quarters. According to Goldman Sachs, the global economy is forecast to fall by 1% this year, a far higher amount than previously anticipated.
Nonetheless, some industries appear to be better positioned than others to resist the trend. In particular, the financial technology business, or Fintech, looks to be robust to the pandemic’s threats and is primarily projected to grow as individuals shift to digital-only services.
Fintech Industry – Background
The term “Fintech” or Financial Technology refers to new technology that aims to enhance and automate the delivery and usage of financial services. Fintech, at its base, is used to assist organisations, company owners, and individuals in better managing their financial operations, procedures, and lifestyles via the use of specialised software and techniques that operate on the latest technological tools.
Fintech was coined in the twenty-first century to describe the technology used in the back-end systems of established capital markets. Since then, there has been a trend more towards consumer-focused services and, as a result, a more consumer-focused definition. Fintech is operable in various industries such as the education and financial sectors.
Fintech also incorporates the creation and usage of digital currencies like bitcoin. While this sector of Fintech gets the most attention, the significant money is still in the conventional global financial business, which has a multi-trillion-dollar market valuation.
Why the Surge in the Remittance Industry via Fintech?
Since the outrageous pandemic and the mentally draining lockdowns, downloading financial applications that help you contain your bank in the palm of your hands has risen. According to statistics from financial advice firm deVere, Fintech applications recently experienced a 72 per cent increase in usage. Between the fourth quarter of 2019 and the end of the first quarter of 2020, the average weekly app downloads for financial applications climbed by 20%. Large companies like PayPal, the UK neo-bank Monzo, the Barclays mobile app, etc., all boosted their market share during this time, while stock-trading applications like Batman and Robin built their user base.
The motivation for governments to employ financial technology may be gaining traction due to the COVID-19 situation and the increased usage of Fintech services by consumers. Proposals for the construction of digital sterling wallets overseen by the Federal Reserve Bank to allow cash distribution to individuals and companies were made during negotiations in March on how the UK government might provide coronavirus relief payments directly to the people of the UK.
Remittance Transfer needs for Fintech Companies
Although governments’ use of digital currencies to combat economic crises is still being debated, their benefits over traditional currencies are becoming more apparent. In March 2020, the Bank of England (BOE) of the United Kingdom stated that digital currencies will “theoretically increase the policy alternatives available.” This might be accomplished by enabling central banks to use monetary policies to encourage banks to lend more freely while avoiding cash hoarding.
More importantly, the speed with which digital currencies may be exchanged via digital ledger technology allows governments to give liquidity to vulnerable individuals considerably more quickly than they can with traditional forms of money. Some governments have recently offered economic assistance to homes impacted by the coronavirus via postal paper checks, which might take weeks to reach recipients.
Furthermore, traditional money relies heavily on using middlemen like banks to send payments, limiting the ‘unbanked’ from gaining access to financial services or financial relief in times of economic crisis. Financial innovations like virtual currency and distributed ledger technology give users new means to do transactions that are faster, cheaper, and, in some situations, more inclusive than traditional money.
Important Opportunity for Expats
This is indeed a significant opportunity for expatriates to expedite the digitalisation of payment services and for government organisations to investigate the usage of digital currencies. Given that consumers have been unable to visit banks owing to preventive measures and are now accustomed to the action of COVID-19, facilitating their access to digital services will be crucial.
Banks and other financial intermediaries should be recognised for improving their digital platforms and lowering online banking costs for their customers. Excessive expenses should be minimised or eliminated whenever possible, allowing the benefits of financial technology – improved speed and lower prices – to begin to transfer into market-wide efficiency and alleviate financial stress. Such as what ACE Money Transfer has been doing for its customers since its inception.
What are the Best Ways to Send Money Online?
Since 2002, ACE Money Transfer, one of the leading remittance service providers, has provided the best solutions to its consumers. ACE has succeeded in the remittance market by servicing over 1.3 million consumers and having over a hundred receiving countries on its list. As the globe digitises every element of life, ACE is in better shape than ever before.
Many of ACE’s services are digitally prioritised to provide the best possible service to its consumers. The quickest, most dependable, and ever-expanding ACE never fails to make its customers happy since they are ACE’s top priority. So, what’s keeping you from taking advantage of ACE Money Transfer’s outstanding services?